Document:

<PAGE>

                                                                               *
                                Aircraft N171UA

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                  FIRST AMENDED AND RESTATED LEASE AGREEMENT

                                   (1989 I)

                                  Dated as of
                                 July 20, 2000

                                    between

                   STATE STREET BANK AND TRUST COMPANY,
      not in its individual capacity, except as expressly provided herein,
                         but solely as Owner Trustee,
                                    Lessor

                                      AND

                            UNITED AIR LINES, INC.,
                                    Lessee

                          One Boeing 747-422 Aircraft
                                    N171UA

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As set forth in Section 20 hereof, Lessor has assigned to the Indenture Trustee
(as defined herein) certain of its right, title and interest in and to this
First Amended and Restated Lease Agreement. To the extent, if any, that this
First Amended and Restated Lease Agreement 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 First Amended and Restated Lease
Agreement may be created through the transfer or possession of any counterpart
other than the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture Trustee on
the signature page thereof.

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<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                                            Page
         <S>                                                                                                <C>
         SECTION 1.   Definitions......................................................................      1

         SECTION 2.   Acceptance and Lease.............................................................     18

         SECTION 3.   Term and Rent....................................................................     18
             (a)      Interim Term and Basic Term......................................................     18
             (b)      Basic Rent.......................................................................     18
             (c)      Adjustments to Basic Rent, Excess Amount, Stipulated Loss
                      Values and Termination Values....................................................     19
             (d)      Supplemental Rent................................................................     20
             (e)      Payments in General..............................................................     21

         SECTION 4.   Lessor's Representations and Warranties..........................................     21

         SECTION 5.   Return of the Aircraft...........................................................     22
             (a)      Condition Upon Return............................................................     22
             (b)      Return of the Engines............................................................     25
             (c)      Fuel; Manuals....................................................................     25
             (d)      Storage Upon Return..............................................................     25

         SECTION 6.   Liens............................................................................     25

         SECTION 7.   Registration, Maintenance and Operation; Possession
                      and Sublease; Insignia...........................................................     26
             (a)      Registration, Maintenance and Operation..........................................     26
                      (1)      Registration and Maintenance............................................     26
                      (2)      Operation...............................................................     27
                      (3)      Reregistration..........................................................     28
             (b)      Possession and Subleases.........................................................     28
             (c)      Insignia.........................................................................     32

         SECTION 8.   Replacement and Pooling of Parts; Alterations,
                      Modifications and Additions......................................................     33
             (a)      Replacement of Parts.............................................................     33
             (b)      Pooling of Parts.................................................................     33
             (c)      Alterations, Modifications and Additions.........................................     34

         SECTION 9.   Voluntary Termination............................................................     35
             (a)      Termination Event................................................................     35
</TABLE>

                                       i
<PAGE>

<TABLE>
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             (b)      Option to Purchase................................................................    36
             (c)      Optional Sale of the Aircraft.....................................................    36
             (d)      Termination as to Engines.........................................................    38

         SECTION 10.  Loss, Destruction, Requisition, etc...............................................    38
             (a)      Event of Loss with Respect to the Aircraft........................................    38
             (b)      Event of Loss with Respect to an Engine...........................................    41
             (c)      Application of Payments from Governmental Authorities
                      for Requisition of Title, etc.....................................................    42
             (d)      Requisition for Use of the Aircraft by the United States
                      Government or Government of Registry of the Aircraft..............................    43
             (e)      Requisition for Use of an Engine by the United States
                      Government or the Government of Registry of the Aircraft..........................    44
             (f)      Application of Payments During Existence of Events of Default.....................    44

         SECTION 11.  Insurance.........................................................................    45
             (a)      Public Liability and Property Damage Insurance....................................    45
             (b)      Insurance Against Loss or Damage to the Aircraft..................................    45
             (c)      Reports, etc......................................................................    47
             (d)      Self-Insurance....................................................................    48
             (e)      Additional Insurance by Lessor and Lessee.........................................    48
             (f)      Indemnification by Government in Lieu of Insurance................................    48
             (g)      Application of Payments During Existence of an Event of Default...................    49
             (h)      Terms of Insurance Policies.......................................................    49

         SECTION 12.  Inspection........................................................................    50

         SECTION 13.  Assignment........................................................................    51

         SECTION 14.  Events of Default.................................................................    51

         SECTION 15.  Remedies..........................................................................    53

         SECTION 16.  Lessee's Cooperation Concerning Certain Matters...................................    56

         SECTION 17.  Notices...........................................................................    57

         SECTION 18.  No Set-Off, Counterclaim, Etc.....................................................    58

         SECTION 19.  Renewal Options; Purchase Options; Valuation......................................    58
             (a)      Renewal Options...................................................................    58
                      (1)      Fixed Renewal Term.......................................................    59
                      (2)      Fair Market Renewal Term.................................................    59
                      (3)      Waiver...................................................................    59
</TABLE>

                                      ii
<PAGE>

<TABLE>
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                      (4)      Conditions Precedent; Payment of Basic Rent..............................    59
             (b)      Purchase Options..................................................................    60
             (c)      Valuation.........................................................................    60

         SECTION 20.  Security for Lessor's Obligation to Holders of Certificates.......................    61

         SECTION 21.  Lessor's Right to Perform for Lessee..............................................    62

         SECTION 22.  Investment of Security Funds; Liability of Lessor Limited.........................    63
             (a)      Investment of Security Funds......................................................    63
             (b)      Liability of Lessor Limited.......................................................    63

         SECTION 23.  Miscellaneous.....................................................................    63

         SECTION 24.  Certain Rights with Respect to the Japanese Lease.................................    64

         SECTION 25.  Certain Rights with Respect to the Relevant Documents.............................    64

         SECTION 26.  Bankruptcy........................................................................    64

         SECTION 27.  Effectiveness.....................................................................    65
</TABLE>

                                   EXHIBITS
                                   --------

EXHIBIT A         -        Form of Amended and Restated Lease Supplement
EXHIBIT B         -        Basic Rent and Excess Amount Schedule
EXHIBIT B-1       -        Rent Allocation Schedule
EXHIBIT C         -        Stipulated Loss Value Schedule
EXHIBIT D         -        Termination Value Schedule
EXHIBIT E         -        Rent Recalculation and Indemnification Verification
EXHIBIT F         -        Schedule of Permitted Sublessees
EXHIBIT G         -        Schedule of Registration Countries
EXHIBIT H         -        Schedule of Fixed Renewal Rent and Fair Market
                           Renewal Rent

                                      iii
<PAGE>

                  FIRST AMENDED AND RESTATED LEASE AGREEMENT
                                   (1989 I)

          This FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I), dated as of
July 20, 2000, between STATE STREET BANK AND TRUST COMPANY, a Massachusetts
trust company, not in its individual capacity, except as expressly provided
herein, but solely as Owner Trustee under the Trust Agreement (as defined in
Section 1 hereof) (in such capacity, "Lessor") and UNITED AIR LINES, INC., a
corporation organized and existing pursuant to the laws of the State of Delaware
("Lessee") amends and restates in its entirety that certain Lease Agreement
(1989 I) dated as of August 1, 1989 (the "Initial Lease") between BANCBOSTON
UNITED LEASING LLC, a Delaware limited liability company (the "Original
Lessor"), and Lessee, as supplemented by that certain Lease Supplement (1989 I)
No. 1 dated as of August 16, 1989 (the "Original Lease Supplement") between
Original Lessor and Lessee, and as amended by that certain First Amendment to
Lease Agreement (1989 I) dated as of February 1, 1990 (the "First Amendment")
between Original Lessor and Lessee (the Initial Lease, as supplemented by the
Original Lease Supplement and as amended by the First Amendment, shall
hereinafter be collectively referred to as the "Original Lease");

                                  WITNESSETH:

     WHEREAS, pursuant to the Original Lease, Lessee has leased from Lessor the
Aircraft, being one (1) Boeing 747-422 aircraft which consists of the following
components: (i) Airframe: U.S. Registration No. N171UA, manufacturer's serial
no. 24322 and (ii) Engines: four (4) Pratt & Whitney model PW4056 aircraft
engines bearing, respectively, manufacturer's serial numbers P717550, P717551,
P717552 and P717573;

     WHEREAS, a counterpart of the Initial Lease, to which was attached and made
a part thereof a counterpart of the Original Lease Supplement, was recorded by
the Federal Aviation Administration on August 17, 1989 and assigned Conveyance
No. Q40444;

     WHEREAS, a counterpart of the First Amendment was recorded by the Federal
Aviation Administration on February 16, 1990 and assigned Conveyance No. M22314;

     WHEREAS, Lessor and Lessee desire to amend and restate the Original Lease
in its entirety and Lessor, Owner Participant and Lessee desire and intend that
the terms, provisions and agreements herein set forth shall be in force and
effect from and after the Effective Date, and the provisions of the Original
Lease shall govern the transactions from and after the Delivery Date through the
date immediately preceding the Effective Date.

     SECTION 1.  Definitions.  Unless the context otherwise requires, the
                 -----------
following terms shall have the following meanings for all purposes of this Lease
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms herein defined:
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Additional Insured" means Lessor, in its individual capacity and as owner
of the Aircraft, the Indenture Trustee, the Owner Participant, Lessee in its
capacity as sublessor under any Sublease, the Liquidity Provider (on and after
the Refinancing Date only), the Subordination Agent (on and after the
Refinancing Date only) (so long as it is the registered holder of any
Certificate on behalf of the Pass Through Trustees), and, on and after the
Refinancing Date only, so long as the Pass Through Trustees are Certificate
Holders, each Pass Through Trustee, and each of their respective Affiliates,
successors and permitted assigns, and the respective directors, officers and
employees of each of the foregoing.

     "Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with, such Person.

     "Aircraft" means the Airframe together with the four Engines whether or not
such Engines are installed on the Airframe or any other airframe.

     "Airframe" means: (i) The Boeing Company Model 747-422 aircraft (except
Engines or engines from time to time installed thereon) bearing United States
Registration Number N171UA and Manufacturer's serial number 24322; (ii) any and
all Parts which are from time to time incorporated or installed in or attached
to such airframe (except Engines or engines from time to time installed thereon)
or which have been removed therefrom (except Engines or engines from time to
time installed thereon), but where legal title to which remains vested in Lessor
(or, so long as the Japanese Lease is in effect, where legal title remains in
the Primary Lessor, subject to the rights of Lessee under the Japanese Lease and
Lessor under the Japanese Lease Assignment) in accordance herewith (or with the
Japanese Lease, so long as the Japanese Lease is in effect); and (iii) any
replacement airframe which may from time to time be substituted pursuant to
Section 10(a)(ii) hereof.

     "Applicable Rate" means blended debt rate of the Pass Through Equipment
Notes, upon the issuance thereof in accordance with the Note Purchase Agreement.

     "Assignment and Assumption Agreement" means that certain Assignment and
Assumption Agreement (1989 I) dated as of December 6, 1999 between BankBoston,
N.A., as assignor, and BancBoston United Leasing LLC, as assignee, recorded by
the FAA on December 8, 1999 as Conveyance No. P21816.

     "Bank" means Algemene Bank Nederland N.V., a banking corporation organized
under the laws of the Netherlands and acting through its main office in
Amsterdam, the Netherlands.

     "Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. (S)101
et seq, as amended from time to time.
-- ---

                                       2
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Base Rate" means the rate of interest announced from time to time by The
First National Bank of Boston at its principal office in Boston, Massachusetts
as its "Base Rate" (or its equivalent successor rate if the Base Rate is no
longer used).

     "Basic Rent" means, for the Basic Term, the rent payable for the Aircraft
pursuant to Section 3(b), adjusted as provided in Section 3(c) and, for a
Renewal Term, Basic Rent determined pursuant to Section 19.

     "Basic Term" means the term for which the Aircraft is leased hereunder
pursuant to Section 2 hereof beginning on the Commencement Date and ending on
February 15, 2015, or such earlier date as this Lease may be terminated in
accordance with the provisions hereof.

     "Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in the City of
Chicago, Illinois; New York City, New York; Boston, Massachusetts, Tokyo, Japan;
or, so long as any Certificate is outstanding, the city and state in which the
principal place of business of the Indenture Trustee is located.

     "Certificate" means each "Equipment Note" issued under, and as defined in,
the Trust Indenture.

     "Certificate Holder" means any holder from time to time of one or more
Certificates, as registered on the Registrar's books as of any date of
determination.

     "Citizen of the United States" has the meaning given such term in Section
40102(a)(15) of Title 49 of the United States Code.

     "Civil Reserve Air Fleet Program" shall mean the Civil Reserve Air Fleet
Program administered by the United States Government pursuant to Executive Order
No. 11490, as amended, or any substantially similar program.

     "Code" means the Internal Revenue Code of 1986, as amended through the
Delivery Date.

     "Commencement Date" means February 15, 1990.

     "Commitment" means the commitment of the Original Lessor to finance the
Original Lessor's payment of Lessor's Cost for the Aircraft.

     "Default" means any event which with the giving of notice or the lapse of
time or both would become an Event of Default pursuant to Section 14(a), (b),
(c), (d) or (e).

                                       3
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Delivery Date" means August 16, 1989.

     "Dollars" and "$" mean the lawful currency of the United States of America.

     "Effective Date" means July 20, 2000.

     "Engine" means (i) each of the United Technologies Corporation, Pratt &
Whitney Group, Model PW4056 engines bearing manufacturer's serial numbers
P717550, P717551, P717552 and P717573 and installed on the Airframe on the
Delivery Date, whether or not from time to time thereafter installed on such
Airframe or any other airframe; (ii) any replacement engine which may from time
to time be substituted for any of such four engines pursuant to the terms
hereof; and (iii) with respect to any such engine, any and all Parts which are
from time to time incorporated or installed in or attached to any such engine
and any and all parts removed therefrom so long as legal title thereto remains
vested in Lessor (or, so long as the Japanese Lease is in effect, where legal
title remains in the Primary Lessor, subject to the rights of Lessee under the
Japanese Lease and Lessor under the Japanese Lease Assignment) in accordance
herewith (or with the Japanese Lease, so long as the Japanese Lease is in
effect). The term "Engines" means, as of any date of determination, all Engines
then leased hereunder.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "Event of Default" has the meaning specified in Section 14 hereof.

     "Event of Loss" with respect to the Aircraft, the Airframe or any Engine
means any of the following events with respect to such property: (i) the loss of
such property or of the use thereof due to the destruction of or damage to such
property which renders repair uneconomic or which renders such property
permanently unfit for normal use by Lessee for any reason whatsoever; (ii) any
damage to such property which results in an insurance settlement with respect to
such property on the basis of a total loss, or a constructive or compromised
total loss; (iii) the theft or disappearance of such property, or the
confiscation, condemnation, or seizure of, or requisition of title to, or use
of, such property by any governmental or purported governmental authority (other
than a requisition of use by the United States Government or any other
government of registry of the Aircraft, or any agency or instrumentality of any
thereof), which in the case of any event referred to in this clause (iii) shall
have resulted in the loss of possession of such property by Lessee for a period
in excess of 180 consecutive days or, if earlier, the end of the Term; (iv) as a
result of any law, rule, regulation, order or other action by the FAA or other
governmental body of the government of registry of the Aircraft having
jurisdiction, use of such property in the normal course of the business of air
transportation shall have been prohibited for a period of 180 consecutive days,
unless Lessee, prior to the expiration of such 180 day period, shall have
undertaken and shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such property by Lessee, but
in any event if such use shall have been prohibited for a period of two
consecutive years, provided that no Event of Loss shall be deemed

                                       4
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

to have occurred pursuant to this clause (iv) if such prohibition has been
applicable to Lessee's entire U.S. registered fleet of Boeing Model 747-400
aircraft and Lessee, prior to the expiration of such two year period, shall have
conformed at least one such aircraft in its fleet to the requirements of any
such law, rule, regulation, order or other action and commenced regular
commercial use of the same in such jurisdiction and shall be diligently carrying
forward, in a manner which does not discriminate against the Aircraft in so
conforming the Aircraft, all steps which are necessary or desirable to permit
the normal use of the Aircraft by Lessee; (v) the requisition for use by the
United States Government or any other government of registry of the Aircraft or
any instrumentality or agency of any thereof, which shall have occurred during
the Basic Term (or the Interim Term or any Renewal Term) and shall have
continued for 30 days beyond the Term, unless Lessor shall have furnished the
written notice specified in Section 10(d) hereof; and (vi) with respect to any
Engine, any divestiture of title to such Engine treated as an Event of Loss
pursuant to Section 7(b) hereof. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if an Event of Loss occurs with respect to the
Airframe.

     "Excess Amount" for the Commencement Date means an amount determined by
multiplying Lessor's Cost by the percentage specified in Exhibit B hereto
opposite the Commencement Date (as such Exhibit B may be adjusted from time to
time as provided in Section 3(c) hereof).

     "Excluded Payments" has the meaning set forth in Section 1.01 of the
Indenture.

     "Expenses" means any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, out-of-pocket costs, expenses and
disbursements (including, without limitation, reasonable legal fees and expenses
and Transaction Expenses to the extent not required to be paid by Lessor
pursuant to Section 16 of the Original Participation Agreement and all costs and
expenses relating to amendments, supplements, waivers and consents to and under
the Operative Documents, but excluding internal costs and expenses such as
salaries and overhead) of whatsoever kind and nature.

     "Fair Market Rental Value" means the fair market rental value determined as
provided in Section 19(c) hereof.

     "Fair Market Sales Value" means the fair market sales value determined as
provided in Sections 19(a) and 19(c) hereof.

     "Federal Aviation Act" means the provisions of Title 49 of the U.S. Code,
formerly known as the Federal Aviation Act of 1958, as amended.

     "Federal Aviation Administration" and "FAA" mean the United States Federal
Aviation Administration and any successor agency or agencies thereto.

                                       5
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Indemnitees" means the Owner Participant, the Owner Participant Guarantor,
the Owner Trustee, in its individual capacity and as trustee under the Trust
Agreement, the Trust Estate, the Indenture Estate, the Indenture Trustee, in its
individual capacity and as trustee under the Trust Indenture, the Subordination
Agent (on or after the Refinancing Date only) (so long as it is the registered
holder of any Certificate on behalf of the Pass Through Trustees, each Pass
Through Trustee (on and after the Refinancing Date only) (so long as the Pass
Through Trustees are Certificate Holders), the Liquidity Provider (on and after
the Refinancing Date only), and each of their respective Affiliates, successors,
permitted assigns, directors, officers, employees, servants and agents.

     "Indenture Estate" has the meaning set forth in the Trust Indenture.

     "Indenture Trustee" means the Indenture Trustee under the Trust Indenture,
and any entity which may from time to time be acting as trustee under the Trust
Indenture.

     "Indenture Trustee Documents" means the Participation Agreement and the
Trust Indenture.

     "Initial Lease" shall have the meaning set forth in the preamble hereof.

     "Intercreditor Agreement" has the meaning ascribed to it in the Trust
Indenture.

     "Interim Rent" means the amount determined by multiplying Lessor's Cost by
the percentage specified in Exhibit B hereto opposite the Commencement Date
under the heading "Interim Rent" (as such Exhibit B may be adjusted from time to
time as provided in Section 3(c) hereof).

     "Interim Term" means the period commencing on the Delivery Date and ending
on and including the day immediately preceding the Commencement Date unless
earlier terminated in accordance with the provisions hereof.

     "Japanese Assumption Agreement" means the Assumption Agreement dated as of
July 28, 1989, between Lessee and Bank.

     "Japanese Confirmation" means the Confirmation and Agreement, dated July
28, 1989, executed by Primary Lessor and Bank.

     "Japanese Delivery Date" means July 28, 1989.

     "Japanese FAA Bill of Sale" means that certain bill of sale for the
Aircraft on AC Form 8050-2 or such other form as may be approved by the FAA on
the Japanese Delivery Date, executed by Lessee in favor of Primary Lessor.

                                       6
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Japanese Lease" means that certain Lease Agreement dated as of July 28,
1989, as supplemented by the Japanese Lease Supplement dated as of July 28,
1989, between Primary Lessor and Lessee, as such Japanese Lease may be amended
or further supplemented from time to time pursuant to the provisions thereof.

     "Japanese Lease Assignment" means the Assignment of Japanese Lease
Agreement dated as of August 1, 1989, as supplemented by the Japanese Lease
Assignment Supplement dated the Delivery Date, between Lessee and Lessor.

     "Japanese Lease Assignment Supplement" means the Japanese Lease Assignment
Supplement entered into between Lessee and Lessor on the Delivery Date pursuant
to the terms of the Japanese Lease Assignment, and any subsequent Japanese Lease
Assignment Supplement entered into in accordance with the Japanese Lease
Assignment.

     "Japanese Lease Event of Default" means an Event of Default as defined in
the Japanese Lease.

     "Japanese Lease Supplement" means a Lease Supplement entered into between
Primary Lessor and Lessee on the Delivery Date pursuant to the terms of the
Japanese Lease, and any subsequent Japanese Lease Supplement entered into in
accordance with the terms of the Japanese Lease.

     "Japanese Warranty Bill of Sale" means that certain bill of sale for the
Aircraft, dated the Japanese Delivery Date, executed by Lessee in favor of
Primary Lessor.

     "Lease Agreement", "this Lease Agreement", "this Lease", "this Agreement",
"herein", "hereof", "hereunder", "hereby", or other like words mean this Amended
and Restated Lease Agreement (1989 I) as originally executed or as modified,
amended or supplemented pursuant to the applicable provisions hereof, including,
without limitation, supplementation hereof by any Lease Supplement entered into
pursuant to the applicable provisions hereof.

     "Lease Period" means each of the consecutive semi-annual periods throughout
the Basic Term and any Renewal Term ending on a Lease Period Date, the first
such period commencing on and including the Effective Date.

     "Lease Period Date" means each Lease Period Date which occurred under the
Original Lease through the Effective Date, January 1, 2001 and each succeeding
January 1 and July 1, to and including the last such date in the Term.

     "Lease Supplement" means the Original Lease Supplement and any subsequent
Lease Supplement (1989 I) entered into in accordance with the terms hereof
substantially in the form of Exhibit A hereto.

                                       7
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Lessee Documents" means the Purchase Agreement, the Omnibus Agreement, the
Japanese Warranty Bill of Sale, the Japanese FAA Bill of Sale, the Japanese
Lease, any Japanese Lease Supplement, the Japanese Assumption Agreement, the
Original Participation Agreement, the Participation Agreement, the Lessor's
Purchase Agreement, the Japanese Lease Assignment, any Japanese Lease Assignment
Supplement, the Trust Indenture, any Trust Supplement, the Original Lease, this
Lease, any Lease Supplement, the Tax Indemnity Agreement, an acceptance
certificate covering the Aircraft in the form agreed to by Primary Lessor and
Lessee, an acceptance certificate covering the Aircraft in the form agreed to by
Lessee and Lessor, each Pass Through Trust Agreement (on and after the
Refinancing Date only), each Pass Through Trust Agreement Supplement (on and
after the Refinancing Date only), and any other document executed by Lessee in
connection with the transactions contemplated by the Operative Documents.

     "Lessor" means State Street Bank and Trust Company, a Massachusetts trust
company, not in its individual capacity except as expressly set forth herein,
but solely as Owner Trustee under the Trust Agreement.

     "Lessor Aircraft Assets" means all estate, right, title and interest of
Lessor in and to the Aircraft, the Lease, any Lease Supplement, the Purchase
Agreement, the Japanese Lease, any Japanese Lease Supplement, the Primary Lessor
Mortgage, Sections 11 and 23(b) of the Omnibus Agreement, the Primary Lessor
Comfort Letter, the Japanese Lease Assignment, the Japanese Lease Assignment
Supplement and the Lessor's Purchase Agreement, including, without limitation,
all amounts of Basic Rent and Supplemental Rent including without limitation
insurance proceeds (other than insurance proceeds payable to or for the benefit
of Lessor or the Indenture Trustee) and requisition, indemnity or other payments
of any kind for or with respect to the Aircraft (except amounts owing to Lessor,
to the Indenture Trustee or to any Certificate Holder, or to any of their
respective directors, officers, employees, servants and agents, pursuant to
Section 7 of the Participation Agreement). Notwithstanding the foregoing,
"Lessor Aircraft Assets" shall not include any Excluded Payment.

     "Lessor Documents" means the Original Participation Agreement, the
Participation Agreement, the Lessor's Purchase Agreement, the Japanese Lease
Assignment, the Japanese Lease Assignment Supplement, the Original Trust
Indenture, the Trust Indenture, any Trust Supplement, the Original Lease, this
Lease Agreement, any Lease Supplement, the Tax Indemnity Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by Lessor and
Lessee and the Certificates.

     "Lessor Liens" means any Lien on, or disposition of title to, the Aircraft
or the Trust Estate arising as a result of (i) claims against Lessor, in its
individual capacity, or the Owner Participant, not related to the transactions
contemplated by the Operative Documents, (ii) any act or omission of the Owner
Participant, Lessor, or State Street Bank and Trust Company, in its individual
capacity, which is not related to the transactions contemplated by the Operative

                                       8
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Documents or is in violation of any of the terms of the Operative Documents,
(iii) claims against the Owner Participant, Lessor or State Street Bank and
Trust Company, in its individual capacity, with respect to Taxes or Expenses
against which Lessee is not required to indemnify the Owner Participant, Lessor
or State Street Bank and Trust Company, in its individual capacity or (iv)
claims against Lessor or Owner Participant arising out of any transfer by Lessor
of all or any portion of the interest of Lessor or Owner Participant in all or
any portion of the respective interests of Lessor or the Owner Participant in
the Aircraft, the Trust Estate or the Operative Documents (other than a transfer
of possession of the Aircraft by Lessor pursuant to this Agreement, a transfer
pursuant to the Trust Indenture or a transfer pursuant to Section 8, 9, 10 or 19
hereof or pursuant to the exercise of the remedies set forth in Section 15
hereof); provided, however, that any Lien which is attributable solely to State
Street Bank and Trust Company, in its individual capacity, or the Owner
Participant and would otherwise constitute a Lessor Lien hereunder shall not
constitute a Lessor Lien hereunder so long as (1) the existence of such Lien
poses no material risk of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (2) the existence of such Lien does not
interfere in any way with the use or operation of the Aircraft by Lessee (or any
Sublessee), (3) the existence of such Lien does not affect the priority or
perfection of, or otherwise jeopardize, the Lien of the Trust Indenture, (4)
State Street Bank and Trust Company, in its individual capacity, or the Owner
Participant (as the case may be) is diligently contesting such Lien by
appropriate proceeding and (5) the existence of such Lien does not result in
actual interruption in the payment of Rent assigned to the Indenture Trustee for
the benefit of the Certificate Holders.

     "Lessor's Consent and Agreement" means the Lessor's Consent and Agreement
(1989 I) dated as of the Delivery Date, executed by the Manufacturer, as the
same may be amended, modified or supplemented from time to time in accordance
with the applicable provisions thereof.

     "Lessor's Cost" for the Aircraft means an amount of cash equal to
$125,000,000.

     "Lessor's Purchase Agreement" means the Lessor's Purchase Agreement and
Assignment (1989 I), dated the Delivery Date, between Lessee and Lessor, as the
same may be amended, modified or supplemented from time to time in accordance
with the applicable provisions thereof.

     "Lien" means any mortgage, pledge, lien, charge, claim, encumbrance, lease
or security interest.

     "Make-Whole Amount" has the meaning ascribed to it in the Trust Indenture.

     "Manufacturer" means The Boeing Company, a Delaware corporation.

                                       9
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Manufacturer Documents" means the Purchase Agreement, the Lessor's Consent
and Agreement, the Manufacturer's Warranty Bill of Sale and the Manufacturer's
FAA Bill of Sale.

     "Manufacturer's FAA Bill of Sale " means that certain bill of sale for the
Aircraft on AC Form 8050-2 or such other form as may be approved by the FAA on
the Japanese Delivery Date, executed by the Manufacturer in favor of Lessee.

     "Manufacturer's Warranty Bill of Sale" means that certain bill of sale for
the Aircraft, dated the Japanese Delivery Date, executed by the Manufacturer in
favor of Lessee.

     "Multiemployer Plan" has the meaning ascribed to it in ERISA.

     "Net Economic Return" means the Owner Participant's weighted average after-
tax annual return on assets (after giving effect to its expected investment
period and after-tax interest income and expense on positive and negative cash
balances), computed on the basis of the same methodology and assumptions as were
utilized by Lessor in determining Basic Rent, Excess Amount, and Stipulated Loss
Value and Termination Value percentages as of the Delivery Date, as such
assumptions may be adjusted from time to time to take into account the impact of
any change of the type specified in Section 3(c) hereof.

     "Net Present Value of Rents" means the net present value, as of the
Delivery Date, of Basic Rent set forth in Exhibit B hereto, discounted at a rate
per Lease Period equal to (a) the Applicable Rate divided by (b) the number of
Lease Periods per year.

     "Note Purchase Agreement" means that certain 747 Leased Equipment Note
Purchase Agreement to be entered into on or before the Refinancing Date, among
State Street Bank and Trust Company, as Owner Trustee, BancBoston United Leasing
LLC, as Owner Participant, United Air Lines, Inc., as Lessee, and State Street
Bank and Trust Company of Connecticut, National Association, as Pass Through
Trustee under each Pass Through Trust Agreement, Subordination Agent and
Indenture Trustee.

     "Obsolete Parts" shall have the meaning set forth in Section 8(c) hereof.

     "Omnibus Agreement" means that certain Omnibus Agreement dated July 28,
1989, between Primary Lessor, Lessee and Primary Lender.

     "Operative Documents" means the Purchase Agreement, the Manufacturer's
Warranty Bill of Sale, the Manufacturer's FAA Bill of Sale, the Omnibus
Agreement, the Japanese Warranty Bill of Sale, the Japanese FAA Bill of Sale,
the Primary Loan Agreement, the Japanese Lease (including any Japanese Lease
Supplement), the Primary Lessor Mortgage, the Japanese Assumption Agreement, the
Japanese Confirmation, the Primary Lessor Comfort Letter, the Parent Letter, the
Participation Agreement, the Lessor's Purchase Agreement, the Lessor's

                                       10
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Consent and Agreement, the Japanese Lease Assignment (including the Japanese
Lease Assignment Supplement), the Trust Indenture (including any Trust
Supplement), the Lease (including any Lease Supplement), the Certificates, the
Tax Indemnity Agreement, the Note Purchase Agreement (upon the execution
thereof), the Original Lease, the Original Participation Agreement, the Original
Trust Indenture, the Owner Participant Guaranty Agreement, the Trust Agreement,
the Assignment and Assumption Agreement, an acceptance certificate covering the
Aircraft in the form agreed to by Primary Lessor and Lessee, and an acceptance
certificate covering the Aircraft in the form agreed to by Lessor and Lessee.

     "Original Amount" means, with respect to a Certificate, the stated original
principal amount of such Certificate, and with respect to all the Certificates
means the aggregate stated original principal amounts of such Certificates, as
the case may be.

     "Original Lease" shall have the meaning set forth in the Preamble hereof.

     "Original Lease Supplement" shall have the meaning specified in the
preamble hereto.

     "Original Lessor" shall have the meaning set forth in the Preamble hereof.

     "Original Participation Agreement" shall mean that certain Participation
Agreement (1989 I) dated as of August 1, 1989, as amended by that certain First
Amendment to Participation Agreement (1989 I) dated as of February 1, 1990, in
each case among United Air Lines, Inc., as lessee, BancBoston United Leasing
LLC, as lessor, and State Street Bank and Trust Company of Connecticut, National
Association, as successor to the Connecticut Bank and Trust Company, National
Association, in its individual capacity and as Indenture Trustee.

     "Original Trust Indenture" shall mean that certain Trust Indenture and
Security Agreement (1989 I) dated as of August 1, 1989 among BancBoston United
Leasing LLC, as lessor, State Street Bank and Trust Company of Connecticut,
National Association, as successor to The Connecticut Bank and Trust Company,
National Association, as Indenture Trustee, and Lessee, as supplemented by that
certain Trust Indenture and Security Agreement Supplement No. 1 dated as of
August 16, 1989, and as amended by that certain First Amendment to Trust
Indenture and Security Agreement (1989 I) dated as of February 1, 1990.

     "Owner Participant" means the Person executing the Participation Agreement
as the Owner Participant and any Person to which such Person transfers all or
any portion of its right, title and interest in and to the Trust Agreement, the
Trust Estate and the Participation Agreement, to the extent permitted thereby.

     "Owner Participant Documents" means the Participation Agreement, the Trust
Agreement, the Tax Indemnity Agreement, the Assignment and Assumption Agreement
and any

                                       11
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

other documents executed by the Owner Participant in connection with the
transactions contemplated by the Participation Agreement and the other Operative
Documents.

     "Owner Participant Guarantor" means Fleet National Bank.

     "Owner Participant Guaranty Agreement" means that certain Amended and
Restated Guaranty, dated as of the date hereof, made by Owner Participant
Guarantor in favor of Lessee and the Indenture Trustee, as such agreement may be
amended or supplemented from time to time pursuant to the applicable provisions
thereof and the terms of the Trust Indenture.

     "Owner Trustee" means the Person executing the Participation Agreement as
Owner Trustee and any Person appointed as successor Owner Trustee in each case
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement, except as otherwise expressly stated.

     "Owner Trustee Documents" means the Participation Agreement, the Trust
Agreement, the Assignment and Assumption Agreement, this Lease, any Lease
Supplement, the Trust Indenture, any Trust Supplement and the Certificates and
any other document executed by the Owner Trustee in connection with the
transactions contemplated by the Participation Agreement and the other Operative
Documents.

     "Participants" means and includes the Owner Participant and the Pass
Through Trustees.

     "Participation Agreement" means the Amended and Restated Participation
Agreement (1989 I), dated as of the date hereof, among Lessee, Lessor, Owner
Participant and the Indenture Trustee, as such Participation Agreement may be
amended or supplemented from time to time pursuant to the applicable provisions
thereof.

     "Parent Letter" means that certain letter dated July 28, 1989 from The
Sanwa Bank Limited to Lessee.

     "Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature other than
complete Engines or engines, which are from time to time incorporated or
installed in or attached to the Airframe or any Engine and all such items which
are subsequently removed therefrom so long as legal title thereto shall vest in
the Lessor (or, so long as the Japanese Lease is in effect, where legal title
remains in the Primary Lessor, subject to the rights of Lessee under the
Japanese Lease and Lessor under the Japanese Lease Assignment) in accordance
with Section 8(a) hereof (or in accordance with the Japanese Lease, if in
effect).

     "Pass Through Certificates" means any of the credit enhanced pass through
certificates issued pursuant to any of the Pass Through Trust Agreements.

                                       12
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Pass Through Documents" means the Pass Through Trust Agreements, the
Intercreditor Agreement, the Note Purchase Agreement and the Liquidity
Facilities.

     "Pass Through Trust" means each of the Class A-1, A-2, B and C-2 pass
through trusts created pursuant to the related Pass Through Trust Agreement.

     "Pass Through Trust Agreements" means each of the A-1, A-2, B and C-2 Pass
Through Trust Supplements, together in each case with the Basic Pass Through
Trust Agreement, each to be entered into on the Refinancing Date by and between
the Lessee and a Pass Through Trustee as contemplated by the Note Purchase
Agreement.

     "Pass Through Trust Supplement" shall have the meaning specified for the
term "Trust Supplement" in any of the Pass Through Trust Agreements.

     "Pass Through Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, in its capacity as trustee under each Pass
Through Trust Agreement, and such other Person that may from time to time be
acting as successor trustee under any such Pass Through Trust Agreement.

     "Past Due Rate" means (i) with respect to the portion of any payment of
Rent that may be required by the Trust Indenture to be paid by the Indenture
Trustee to any Certificate Holder, the "Past Due Rate" as defined in the Trust
Indenture and (ii) with respect to the remaining portion of any payment of Rent
(and the entire amount of any payment of Rent after the satisfaction and
discharge of the Trust Indenture), a rate per annum equal to 1% over the Base
Rate.

     "Permitted Lien" means any Lien referred to in clauses (i) through (vii) of
Section 6 hereof.

     "Permitted Sublessee" means any air carrier domiciled and principally
located in a country listed in Exhibit F hereto as in effect from time to time,
and with which country the United States maintains diplomatic relations at the
time of such sublease (no action need be taken by Lessee if such diplomatic
relations are severed subsequent to such sublease).

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

     "Plan" means an employee benefit plan within the meaning of Section 3(3) of
ERISA.

     "Primary Lender" means Algemene Bank Nederland N.V., acting through its
Tokyo branch.

                                       13
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Primary Lessor" means SBF West Air Co., Ltd., a corporation organized
under the laws of Japan.

     "Primary Lessor Comfort Letter" means that certain letter dated July 28,
1989 from Sanwa Business Finance Co., Ltd., the parent of Primary Lessor, to
Lessee.

     "Primary Lessor Mortgage" means that certain Aircraft Mortgage and Security
Agreement dated as of July 28, 1989, executed by Primary Lessor in favor of
Lessee.

     "Primary Loan Agreement" means the Loan Agreement, dated as of July 28,
1989, between Primary Lessor and Primary Lender.

     "Purchase Agreement" means the agreement between Lessee and the
Manufacturer relating to the purchase by Lessee of the Aircraft, as originally
executed or as modified, amended or supplemented in accordance with the terms
thereof, but only insofar as the foregoing relates to the Aircraft.

     "Refinancing Date" means the date on which the Pass Through Trustee issues
the Pass Through Certificates under the Pass Through Trust Agreements as
contemplated by the Note Purchase Agreement.

     "Registrar" has the meaning set forth in Section 1.01(b) of the Trust
Indenture.

     "Reimbursement Amount" has the meaning set forth in Section 3(f) hereof.

     "Relevant Documents" means the Omnibus Agreement, the Japanese Warranty
Bill of Sale, the Japanese FAA Bill of Sale, the Primary Loan Agreement, the
Japanese Lease (including any Japanese Lease Supplement), the Primary Lessor
Mortgage, the Japanese Assumption Agreement, the Japanese Confirmation, the
Primary Lessor Comfort Letter, the Parent Letter, and an acceptance certificate
covering the Aircraft in the form agreed to by Primary Lessor and Lessee.

     "Renewal Term" means the Fixed Renewal Term or any Fair Market Renewal Term
as those terms are defined in Section 19 hereof.

     "Rent" means Basic Rent and Supplemental Rent, collectively.

     "Restricted Period" shall mean the period from the Delivery Date until
December 31, 1996.

     "Stipulated Loss Value" with respect to the Aircraft as of any date through
and including the last day of the Basic Term, means the amount determined by
multiplying Lessor's Cost for

                                       14
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

the Aircraft by the percentage specified in Exhibit C hereto opposite the
Stipulated Loss Value Date with respect to which the amount of Stipulated Loss
Value is determined (as such Exhibit C may be adjusted from time to time as
provided in Section 3(c) hereof and in Section 8 of the Tax Indemnity
Agreement). "Stipulated Loss Value" with respect to the Aircraft, as of any date
during any Renewal Term, shall be the amount determined as provided in Section
19 hereof, as such amount may be adjusted from time to time. The Stipulated Loss
Values as determined pursuant to this Lease or the Tax Indemnity Agreement shall
be at all times sufficient to repay the aggregate unpaid principal amount of the
outstanding Certificates, together with all unpaid interest accrued thereon. It
is understood and agreed that the percentages specified in Exhibit C take fully
into account the amount and application of each installment of Basic Rent, so
that no additional accrual or credit of Basic Rent is to be made in respect
thereof, except as otherwise expressly provided herein. To the extent that an
event giving rise to an obligation to pay any Stipulated Loss Value occurs, and
the actual date on which the loss of tax benefits resulting from such event
occurs shall be earlier or later than the date assumed in calculating the
Federal income tax consequences reflected in the applicable Stipulated Loss
Value, such Stipulated Loss Value shall be appropriately adjusted to reflect the
actual date of such event, but shall be otherwise based on the original
assumptions used in determining such Stipulated Loss Value.

     "Stipulated Loss Value Date" means the 15th calendar day of each calendar
month during the Interim Term, the Basic Term and any Renewal Term.

     "Sublease" means any sublease permitted by the terms of Section 7(b)(viii)
hereof.

     "Sublessee" means any Person for so long, but only so long, as such Person
is in possession of the Airframe and/or any Engine pursuant to the terms of a
Sublease which is then in effect pursuant to Section 7(b)(viii) hereof.

     "Supplemental Rent" means all amounts, liabilities and obligations (other
than Interim Rent and Basic Rent) which Lessee assumes or agrees to pay to
Lessor or others hereunder or under any of the other Operative Documents
(excluding, however, any amounts, liabilities or obligations referenced in the
Relevant Documents), including, without limitation, any amount payable by the
Owner Trustee under Section 2.01 of the Indenture, payments of Stipulated Loss
Value and Termination Value and amounts calculated by reference thereto, premium
on the Certificates and indemnity payments. The parties acknowledge that
Supplemental Rent is a general category and, accordingly, agree that any
provision of any Operative Document which calls for the payment of Supplemental
Rent and also calls for the payment of specific items which are includable in
Supplemental Rent is not to be interpreted as requiring any double payment.

     "Tax Indemnity Agreement" means that certain Amended and Restated Tax
Indemnity Agreement (1989 I), dated as of the date hereof, between Owner
Participant and Lessee, as

                                       15
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

originally executed or as modified, amended or supplemented pursuant to the
applicable provisions thereof.

     "Tax Indemnitee" means the Owner Participant, the Owner Participant
Guarantor, the Owner Trustee, in its individual capacity and as trustee under
the Trust Agreement, the Trust Estate, the Indenture Estate, the Indenture
Trustee, in its individual capacity and as trustee under the Trust Indenture,
each Pass Through Trustee (so long as the Pass Through Trustees are Certificate
Holders) solely in its capacity as Pass Through Trustee but not as a Certificate
Holder, and each of their respective Affiliates, successors, permitted assigns,
directors, officers, employees, servants and agents.

     "Taxes" means any and all fees (including, without limitation, license,
documentation and registration fees), taxes (including, without limitation,
income, gross receipts, sales, rental, use, turnover, value added, property
(tangible and intangible), excise and stamp taxes), licenses levies, imposts,
duties, recording charges or fees, charges, assessments, or withholdings of any
nature whatsoever, together with any assessments, penalties, fines, additions to
tax and interest thereon.

     "Taxing Authority" means any federal, state or local government or other
taxing authority in the United States or any foreign government or any political
subdivision or taxing authority thereof or any territory or possession of the
United States or any international authority with the power to imposes Taxes of
any kind.

     "Term" means the Interim Term, the Basic Term and, if actually entered
into, any Renewal Term.

     "Termination Date" has the meaning set forth in Section 9(a)(3) hereof.

     "Termination Value" with respect to the Aircraft as of any date through and
including the last day of the Basic Term means the amount determined by
multiplying Lessor's Cost for the Aircraft by the percentage specified in
Exhibit D hereto opposite the Termination Date with respect to which the amount
of Termination Value is determined (as such Exhibit D may be adjusted from time
to time as provided in Section 3(c) hereof and in Section 8 of the Tax Indemnity
Agreement). The Termination Values as determined pursuant to this Lease or the
Tax Indemnity Agreement shall be at all times sufficient to repay the aggregate
unpaid principal amount of the outstanding Certificates, together with all
unpaid interest accrued thereon. To the extent that an event giving rise to an
obligation to pay any Termination Value occurs, and the actual date on which the
loss of tax benefits resulting from such event occurs shall be earlier or later
than the date assumed in calculating the Federal income tax consequences
reflected in the applicable Termination Value, such Termination Value shall be
appropriately adjusted to reflect the actual date of such event, but shall be
otherwise based on the original assumptions used in determining such Termination
Value.

                                       16
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Transaction Expenses" means (i) the reasonable and actual fees, expenses
and disbursements of (1) Day, Berry & Howard, special counsel for the Indenture
Trustee, (2) Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma,
(3) McDermott, Will & Emery, special counsel for Lessee (but only to the extent
the same relate to documenting and negotiating the transaction and specifically
excluding the same to the extent the same relates to advising Lessee), (4)
Shipman & Goodwin LLP, special counsel for Lessor, (5) Shearman & Sterling,
special counsel to the original Certificate Holder, (6) White & Case, special
counsel to the Holders of the Series A Certificates, and (7) Yuasa and Hara,
special Japanese counsel for Lessor and the Indenture Trustee, (ii) all fees,
taxes and other charges payable in connection with the recording or filing of
instruments and financing statements in connection with the transactions
contemplated hereby, (iii) the initial fee and reasonable and actual
disbursements of the Indenture Trustee under the Trust Indenture, (iv) the fee
of AVMARK, Inc. with respect to the appraisal of the Aircraft required on or
before the Delivery Date pursuant to Section 4(a) (xviii) of the Participation
Agreement, (v) the private placement fees payable pursuant to Section 20(i) of
the Participation Agreement, (vi) printing and distribution costs relating to
the transactions contemplated by the Operative Documents, (vii) all airline
ticket fares, to the extent travel is effected on United Air Lines, Inc.,
incurred by the Certificate Holders in connection with the transactions
contemplated by the Operative Documents, (viii) all reasonable expenses and out-
of-pocket costs of Lessor, not to exceed an aggregate of $10,000, plus all
airline ticket fares, to the extent travel is effected on United Air Lines,
Inc., incurred in connection with the transactions contemplated by the Operative
Documents, (ix) all reasonable expenses and out-of-pocket costs of Lessor or
Owner Participant incurred in connection with the transactions contemplated by
Section 20 of the Original Participation Agreement and (x) the closing fee of
the original Certificate Holder.

     "Trust Agreement" means that certain Trust Agreement (1989 I) dated as of
the date hereof between the Owner Participant and State Street Bank and Trust
Company, in its individual capacity, as originally executed or as modified,
amended or supplemented in accordance with the applicable provisions thereof and
the terms of the Trust Indenture, including, without limitation, any Trust
Supplement entered into pursuant to the applicable provisions thereof.

     "Trust Estate" has the meaning set forth in the Trust Agreement, but in any
event includes all Lessor Aircraft Assets.

     "Trust Indenture" means that certain Amended and Restated Trust Indenture
and Mortgage (1989 I), dated as of the date hereof, between Lessor and the
Indenture Trustee, as originally executed or as modified, amended or
supplemented in accordance with the provisions thereof.

     "Trust Indenture Estate" has the meaning assigned to the term "Indenture
Estate" in the Trust Indenture.

                                       17
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     "Trust Office" has the meaning set forth in the Trust Indenture.

     "Trust Supplement" means a Supplement to the Amended and Restated Trust
Indenture, substantially in the form of Exhibit A to the Trust Indenture.

     "U.S." means the United States of America.

     "U.S. Air Carrier" means a Citizen of the United States holding an air
carrier operating certificate issued by the Secretary of Transportation pursuant
to Chapter 447 of Title 49 of the United States Code, for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo or that
otherwise is certified or registered to the extent required to fall within the
purview of 11 U.S.C. Section 1110 or any analogous successor provision of the
Bankruptcy Code.

     "U.S. Ownership Interest" means all right, title and interest in and to the
Aircraft conveyed to the Original Lessor pursuant to the Japanese Lease
Assignment and Lessor's Purchase Agreement, which interest the Lessee, Lessor
and Owner Participant agree constitutes ownership of the Aircraft for United
States tax purposes.

     "Wet Lease" means any arrangement whereby the Lessee agrees to furnish the
Airframe and Engines or engines installed thereon to a third party pursuant to
which such Airframe and Engines or engines (i) shall be operated solely by
regular employees of Lessee possessing all current certificates and licenses
that would be required under the Federal Aviation Act for the performance by
such employees of similar functions within the United States of America (it is
understood that cabin attendants need not be employees of Lessee) and (ii) shall
be maintained by Lessee in accordance with its normal maintenance practices.

     SECTION 2.  Acceptance and Lease.  It is hereby acknowledged that Original
                 --------------------
Lessor acquired the U.S. Ownership Interest from Lessee pursuant to the Japanese
Lease Assignment and simultaneously leased the Aircraft to Lessee under the
Original Lease, and Lessee leased from Lessor under the Original Lease, the
Aircraft as evidenced by the execution by Lessor and Lessee of a Lease
Supplement leasing the Aircraft. Lessor authorized one or more employees of
Lessee, designated by Lessee in writing, as the authorized representative or
representatives of Lessor to accept delivery of the Aircraft. Such
representatives accepted delivery of the Aircraft for all purposes of the
Original Lease and this Lease. Lessor hereby agrees to lease the Aircraft to
Lessee and Lessee hereby agrees to lease the Aircraft from Lessor, on the terms
and subject to the conditions set forth in this Lease.

     SECTION 3.  Term and Rent.
                 -------------

          (a)  Interim Term and Basic Term. The Interim Term commenced on
               ---------------------------
the Delivery Date and ended on and included the day immediately preceding the
Commencement

                                       18
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Date. The Basic Term commenced on the Commencement Date and shall end on and
include February 15, 2015, or such earlier date as this Lease may be terminated
in accordance with the provisions hereof.

          (b)  Basic Rent.
               ----------

          During the Term, from and including the Delivery Date up to and
including the Effective Date, Lessee paid Basic Rent in accordance with Section
3(b)(i) of the Original Lease. From the Effective Date, Lessee shall pay Basic
Rent for the Aircraft on each Lease Period Date occurring after the Effective
Date during the remaining Term in immediately available dollars, in the amounts
and on the dates set forth in Exhibit B hereto. Each such payment of Basic Rent
shall be allocated in accordance with Exhibit B-1 hereto, and the Lessee and the
Lessor agree that such allocation is intended to constitute an allocation of
fixed rent to the periods indicated on such Exhibit B-1 hereto within the
meaning of Treasury Regulation ss.1.467-1(c)(2)(ii)(A). Basic Rent shall be
payable in advance on certain Lease Period Dates and in arrears on certain Lease
Period Dates, as specified in Exhibit B hereto.

          (c)  Adjustments to Basic Rent, Excess Amount, Stipulated Loss Values
               ----------------------------------------------------------------
and Termination Values.
----------------------

          (i)  In the event that there shall be an optional redemption or
     refinancing of the Certificates in accordance with Section 17 of the
     Participation Agreement, then the Basic Rent and Excess Amount set forth in
     Exhibit B, the Stipulated Loss Value percentages set forth in Exhibit C and
     the Termination Value percentages set forth in Exhibit D shall be adjusted
     (upwards or downwards as the case may be) using the same methods and
     assumptions used to calculate Basic Rent and Excess Amount and Stipulated
     Loss Value and Termination Value percentages as set forth in Exhibits B, C
     and D, respectively, in each case in compliance with clauses (iv) and (v)
     of this paragraph (c) and in order to: (1) maintain Net Economic Return and
     (2) minimize the Net Present Value of Rents to Lessee to the extent
     possible consistent with clause (1) hereof. Prior to the Refinancing Date
     only, in the event a new Funding Period is selected for the Certificates in
     accordance with Section 7.04 of the Trust Indenture, then in each case the
     Basic Rent and Excess Amount (if such event occurs prior to the Refinancing
     Date) set forth in Exhibit B, the Stipulated Loss Value percentages set
     forth in Exhibit C and the Termination Value percentages set forth in
     Exhibit D shall be adjusted (upwards or downwards as the case may be) using
     the same methods and assumptions (as modified on account of the prior
     occurrence of any of the events referred to above) used to calculate Basic
     Rent and Excess Amount and Stipulated Loss Value and Termination Value
     percentages as set forth in Exhibits B, C and D, respectively, in each case
     in compliance with clauses (iv) and (v) of this paragraph (c) and in order
     to: (1) maintain Net Economic Return and

                                       19
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     (2) minimize the Net Present Value of Rents to Lessee to the extent
     possible consistent with clause (1) hereof.

          (ii)  On the Refinancing Date, Lessee and Lessor shall revise
     Exhibits B, B-1, C and D hereto in accordance with the terms of the Note
     Purchase Agreement and shall amend this Lease accordingly.

          (iii) Any recalculation of Basic Rent and Excess Amount and Stipulated
     Loss Value and Termination Value percentages pursuant to this Section 3(c)
     shall be determined by Owner Participant on behalf of Lessor and shall be
     subject to the verification procedures set forth in Exhibit E hereto. Such
     recalculated Basic Rent and Excess Amount and Stipulated Loss Value and
     Termination Value percentages shall be set forth in an amendment or
     supplement hereto; provided, however, that any such recalculation shall be
     effective upon such determination or verification, as the case may be,
     notwithstanding that any such amendment or supplement shall not yet have
     been executed and delivered.

          (iv)  Anything contained in the Participation Agreement or this Lease
     to the contrary notwithstanding, each installment of Basic Rent payable
     hereunder, whether or not adjusted in accordance with this Section 3(c),
     shall, together with the amount of the Excess Amount payable on the
     Commencement Date, and each payment of Termination Value and Stipulated
     Loss Value, whether or not adjusted in accordance with this Section 3(c) or
     Section 8 of the Tax Indemnity Agreement, and all other amounts payable
     simultaneously by Lessee pursuant to this Lease, excluding however,
     Excluded Payments, in each case be in an amount at least sufficient to pay
     in full, on the date on which such payment is due, any payments then
     required to be made on account of the principal amount (and premium, if
     any) of and interest on the Certificates then outstanding. It is agreed
     that no installment of Basic Rent or payment of Excess Amount, Termination
     Value or Stipulated Loss Value shall be increased or adjusted by reason of
     (A) any attachment or diversion of Rent on account of (x) Lessor Liens
     (including for this purpose Liens that would be Lessor Liens but for the
     proviso to the definition of Lessor Liens) or (y) any other Lien on or
     against the Lessor Aircraft Assets, any part thereof or the Operative
     Documents arising as a result of claims against the Indenture Trustee or
     any Certificate Holder not related to the transactions contemplated by the
     Operative Documents, (B) any modification of the payment terms of the
     Certificates made without the prior written consent of Lessee (other than
     such as may be permitted without Lessee's consent pursuant to the express
     terms of any Operative Document and so long as any such modification does
     not increase any amount payable by Lessee hereunder) or (C) the
     acceleration of any Certificate due to the occurrence of an "Event of
     Default" (as such term is defined in the Trust Indenture) which does not
     constitute an Event of Default hereunder.

                                       20
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          (v)  All adjustments to Basic Rent under this Section 3(c) shall be
     consistent with the requirements of: (A) Rev. Proc. 75-21 and Rev. Proc.
     75-28, as modified and in effect on the Delivery Date to the same extent
     and in the same manner that such requirements were satisfied in calculating
     Basic Rent as originally set forth in Exhibit B, and (B) Section 467 of the
     Code, or any successor provision thereof, as in effect on the date of such
     adjustment.

          (d)  Supplemental Rent. Lessee shall pay (or cause to be paid)
               -----------------
promptly to Lessor, or to whomsoever shall be entitled thereto, any and all
Supplemental Rent constituting Stipulated Loss Value or Termination Value as the
same shall become due and owing and all other amounts of Supplemental Rent
within five Business Days after demand or within such other relevant period as
may be provided in any Operative Document, and in the event of any failure on
the part of Lessee to pay any Supplemental Rent when due, Lessor shall have all
rights, powers and remedies provided for herein or in any other Operative
Document or by law or equity or otherwise in the case of nonpayment of Basic
Rent. Lessee shall pay as Supplemental Rent when due any amount of premium
payable under the Trust Indenture and all amounts payable by Owner Trustee
pursuant to Section 2.01 of the Trust Indenture. Lessee also will pay to Lessor,
or to whomsoever shall be entitled thereto, on demand, as Supplemental Rent, to
the extent permitted by applicable law, interest at the Past Due Rate with
respect to 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.

          (e)  Payments in General. All payments of Rent payable to Lessor shall
               -------------------
be made directly by Lessee by wire transfer of immediately available funds prior
to 11:00 a.m., New York time, on the date of payment in Dollars, to Lessor at
its office at 2 Avenue de Lafayette, Boston, MA 02111-1724, Attention: Corporate
Trust Department (or such other office of Lessor in the continental United
States or such other account as Lessor shall direct in a notice to Lessee at
least 10 Business Days prior to the date such payment of Rent is due); provided,
that until Lessee shall have received notice from the Indenture Trustee to the
contrary, Lessor hereby directs and Lessee agrees, that all Basic Rent shall be
paid directly to the Indenture Trustee at the times and in funds specified in
this Section 3(e) at the offices of the Indenture Trustee at 225 Asylum Street,
Goodwin Square, Hartford, CT 06103, Attention: Corporate Trust Department (or
such other office of Indenture Trustee in the continental United States or such
other account as Indenture Trustee shall direct in a notice to Lessee at least
10 Business Days prior to the date such payment of Basic Rent is due).

          Notwithstanding anything to the contrary contained herein, if any date
on which a payment of Rent 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 (provided such payment is made on

                                       21
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

such next succeeding Business Day) no interest shall accrue on the amount of
such payment, from and after such scheduled date.

     SECTION 4.  Lessor's Representations and Warranties.  LESSOR LEASES AND
                 ---------------------------------------
LESSEE TAKES THE AIRCRAFT "AS-IS, WHERE-IS." LESSEE ACKNOWLEDGES AND AGREES THAT
AS BETWEEN LESSOR, STATE STREET BANK AND TRUST COMPANY, IN ITS INDIVIDUAL
CAPACITY, ANY PARTICIPANT, THE INDENTURE TRUSTEE, AND LESSEE (A) THE AIRFRAME
AND EACH ENGINE IS OF SIZE, DESIGN, CAPACITY AND MANUFACTURE SELECTED BY AND
ACCEPTABLE TO LESSEE, (B) LESSEE IS SATISFIED THAT THE AIRFRAME AND EACH ENGINE
IS SUITABLE FOR ITS PURPOSES, (C) NEITHER LESSOR NOR OWNER PARTICIPANT IS A
MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND, AND (D) NEITHER LESSOR, THE
INDENTURE TRUSTEE NOR THE OWNER PARTICIPANT MAKES, HAS MADE OR SHALL BE DEEMED
TO HAVE MADE, AND EACH WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
CONDITION, DESIGN, OPERATION, VALUE, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT 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 WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY
PART THEREOF, except as set forth in Sections 8(f)(vi) and 8(p)(ii) of the
Participation Agreement as to title and except that State Street Bank and Trust
Company, in its individual capacity, (i) represents and warrants that on the
Effective Date, Lessor shall have received whatever title to the Aircraft was
conveyed to it by Owner Participant, (ii) represents and warrants that on the
Effective Date the Aircraft shall be free of Lessor Liens (including for this
purpose Liens that would be Lessor Liens but for the proviso to the definition
of Lessor Liens) attributable to it in its individual capacity, (iii) covenants
that it will not, through its own actions or inactions, in such capacity,
interfere in Lessee's quiet enjoyment, use operation or possession of the
Aircraft unless this Lease shall have been declared in default pursuant to
Section 15 hereof, (iv) agrees that it will not directly or indirectly create,
incur, assume or suffer to exist any Lessor Lien attributable to it in its
individual capacity on or with respect to the Airframe or any Engine or any
portion of the Trust Estate and (v) represents and warrants that it is a Citizen
of the United States and agrees that if at any time it shall cease to be a
Citizen of the United States, it will promptly resign as Owner Trustee (if and
so long as such citizenship is necessary under the Federal Aviation Act as in
effect at such time or, if it is not necessary, if and so long as the Owner
Trustee's citizenship would have any adverse effect on the Owner Participant,
the Certificate Holders or Lessee), effective upon the appointment of a
successor Owner Trustee in accordance with the provisions of the Trust
Agreement. None of the provisions of this Section 4 or any other provision of
this Agreement shall be deemed to amend, modify or otherwise affect the
representations, warranties

                                       22
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

or other obligations (express or implied) of the Manufacturer, any affiliate
thereof, any subcontractor or supplier of the Manufacturer, or any affiliate
thereof, with respect to the Airframe, the Engines, or any Parts, or to release
the Manufacturer, any affiliate thereof, or any such subcontractor or supplier
from any such representation, warranty or obligation. Unless a Default or an
Event of Default shall have occurred and be continuing, Lessor agrees to make
available to Lessee such rights as Lessor may have under any warranty with
respect to the Aircraft made by the Manufacturer, any affiliate thereof, or any
of their respective subcontractors or suppliers and any other claims against the
Manufacturer, any affiliate thereof, or any such subcontractor or supplier with
respect to the Aircraft.

     SECTION 5.  Return of the Aircraft.
                 ----------------------

          (a)  Condition Upon Return. Unless purchased by Lessee pursuant to
               ---------------------
Section 9(b) or Section 19 hereof, upon the termination of this Lease at the end
of the Basic Term or any Renewal Term or pursuant to Section 9(c) or Section 15
hereof, Lessee, at its own expense, will return the Airframe to Lessor at a
major airport on Lessee's route system in one of the forty-eight contiguous
states of the United States chosen by Lessee, and Lessee will give Lessor ten
days prior written notice of the place of such return; provided, however, that
if Lessor shall have made the request for storage pursuant to Section 5(d)
hereof, Lessee shall return the Aircraft to Lessor at the site of the storage
(in which event Lessor shall reimburse Lessee for Lessee's out-of-pocket
expenses in ferrying the Aircraft from the place it is located on the last day
of the Term (provided, however, that if the Aircraft is located outside of the
forty-eight contiguous states of the United States on the last day of the Term,
then such expenses shall be calculated as if the Aircraft was located in San
Francisco, California on the last day of the Term) to such storage site). At the
time of such return, (A) Lessee will, unless otherwise requested by Lessor to
retain the existing registration of the Aircraft, at least 90 days prior to the
return hereunder, cause the Aircraft, if it is not then so registered, to be
registered under the laws of the United States with the FAA in the name of the
Lessor or its designee, provided that Lessee shall be relieved of its
obligations under this sentence if such registration is prohibited by reason of
the failure of Lessor or its designee to be eligible on such date to own an
aircraft registered with the Federal Aviation Administration, and (B) the
Airframe will be fully equipped with the Engines (or other United Technologies
Corporation, Pratt & Whitney Group, Model PW4056 engines or four engines of the
same or another manufacturer of equivalent value and utility and suitable for
installation and use on the Airframe; provided that all four engines shall be of
the same make, model and manufacturer) installed thereon. Also, at the time of
such return, such Airframe and Engines or engines (i) shall be certified (or, if
not then registered under the Federal Aviation Act by reason of the proviso to
clause (A) in the preceding sentence or because Lessor has not so requested the
registration of the Aircraft, shall be eligible for certification) as an
airworthy aircraft by the Federal Aviation Administration, (ii) shall be free
and clear of all Liens (other than Lessor Liens (including for this purpose
Liens that would be Lessor Liens but for the proviso to the definition of Lessor
Liens)) and rights of third parties under pooling, interchange, overhaul, repair
or other similar agreements or arrangements, (iii) shall be in a regular
passenger configuration used by

                                       23
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Lessee, in as good operating condition as when delivered by the Manufacturer to
Lessee, ordinary wear and tear excepted, and otherwise in the condition required
to be maintained under and subject to Lessee's FAA-approved maintenance plan,
irrespective of whether such Airframe or Engines have been under Sublease during
the Term, (iv) in the event that Lessee shall not be using a continuous
maintenance program with respect to the Airframe immediately prior to such
return but instead shall be using a block overhaul program with respect to the
Airframe, then (A) such block overhaul program shall have been approved by all
necessary governmental approvals of the country under the laws of which the
Aircraft shall then have been registered and (B) the Airframe shall have
remaining until the next scheduled block overhaul at least 25% of the allowable
hours between block overhauls permitted under the block overhaul program then
used by Lessee, (v) in the event that Lessee during the period of operation of
the Aircraft immediately prior to such return shall not have been using an on-
condition maintenance program with respect to the Engines or engines, Lessee
agrees that the average number of hours or cycles of operation (whichever shall
be applicable under the maintenance program then in use with respect to such
Engines or engines) on such Engines or engines remaining until the next
scheduled engine heavy maintenance shall be at least 25% of the hours or cycles
(whichever shall be applicable) between engine heavy maintenance allowed under
the maintenance program then in use with respect to such Engines or engines,
(vi) shall have all Lessee's and any Sublessee's exterior markings removed or
painted over with the areas thereof refinished to match adjacent areas, and
(vii) shall be in a state of cleanliness suitable under Lessee's normal service
standards for operation in Lessee's revenue passenger service, and in all such
cases the Aircraft shall not have been discriminated against whether by reason
of its leased status or otherwise in maintenance, use, operation or in any other
manner whatsoever.

          In the event that upon a return of the Aircraft pursuant to this
Section 5, Lessee and Lessor cannot agree as to whether Lessee, during the
period of operation of the Aircraft immediately prior to such return, shall have
been using a continuous maintenance program or a block overhaul program with
respect to the Airframe, then Lessee and Lessor shall mutually appoint an
independent third party, satisfactory to both Lessee and Lessor, who shall make
such a determination, which determination shall be conclusive and final. Lessee
will provide, on a confidential basis, such independent third party with the
maintenance program and records applicable to the Aircraft necessary to make
such determination. The fee of such third party shall be paid equally by Lessor
and Lessee.

          If clause (iv) of the first paragraph of this Section 5(a) shall be
applicable but the Airframe does not meet the conditions specified in said
clause (iv), Lessee shall pay or cause to be paid to Lessor a Dollar amount
computed by multiplying (i) 120% of the direct cost to Lessee (based upon the
direct cost to Lessee for similar aircraft in the fleet of Lessee) during the
preceding 12 months of performing an airframe block overhaul of the type
referred to in such clause (iv) by (ii) a fraction of which (x) the numerator
shall be the excess of 25% of hours of operation allowable between such block
overhauls over the actual number of hours of operation remaining on the Airframe
to the next such block overhaul and (y) the denominator shall be the

                                       24
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

number of hours of operation allowable between such block overhauls in
accordance with such block overhaul program.

          If clause (v) of the first paragraph of this Section 5(a) shall be
applicable but the Engines or engines do not meet the conditions specified in
said clause (v), Lessee shall pay or cause to be paid to Lessor a Dollar amount,
in regard to each Engine or engine, as the case may be, computed by multiplying
(i) 120% of the direct cost to Lessee (based upon the direct cost to Lessee for
similar aircraft in the fleet of Lessee) during the preceding 12 months of
performing for an engine of the same model as the Engines the scheduled engine
heavy maintenance under the maintenance program then used by Lessee for engines
of the same model as the Engines, by (ii) a fraction of which (x) the numerator
shall be the excess of 25% of the hours or cycles of operation of one Engine
(whichever is applicable) between engine heavy maintenance allowable under the
maintenance program then in use with respect to such Engines or engines over the
actual average number of hours or cycles of operation on all four Engines or
engines remaining until the next such scheduled engine heavy maintenance and (y)
the denominator shall be the number of hours or cycles allowable between such
scheduled engine heavy maintenance.

          During the last six months of the Term (unless Lessee shall have
elected to purchase the Aircraft or renew this Lease in accordance with the
terms of this Lease), with reasonable notice, Lessee will cooperate, and cause
any Sublessee to cooperate, at Lessor's sole cost, in all reasonable respects
with the efforts of Lessor to sell or lease the Aircraft, including, without
limitation, permitting prospective purchasers or lessees to inspect the Aircraft
and any records then required to be maintained by the FAA or by the applicable
government agency of the country in which the Aircraft is registered, all in
accordance with Section 12 hereof, provided that any such cooperation shall not
interfere with the normal operation or maintenance of the Aircraft by, or the
business of, Lessee or any Sublessee.

          (b)  Return of the Engines.  In the event that any engine not owned by
               ---------------------
Lessor (or so long as the Japanese Lease is in effect, in which legal title is
not held by Primary Lessor) shall be delivered with the returned Airframe as set
forth in paragraph (a) of this Section 5, Lessee, concurrently with such
delivery, will, at no cost to Lessor, furnish, or cause to be furnished, to
Lessor (or so long as the Japanese Lease is in effect, to Primary Lessor) a full
warranty (as to title) bill of sale with respect to each such engine, in form
and substance reasonably satisfactory to Lessor (together with an opinion of
counsel (which may be Lessee's General Counsel) to the effect that such full
warranty bill of sale has been duly authorized and delivered and is enforceable
in accordance with its terms and that such engines are free and clear of all
Liens other than Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso to the definition of Lessor Liens)), against
receipt from Lessor of a bill of sale evidencing the transfer, without recourse
or warranty (except as to the absence of Lessor Liens (including for this
purpose Liens that would be Lessor Liens but for the proviso to the definition
of Lessor Liens)) by Lessor to Lessee or its designee of all of Lessor's right,
title and interest in and to any Engine not installed on the Airframe at the
time of the return of the Airframe.

                                       25
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          (c)  Fuel; Manuals.  Upon the return of the Airframe upon any
               -------------
termination of this Lease in accordance with paragraph (a) of this Section 5,
(i) Lessor shall pay Lessee, as compensation for any fuel or oil contained in
the fuel or oil tanks of such Airframe, the value of such fuel or oil as
calculated by reference to the then-current market price of fuel or oil, as the
case may be, and (ii) Lessee shall deliver or cause to be delivered to Lessor
all logs, manuals and data and inspection, modification and overhaul records
required to be maintained with respect to the Airframe, the Engines or any Part
under applicable rules and regulations of each country under the laws of which
the Aircraft has been registered during the period of operation thereof.

          (d)  Storage Upon Return. If, at least 30 days prior to termination of
               -------------------
this Lease at the end of the Basic Term or any Renewal Term, or pursuant to
Section 9(c) or Section 15, Lessee receives from Lessor a written request for
storage of the Aircraft upon its return hereunder, Lessee will provide Lessor,
or cause Lessor to be provided, with storage facilities for the Aircraft (at
Lessor's risk and at Lessor's cost for insurance, maintenance, and Lessee's out-
of-pocket expenses other than storage fees) for a period not exceeding forty-
five days, commencing on the date of such termination, at a location in the
forty eight contiguous United States selected by Lessee and reasonably
acceptable to Lessor and used as a location for the storage of aircraft.

     SECTION 6. Liens.  Lessee will not directly or indirectly create, incur,
                -----
assume or suffer to exist any Lien on or with respect to the Aircraft, title
thereto or any interest therein or in this Lease, except (i) the respective
rights of Lessor and Lessee as herein provided (including the rights of any
Sublease permitted pursuant to Section 7(b) and the rights permitted by Section
8(b)), the Lien of the Japanese Lease, the Primary Lessor Mortgage and the Trust
Indenture, and any other rights existing pursuant to the Operative Documents,
(ii) Lessor Liens (including for this purpose Liens that would be Lessor Liens
but for the proviso to the definition of Lessor Liens), (iii) Liens for Taxes of
Lessee (or any Sublessee) either not yet due or being contested in good faith by
appropriate proceeding so long as such proceedings do not involve any material
risk of the sale, forfeiture or loss of the Airframe or any Engine or any
interest therein, (iv) materialmen's, mechanics', workmen's, repairmen's,
employees' or other like liens arising in the ordinary course of Lessee's or any
Sublessee's business securing obligations that are not overdue for a period of
more than 60 days 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 of the Airframe or any Engine or any interest therein,
(v) Liens arising out of any judgment or award against Lessee (or any
Sublessee), so long as there does not exist a material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein as a
result of such judgment or award, or unless the judgment secured shall not,
within 45 days after the entry thereof, have been discharged, vacated, reversed
or execution thereof stayed pending appeal or shall not have been discharged,
vacated or reversed within 45 days after the expiration of such stay, (vi) any
other Lien with respect to which Lessee (or any Sublessee) shall have provided a
bond or other security in an amount and under terms reasonably satisfactory to
Lessor, and (vii)

                                       26
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

any Permitted Lien as the same is defined in the Japanese Lease. Lessee will
promptly, at its own expense, take (or cause to be taken) such actions as may be
necessary duly to discharge any such Lien not excepted above if the same shall
arise at any time.

     SECTION 7. Registration, Maintenance and Operation; Possession and
                -------------------------------------------------------
Sublease; Insignia.
------------------

          (a)  Registration, Maintenance and Operation.
               ---------------------------------------

               (1)  Registration and Maintenance. Lessee, at its own cost and
                    ----------------------------
     expense, shall (or shall cause any Sublessee to): (i) on the Effective
     Date, cause the Aircraft to be duly registered in the name of Lessor, and,
     subject to subparagraph (3) of this Section 7(a), to remain duly registered
     in the name of Lessor under the Federal Aviation Act (except as otherwise
     required by applicable law or to the extent that such registration cannot
     be effected because of Lessor's or Owner Participant's failure to comply
     with the citizenship or other eligibility requirements for registration of
     aircraft under such Act), provided that Lessor and Owner Participant shall
     execute and deliver all such documents as Lessee (or any Sublessee) may
     reasonably request for the purpose of effecting and continuing such
     registration, and Lessee shall cause the Primary Lessor Mortgage and the
     Trust Indenture to be duly recorded and maintained of record as a mortgage
     on the Aircraft in all jurisdictions reasonably requested by the Indenture
     Trustee; (ii) maintain, service, repair, test and overhaul (or cause to be
     maintained, serviced, repaired, tested and overhauled) the Aircraft (and
     any engine which is not an Engine but which is installed on the Aircraft);
     (x) so as to keep the Aircraft in as good operating condition as on the
     Delivery Date, ordinary wear and tear excepted, and in such condition as
     may be necessary to enable the airworthiness certification for the Aircraft
     to be maintained in good standing at all times (other than during temporary
     periods of storage in accordance with applicable regulations) under (I) the
     Federal Aviation Act, except when all Boeing Model 747-422 aircraft
     (powered by engines of the same type as those with which the Airframe shall
     be equipped at the time of such grounding) registered in the United States
     have been grounded by the FAA, or (II) the applicable laws of any other
     jurisdiction in which the Aircraft may then be registered from time to
     time, except when all Boeing Model 747-422 aircraft (powered by engines of
     the same type as those with which the Aircraft shall be equipped at the
     time of such grounding) registered in such jurisdiction have been grounded
     by the aeronautical authorities of such jurisdiction; and (y) in the same
     manner as Lessee (or, if under Sublease, Sublessee) maintains, services,
     repairs, tests or overhauls similar aircraft operated by Lessee (or, if
     under Sublease, Sublessee) in similar circumstances and without in any way
     discriminating against the Aircraft (including, without limitation, in
     regard to terminating any airworthiness directive issued by the FAA in
     regard to the Aircraft), whether by reason of its leased status or
     otherwise, or such other manner as shall have been approved by

                                       27
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     Lessor; (iii) maintain or cause to be maintained all records, logs and
     other materials required to be maintained in respect of the Aircraft by the
     FAA and the applicable regulatory agency or body of any other jurisdiction
     in which the Aircraft may then be registered (which records, logs and other
     materials shall, as between Lessor and Lessee and all parties claiming
     through Lessee, be the property of Lessor but shall be maintained by Lessee
     during the Term of this Lease and shall become the property of Lessee upon
     Lessee's purchase of the Lessor's interest in the Aircraft pursuant to the
     terms of this Lease or upon the occurrence of an Event of Loss and Lessee's
     compliance with Section 10(a)(i)); and (iv) promptly furnish or cause to be
     furnished to Lessor or Owner Participant such information as may be
     required to enable Lessor to file any reports required to be filed by
     Lessor or Owner Participant with any governmental authority because of
     Lessor's or Owner Participant's interest in the Aircraft.

          (2)  Operation.  Lessee will not (and will not permit any Sublessee
               ---------
     to) maintain, use, service, repair, overhaul, test or operate the Aircraft
     in violation of any law or any rule, regulation, order or certificate of
     any government or governmental authority (domestic or foreign) having
     jurisdiction, or in violation of any airworthiness certificate, license or
     registration relating to the Aircraft issued by any such authority, except
     that, after providing Lessor with written notice stating all relevant facts
     with respect thereto, Lessee or any Sublessee may contest in good faith the
     validity or application of any such law, rule, regulation, order,
     certificate, license, registration or violation in any reasonable manner
     which does not materially adversely affect the Lessor, Owner Participant,
     any Certificate Holder (on or prior to the Refinancing Date only), or any
     of their respective legal and economic interests in or to the Aircraft or
     any Operative Documents, but only so long as such contest does not involve
     any risk of criminal liability or any material risk of civil liability to
     Lessor or Owner Participant for which Lessor or Owner Participant is not
     indemnified. If the indemnities or insurance from the United States
     Government specified in Section 11(f), or some combination thereof in
     amounts equal to amounts required by Section 11(f) hereof, have not been
     obtained, Lessee will not operate the Aircraft, or suffer or permit any
     Sublessee or any other Person to operate the Aircraft in or to any area
     excluded from coverage by any insurance required to be maintained by the
     terms of Section 11 or in any war zone or recognized or, in the reasonable
     judgment of Lessee, threatened, area of hostilities, unless covered by
     appropriate war risk insurance; provided, however, that the failure of
     Lessee to comply with the provisions of this sentence shall not give rise
     to an Event of Default hereunder where such failure is attributable to (i)
     causes beyond the reasonable control of Lessee or any Sublessee and (ii)
     extraordinary circumstances involving an isolated occurrence or series of
     events not in the ordinary course of the regular operations of Lessee or
     any Sublessee.

          (3)  Reregistration. So long as no Default or Event of Default shall
               --------------
     have occurred and be continuing, at any time after the Restricted Period
     and upon 30 days' prior written notice, Lessor shall, at the request and
     sole expense of Lessee,

                                       28
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     cooperate with Lessee and take all actions requested by Lessee to change
     the country of registration of the Aircraft (i) upon compliance with
     Section 8(e) of the Participation Agreement, to any country listed in
     Exhibit G hereto, as in effect from time to time, and with which country
     the United States maintains diplomatic relations at the time of such
     registration (no action need be taken by Lessee if such diplomatic
     relations are severed subsequent to such registration) or (ii) upon
     compliance with all of the terms of Section 8(e) of the Participation
     Agreement, to any other country with which the United States maintains
     diplomatic relations at the time of such registration (no action need be
     taken by Lessee if such diplomatic relations are severed subsequent to such
     registration).

               (4)  Operating Certificates. So long as no Event of Default has
                    ----------------------
     occurred and is continuing, Lessor hereby authorizes Lessee to act as its
     agent for the purpose of obtaining any required replacement operating
     certificates from the FAA. This authority includes, but is not limited to,
     obtaining Registration Certificates, Airworthiness Certificates,
     Certificates of Sanitary Construction, Ferry Permits and Experimental
     Operating Permits. In particular, this authority includes the ability to
     make use of Exemption No. 5318 issued by the FAA. This authority will allow
     duly authorized personnel of Lessee to sign any application forms required
     in the process of obtaining such operating certificates, and this authority
     will also allow such personnel, where necessary and appropriate, to sign
     certificates as the attorney-in-fact for Lessor. Lessee hereby agrees that
     it will notify Lessor of any action that it has taken in accordance with
     this Section 7(a)(4) as agent for the Lessor.

          (b)  Possession and Subleases.  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 or permit any
Engine to be installed on any airframe other than the Airframe; provided that,
so long as no Default or Event of Default shall have occurred and be continuing
at the time of such sublease, delivery, transfer or relinquishment of possession
or installation, Lessee may, without the prior written consent of Lessor:

          (i)  subject the Airframe and the Engines or engines then installed
     thereon to normal interchange agreements or any Engine to normal pooling or
     similar arrangements, in each case customary in the airline industry and
     entered into by Lessee (or any Sublessee) in the ordinary course of its
     business and, in the case of the Airframe, with a U.S. Air Carrier or a
     Permitted Sublessee or any other air carrier reasonably approved by Lessor;
     provided, that (A) no such agreement or arrangement contemplates or
     requires the transfer of title to the Airframe or any Engine, and (B) if,
     in spite of Lessee's reasonable efforts to prevent the same, Lessor's
     interest in any 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 (or shall cause Sublessee to)
     comply with Section 10(b) hereof in respect thereof;

                                       29
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          (ii)  deliver possession of the Airframe or any Engine to the
     manufacturer thereof or to any other Person for testing, service, repair,
     maintenance or overhaul work on the Airframe or Engine or any Part of any
     thereof or for alterations or modifications in or additions to such
     Airframe or Engine to the extent required or permitted by the terms of
     Sections 7(a) and 8(c) hereof;

          (iii) install an Engine on an airframe owned by Lessee (or any
     Sublessee) which airframe is 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), (B) the rights of third
     parties under interchange agreements which would be permitted under clause
     (i) above, provided that Lessor's interest in such Engine shall not be
     divested as a result thereof and (C) mortgage Liens or other security
     interests, provided that (as regards this clause (C)), such mortgage Liens
     or other security interests effectively provide that such Engine shall not
     become subject to the lien of such mortgage or security interest,
     notwithstanding the installation thereof on such airframe;

          (iv)  install an Engine on an airframe leased to Lessee (or any
     Sublessee) or purchased by Lessee (or any Sublessee) subject to a
     conditional sale or other security agreement, provided that (x) such
     airframe is free and clear of all Liens, except: (A) the rights of the
     parties to the lease or conditional sale or other security agreement
     covering such airframe, or their assignees, and (B) Liens of the type
     permitted by subparagraph (iii) of this paragraph (b) and (y) such lease,
     conditional sale or other security agreement effectively provides that such
     Engine shall not become subject to the lien of such lease, conditional sale
     or other security agreement, notwithstanding the installation thereof on
     such airframe;

          (v)   install an Engine on an airframe owned by Lessee (or any
     Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or
     any Sublessee) subject to a conditional sale or other security agreement
     under circumstances where neither subparagraph (iii) nor subparagraph (iv)
     of this paragraph (b) is applicable, provided that such installation shall
     be deemed an Event of Loss with respect to such Engine and Lessee shall (or
     shall cause any Sublessee to) comply with Section 10(b) hereof in respect
     thereof, 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);

          (vi)  transfer (or permit any Sublessee to transfer) possession of the
     Airframe or any Engine to the United States of America or any
     instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet
     Program for a period, including all permissible renewal periods (so long as
     such renewal options have been irrevocably exercised by Lessee), that does
     not extend beyond the end of the Term so long as Lessee (or any

                                       30
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     Sublessee) shall promptly notify Lessor (x) upon transferring possession of
     the Airframe or any Engine to the United States of America or any agency or
     instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and
     (y) of the name and address of the Contracting Office Representative for
     the Military Airlift Command of the United States Air Force to whom notice
     must be given pursuant to Section 15 hereof;

          (vii)  transfer possession of the Airframe or any Engine to the United
     States of America or any instrumentality or agency thereof pursuant to a
     contract, a copy of which shall be provided to Lessor provided that the
     term of such contract, including all permissible renewal periods (so long
     as such renewal options have been irrevocably exercised by Lessee), shall
     not continue beyond the end of the Term; or

          (viii) so long as the Sublessee is not subject to a proceeding or
     final order under applicable bankruptcy, insolvency or reorganization laws
     on the date the sublease is entered into, Lessee may, at any time (subject
     to the notice requirements specified in the second to last paragraph of
     this Section 7(b)), in its sole discretion, enter into a sublease with (1)
     a U.S. Air Carrier, (2) after the Restricted Period, any Permitted
     Sublessee, (3) after the Restricted Period, any other Person approved in
     writing by the Owner Participant, which approval shall not be unreasonably
     withheld if prior to Lessee's entering into such sublease, Lessor, Owner
     Participant and the Indenture Trustee receive an opinion of counsel
     reasonably acceptable to Lessor and Owner Participant that the terms of the
     sublease and other Operative Documents will be valid in the country where
     the Permitted Sublessee is domiciled; that no Participant is required to
     register to do business in the Sublessee's country of domicile; that there
     is no tort liability for owners not in possession that is more extensive
     than under United States law or any state law; that fair compensation in a
     currency freely convertible into United States dollars is mandated if there
     is requisition of use or title of the Aircraft by the country in which the
     Sublessee is domiciled (it being understood that if such opinion cannot be
     given in a form satisfactory to the Owner Participant) such opinion will be
     waived if insurance reasonably satisfactory to the Owner Participant is
     provided at Lessee's expense to cover such risk); that there exist no
     possessory rights in favor of the Sublessee which upon Lessee's bankruptcy
     or other Default hereunder (assuming the Sublessee is not bankrupt) would
     prevent the return of the Aircraft in accordance with the terms hereof or
     inhibit the Lessor's rights therein; or (4) any other Person approved in
     writing by the Owner Participant, which approval shall not be unreasonably
     withheld if conditions similar to those set forth in clause (viii)(3) above
     have been satisfied; provided, however, that no sublease, including all
     permissible renewal periods, entered into pursuant to this clause (viii)
     shall extend beyond the Basic Term or any Renewal Term then in effect,
     unless Lessee shall have irrevocably committed to purchase the Aircraft or
     renew this Lease in accordance with the terms hereof at the end of the
     Basic Term or Renewal Term, as the case may be, to a date beyond the latest
     permissible expiration date of such sublease.

                                       31
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     The rights of any Sublessee or other transferee who receives possession by
reason of a transfer permitted by this paragraph (b) (other than the transfer of
an Engine which is deemed an Event of Loss) shall be subject and subordinate to,
and the terms of any Sublease permitted by this Section 7(b) shall be subject
and subordinate to, all the terms of this Lease, including, without limitation,
the covenants contained in Section 7(a) hereof and Lessor's (and, so long as the
Trust Indenture is in effect, the Indenture Trustee's (as Lessor's assignee))
rights to repossession pursuant to Section 15 hereof and to void such Sublease
upon such repossession, and Lessee shall remain primarily liable hereunder for
the performance of all of the terms of this Lease to the same extent as if such
Sublease or transfer had not occurred, and the terms of any such Sublease shall
not permit any Sublessee to take any action not permitted to be taken by Lessee
in this Lease with respect to the Aircraft. No 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 or
constitute a waiver of Lessor's rights or remedies hereunder. Lessor agrees, for
the benefit of Lessee (and any Sublessee) and for the benefit of any mortgagee
or other holder of a security interest in any engine (other than an Engine)
owned by Lessee (or any Sublessee), any lessor of any engine (other than an
Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any
engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to
a conditional sale agreement or any other security agreement, that no interest
shall be created hereunder in any engine so owned, leased or purchased and that
neither Lessor nor its successors or assigns will acquire or claim as against
Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or
other holder of a security interest or any successor or assignee of any thereof,
any right, title or interest in such engine as the result of such engine being
installed on the Airframe. Lessee shall give the Lessor and the Indenture
Trustee written notice (which notice, to the extent feasible, shall be given
prior to entering into such Sublease) of any Sublease entered into pursuant to
the terms hereof which has a term of more than three months. Lessee shall, upon
request, provide Lessor with a copy of any Sublease hereunder which has a term
of more than three months.

     Lessor acknowledges that any Wet Lease or 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). Lessor acknowledges that any consolidation or merger of Lessee or
conveyance, transfer or lease of all or substantially all of Lessee's assets
permitted by the Operative Documents shall not be prohibited by this Section
7(b).

     No sublease permitted pursuant to this Section 7(b) shall permit any
further sub-subleasing of the Aircraft.

          (c)  Insignia.  On or prior to the Effective Date, or as soon
               --------
thereafter as practicable, Lessee agrees to affix and maintain (or cause to be
affixed and maintained) in the cockpit of the Airframe adjacent to the
registration certificate therein and on each Engine a nameplate bearing the
inscription:

                                       32
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                  Leased From

      State Street Bank and Trust Company, not in its individual capacity
                    but solely as Owner Trustee, as Lessor

and, for so long as the Airframe and each Engine shall be subject to the Lien of
the Trust Indenture, bearing the following additional inscription:

                                 Mortgaged To

              State Street Bank and Trust Company of Connecticut,
                  National Association, as Indenture Trustee

(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Lessor or successor Indenture Trustee, in each case as
permitted under the Operative Documents).

          In addition, Lessee agrees that the nameplate required to be affixed
to the Aircraft pursuant to Section 7(d) of the Japanese Lease will include the
inscription "A security interest in SBF West Air Co., Ltd.'s title has been
granted and assigned to United Air Lines, Inc. pursuant to the Aircraft Mortgage
and Security Agreement dated as of July 28, 1989, and such security interest has
further been assigned to BancBoston United Leasing LLC, pursuant to the
Assignment of Japanese Lease Agreement dated as of August 1, 1989 and the
Supplement to Assignment of Japanese Lease Agreement dated August 16, 1989
between United Air Lines, Inc. and BancBoston United Leasing LLC, which security
interest has further been assigned to State Street Bank and Trust Company of
Connecticut, National Association, pursuant to the First Amended and Restated
Trust Indenture and Security Agreement dated as of July 20, 2000, and all such
instruments have been recorded with the Federal Aviation Administration in
Oklahoma City, Oklahoma, U.S.A."

          Except as above provided and as provided in the Japanese Lease, Lessee
will not allow the name of any person, association or corporation 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. Lessee shall maintain the airworthiness certificate on
the Aircraft. Upon termination of the Japanese Lease, Lessee agrees to promptly
remove any nameplate affixed to the Airframe or any Engine which refers to the
Primary Lessor.

                                       33
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     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 or cause to be replaced all Parts which may from time to time
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use for any reason whatsoever, except
as otherwise provided in Section 8(c). All replacement Parts shall be free and
clear of all Liens (except Permitted Liens, pooling arrangements permitted by
Section 8(b) hereof and replacement Parts temporarily installed on an emergency
basis) and shall be in as good an 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 by the terms hereof.
All Parts (other than Obsolete Parts) at any time removed from the Airframe or
any Engine shall remain the property of Lessor (provided, that so long as the
Japanese Lease is in effect, legal title to such Parts shall remain with the
Primary Lessor, subject to the rights of Lessee under the Japanese Lease and
Lessor under the Japanese Lease Assignment), no matter where located, until such
time as such Parts shall be replaced by Parts 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,
without further act (subject only to Permitted Liens and any pooling arrangement
permitted by Section 8(b) hereof and except replacement Parts temporarily
installed on an emergency basis), (i) title shall vest in and such replacement
Part shall become the property of Lessor (or, so long as the Japanese Lease is
in effect, legal title shall vest in the Primary Lessor, subject to the rights
of Lessee under the Japanese Lease and Lessor under the Japanese Lease
Assignment) and shall become subject to this Lease and be deemed a Part for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in or attached to the Airframe or such Engine and (ii) the replaced
Part shall no longer be the property of Lessor (and the Primary Lessor shall
cease to hold legal title thereto) and shall no longer be deemed a Part
hereunder.

          (b)  Pooling of Parts. Any Part may be subjected by Lessee (or any
               ----------------
Sublessee) to a pooling arrangement of the type which is permitted by Section
7(b)(i) hereof; provided, that the Part replacing such removed Part shall be
incorporated or installed in or attached to such Airframe or Engine in
accordance with Section 8(a) as promptly as practicable after the removal of
such removed Part. In addition, any replacement Part may be owned by any third
party subject to such a pooling arrangement, provided, that Lessee (or any
Sublessee), at its expense, as promptly thereafter as practicable, either (i)
causes such replacement Part to become the property of Lessor (or, so long as
the Japanese Lease is in effect, causes the Primary Lessor to hold legal title
thereto, subject to the rights of Lessee under the Japanese Lease and Lessor
under the Japanese Lease Assignment) free and clear of all Liens other than
Permitted Liens or (ii) replaces such replacement Part with a further
replacement Part owned by Lessee (or any Sublessee) which shall become the
property of Lessor (or, so long as the Japanese Lease is in effect, legal title
shall

                                       34
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

vest in Primary Lessor, subject to the rights of Lessee under the Japanese Lease
and Lessor under the Japanese Lease Assignment), free and clear of all Liens
other than Permitted Liens.

          (c)  Alterations, Modifications and Additions. Lessee, at its own
               ----------------------------------------
expense, will make (or cause to be made) such alterations and modifications in
and additions to the Airframe and Engines as may be required from time to time
to meet the applicable standards of the FAA or any applicable regulatory agency
or body of any other jurisdiction in which the Aircraft may then be registered;
provided, however, that, after providing Lessor with written notice stating all
relevant facts with respect thereto, Lessee or any Sublessee may, in good faith,
contest the validity or application of any such law, rule, regulation or order
in any reasonable manner which does not affect any of the Lessor, any
Certificate Holder (on or prior to the Refinancing Date only) or Owner
Participant or any of their respective legal and economic interests in or to
such Airframe or Engines or any Operative Document but only so long as any such
contest does not involve any risk of criminal liability or any material risk of
civil liability to Lessor or Owner Participant for which Lessor or Owner
Participant is not indemnified. In addition, Lessee (or any Sublessee), at its
own expense, may from time to time make such alterations and modifications in
and additions to the Airframe or any Engine as Lessee (or any Sublessee) may
deem desirable in the proper conduct of its business, including removal of Parts
which Lessee (or any Sublessee) deems 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, removal or addition
impairs the condition or airworthiness of the Airframe or such Engine, or
diminishes the value or utility of the Airframe or such Engine below the value
or utility thereof immediately prior to such alteration, modification, removal
or addition assuming the Airframe or such Engine was then in the condition
required to be maintained by the terms of this Lease, except that the value (but
not the utility) of the Airframe or any Engine may be reduced by the value of
Obsolete Parts which shall have been removed so long as the aggregate value of
all Obsolete Parts which shall have been removed and not replaced shall not
exceed $600,000. All Parts incorporated or installed in or attached or added to
the Airframe or an Engine as the result of such alteration, modification or
addition (except those parts which Lessee has leased from others and which may
be removed by Lessee pursuant to the next sentence) (the "Additional Parts")
shall, without further act, become the property of, and title to such parts
shall vest in, Lessor (or, so long as the Japanese Lease is in effect, legal
title shall vest in Primary Lessor, subject to the rights of Lessee under the
Japanese Lease and Lessor under the Japanese Lease Assignment). Notwithstanding
the foregoing sentence, Lessee (or any Sublessee) may, at any time during the
Term, so long as no Default or Event of Default shall have occurred and be
continuing, remove or suffer to be removed any Additional Part, provided that
such Additional Part (i) is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in or attached
to such Airframe or any Engine at the time of delivery thereof hereunder or any
Part in replacement of or substitution for any such Part, (ii) is not required
to be incorporated or installed in or attached or added to the Airframe or any
Engine pursuant to the terms of Section 7 hereof or the first sentence of this
paragraph (c) and (iii) can be removed from the Airframe or such Engine without
causing material damage thereto (unless such damage is repaired) and without
impairing

                                       35
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

airworthiness or diminishing the value or utility of the Airframe or such Engine
which the Airframe or such Engine would have had at such time had such
alteration, modification or addition not occurred. Upon the removal thereof as
provided above, such Additional Part shall no longer be deemed the property of
Lessor (and, so long as the Japanese Lease is in effect, the Primary Lessor
shall cease to hold legal title thereto) or part of the Airframe or Engine from
which it was removed. Any Additional Part not removed as above provided prior to
the return of the Airframe or Engine to Lessor hereunder shall remain the
property of Lessor (and, so long as the Japanese Lease is in effect, the Primary
Lessor shall hold legal title thereto).

     SECTION 9. Voluntary Termination.
                ---------------------

          (a)   Termination Event.
                -----------------

                (1)  So long as no Default or Event of Default shall have
     occurred and be continuing, Lessee shall have the right at its option to
     elect to terminate this Lease on the 8th, 12th, 16th and 20th anniversaries
     of the Delivery Date.

                (2)  So long as no Default or Event of Default shall have
     occurred and be continuing, Lessee shall have the right to terminate this
     Lease on any Lease Period Date occurring on or after the seventh
     anniversary of the end of the calendar year in which occurs the Delivery
     Date if Lessee shall have made a good faith determination, which shall be
     evidenced by a certificate of any financial officer of Lessee, who is a
     Vice President or more senior officer, that the Aircraft is surplus to
     Lessee's requirements or economically obsolete to Lessee. Lessee shall
     exercise this option by selling the Aircraft pursuant to Section 9(c),
     unless Lessor has elected to retain title to the Aircraft as provided
     therein.

                (3)  Lessee shall give to Lessor and the Indenture Trustee at
     least one hundred twenty (120) days' revocable advance written notice of
     Lessee's intention to so terminate this Lease (any such notice, a
     "Termination Notice") specifying the Lease Period Date on which Lessee
     intends to terminate this Lease in accordance with this Section 9 (such
     specified date, a "Termination Date"). The Termination Notice shall be
     irrevocable thirty days prior to the Termination Date. In addition, if
     Section 9(a)(1) is applicable, Lessee agrees that it shall deliver to the
     Indenture Trustee and Lessor at least thirty days irrevocable notice of its
     election to purchase the Aircraft pursuant to Section 9(b) or to sell the
     Aircraft pursuant to Section 9(c).

          (b)  Option to Purchase. If Lessee exercises its right to terminate
               ------------------
this Lease under Section 9(a)(1) and gives its irrevocable notice pursuant to
Section 9(a)(3) to purchase the Aircraft pursuant to this Section 9(b), then on
the Termination Date specified pursuant to Section 9(a)(3), Lessee may purchase
the Aircraft at the greater of (i) the Termination Value on the Termination
Date, or (ii) its Fair Market Sales Value on the Termination Date. In such
event,

                                       36
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Lessor shall, without recourse or warranty (except as to the absence of Lessor
Liens (including for this purpose Liens that would be Lessor Liens but for the
proviso to the definition of Lessor Liens)), sell the Aircraft to Lessee in
exchange for, at Lessee's option, either (1) the payment in immediately
available funds of an amount equal to the sum of (A) all unpaid Basic Rent with
respect to the Aircraft due on or prior to such Termination Date (other than
Basic Rent payable in advance, if any) and all unpaid Supplemental Rent with
respect to the Aircraft due on or prior to such Termination Date plus (B) all
reasonable expense incurred by Lessor in connection with such sale plus (C) the
greater of (x) the Termination Value for the Aircraft, computed as of the
Termination Date or (y) the Fair Market Sales Value of the Aircraft on the
Termination Date, plus (D) the premium, if any, due on the Certificates; or (2)
(A) the assumption by Lessee, pursuant to Section 7.03 of the Trust Indenture,
of all of the obligations of Lessor under the Trust Indenture and the
Certificates and (B) the payment in immediately available funds in an amount
equal to the sum of (x) all unpaid Basic Rent with respect to the Aircraft due
on or prior to such Termination Date (other than Basic Rent payable in advance)
and all unpaid Supplemental Rent with respect to the Aircraft due on or prior to
such Termination Date plus (y) all reasonable expenses incurred by Lessor in
connection with such sale plus (z) the excess of the greater of (I) the
Termination Value for the Aircraft, computed as of the Termination Date and (II)
the Fair Market Sales Value of the Aircraft on the Termination Date, over the
unpaid Original Amount of the Certificates outstanding as of such date. Upon
payment in full of the amounts required to be paid and the performance of all
acts required to be performed by Lessee pursuant to the preceding sentence, (i)
the obligation of Lessee to pay Basic Rent hereunder with respect to the
Aircraft for any period commencing on or after the Termination Date shall
terminate with respect to the Aircraft, (ii) this Lease shall terminate on the
Termination Date and (iii) Lessor shall assign all of its rights and obligations
under the Japanese Lease and with respect to the Aircraft to Lessee.

          (c)  Optional Sale of the Aircraft. In the event that Lessee shall
               -----------------------------
have terminated this Lease under Section 9(a)(1) but shall not have elected to
purchase the Aircraft pursuant to Section 9(b), or Lessee shall have terminated
this Lease under Section 9(a)(2), then during the period commencing with the
date of the Termination Notice until the proposed Termination Date, Lessee, as
agent for Lessor and at no expense to Lessor, shall use its reasonable best
efforts to obtain bids in Dollars for the purchase of the Aircraft and, in the
event it receives any bid, Lessee shall, within five Business Days after receipt
thereof and at least ten Business Days prior to the proposed Termination Date,
certify to Lessor in writing the amount and terms of such bid, and the name and
address of the party or parties (who shall not be Lessee or any Affiliate of
Lessee or any person with whom Lessee or any such Affiliate has an arrangement
or understanding regarding the future use of the Aircraft by Lessee or any such
Affiliate but who may be the Owner Participant, any Affiliate thereof or any
person contacted by Owner Participant) submitting such bid. After Lessee shall
have certified to Lessor all bids received, Owner Participant, any Affiliate
thereof or any Person contacted by Owner Participant may submit a further bid or
bids to Lessee not later than two Business Days prior to the Termination Date
proposed by Lessee (unless Lessee shall have revoked the Termination Notice
specifying such proposed Termination Date). Subject to the next succeeding
sentence, on or

                                       37
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

before the Termination Date, subject to the release of all mortgage and security
interests with respect to the Aircraft under the Trust Indenture: (1) Lessee
shall deliver the Aircraft, or cause the Aircraft to be delivered, to Lessor or,
at Lessor's direction, to the bidder(s), if any, which shall have submitted the
highest bid (evaluated on a net cash basis) therefor, in the same manner and in
the same condition and otherwise in accordance with all the terms of this Lease
as if delivery were made to Lessor pursuant to Section 5, and shall duly
transfer to Lessor title to any engine installed on the Airframe and not owned
by Lessor, all in accordance with the terms of Section 5, (2) Lessor shall
acquire legal title to the Aircraft pursuant to the terms of the Japanese Lease
(if the Japanese Lease is then in effect), (3) Lessor shall comply with the
terms of the Trust Indenture and shall, without recourse or warranty (except as
to the absence of Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso to the definition of Lessor Liens)), subject to
prior or concurrent payment by Lessee of all amounts due under clause (4) of
this sentence, sell the Aircraft for cash in Dollars to such bidder(s), the
total selling price realized at such sale to be retained by Lessor, and (4)
Lessee shall simultaneously pay or cause to be paid to Lessor in the manner
provided in Section 3(e), (A) if the proceeds of the sale of the Aircraft so
sold, net of reasonable costs and expenses incurred by Lessor and the Owner
Participant in connection therewith, are less than the Termination Value for the
Aircraft computed as of the Termination Date, the difference between such
Termination Value and such net proceeds, in Dollars; (B) all unpaid Basic Rent
due on or prior to the Termination Date (other than Basic Rent payable in
advance on such Termination Date, if any) with respect to the Aircraft and all
unpaid Supplemental Rent with respect to the Aircraft due on or prior to such
Termination Date, and (C) the premium, if any, due on the Loan Certificates, and
upon such payment Lessor simultaneously will transfer to Lessee, without
recourse or warranty (except as to the absence of Lessor Liens (including for
this purpose Liens that would be Lessor Liens but for the proviso to the
definition of Lessor Liens)), all of Lessor's right, title and interest in and
to any Engines constituting part of the Aircraft which were not sold with the
Aircraft. Notwithstanding the preceding sentence, Lessor may, if Lessee has not
revoked the Termination Notice in accordance with Section 9(a)(3) hereof, elect
to retain title to the Aircraft. If Lessor so elects, Lessor shall give to
Lessee written notice of such election at least five Business Days prior to the
Termination Date accompanied by an irrevocable undertaking by the Owner
Participant to make available to Lessor for payment to the Indenture Trustee on
the Termination Date the amount required to pay in full the unpaid Original
Amount of the Certificates outstanding on the Termination Date plus interest
accrued thereon through the Termination Date together with all other amounts due
thereunder as a result of the payment thereof, other than premium, if any, due
on the Certificates, which shall remain the responsibility of Lessee. Upon
receipt of notice of such an election by Lessor and the accompanying undertaking
by Owner Participant, Lessee shall cease its efforts to obtain bids as provided
above and shall reject all bids theretofore or thereafter received. On the
Termination Date, Lessor shall (i) acquire legal title to the Aircraft pursuant
to the terms of the Japanese Lease (if the Japanese Lease is then in effect) and
(ii) pay in full the unpaid Original Amount of the Certificates outstanding on
the Termination Date plus interest accrued thereon through the Termination Date
together with all other amounts due thereunder as a result of the payment
thereof, including, to the extent funds have been provided by Lessee for

                                       38
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

such purpose premium, if any, due on the Certificates and, provided that the
Certificates are paid as aforesaid, Lessee shall deliver the Airframe and
Engines or engines to Lessor in accordance with Section 5 and shall pay all
Basic Rent due on or prior to the Termination Date (other than Basic Rent
payable in advance on such Termination Date, if any,) and all unpaid
Supplemental Rent due on or prior to such Termination Date. If no sale shall
have occurred on the Termination Date or Lessor has not, after making its
election referred to above, made the aggregate payment contemplated by the
preceding sentence and thereby caused this Lease to terminate, this Lease shall
continue in full force and effect as to the Aircraft, Lessee shall pay the
reasonable costs and expenses incurred by Indenture Trustee, Owner Participant
and Lessor (unless such failure to terminate the Lease is a consequence of the
failure of Lessor or the Owner Participant without due cause to make, or cause
to be made, the aggregate payment referred to in the immediately preceding
sentence), if any, in connection with preparation for such sale and Lessee may
give one or more additional Termination Notices, provided that no more than four
such notices may be given during the Term (not counting, in either case, any
Termination Notice for a Termination Date on which this Lease does not terminate
as a consequence of the failure of Lessor or the Owner Participant without due
cause to make or cause to be made the payment referred to in the immediately
preceding sentence). In the event of any such sale or such retention of the
Aircraft by Lessor and upon compliance by Lessee with the provisions of this
paragraph, the obligation of Lessee to pay Basic Rent or any other amounts
hereunder shall cease to accrue and this Lease shall terminate. Lessor may, but
shall be under no duty to, solicit bids, inquire into the efforts of Lessee to
obtain bids or otherwise take any action in connection with any such sale other
than to transfer (consistent with the foregoing provisions) to the purchaser
named in the highest bid certified by Lessee to Lessor all of Lessor's right,
title and interest in the Aircraft, against receipt of the payments provided
herein.

          (d)    Termination as to Engines. So long as no Default or Event of
                 -------------------------
Default shall have occurred and be continuing, Lessee shall have the right at
its option at any time during the Term, on at least 30 days' prior written
notice, to terminate this Lease with respect to any Engine. In such event, and
prior to the date of such termination, (i) 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, (ii) Lessor shall, at
Lessee's sole expense, take all actions required to terminate the Japanese Lease
with respect to such Engine and to replace such Engine pursuant to the terms of
the Japanese Lease, and (iii) Lessor shall transfer title to the replaced Engine
as provided in Section 5(b).

     SECTION 10. Loss, Destruction, Requisition, etc.
                 -----------------------------------

          (a)    Event of Loss with Respect to the Aircraft. Upon the occurrence
                 ------------------------------------------
of an Event of Loss with respect to the Airframe or the Airframe and the Engines
and/or engines then installed thereon, Lessee shall (1) forthwith (and in any
event, within fifteen days after such occurrence) give Lessor written notice of
such Event of Loss and (2) within 45 days after such occurrence, give Lessor
written notice of its election to perform one of the following options (it

                                       39
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

being understood that the failure to give such notice shall be deemed to be an
election of the option set forth in subsection (i) below). Not later than the
earlier to occur of (x) the Business Day next succeeding the 120th day following
the occurrence of such Event of Loss and (y) the third Business Day after
receipt of insurance proceeds, Lessee shall:

                 (i)   pay or cause to be paid to Lessor as specified in Section
          3(e) hereof, (A) the Stipulated Loss Value of the Aircraft computed as
          of the Stipulated Loss Value Date occurring on or immediately
          following the date of such Event of Loss, plus (B) interest on such
          Stipulated Loss Value at the Applicable Rate from and including such
          Stipulated Loss Value Date to, but not including, the date of any
          advance payment in respect of Stipulated Loss Value as provided below,
          and thereafter on the unpaid balance of such Stipulated Loss Value
          from the date of such advance payment to, but excluding, the date such
          Stipulated Loss Value is paid in full, plus (C) the premium, if any,
          due on the Certificates; provided, however, that if the Commencement
          Date or a Lease Period Date shall occur after the Stipulated Loss
          Value Date with respect to which Stipulated Loss Value is determined
          but prior to the date of such payment of the sum of the amounts
          specified in clauses (A), (B) and (C) above, Lessee shall pay on the
          Commencement Date or such Lease Period Date an amount equal to the
          Basic Rent that would have been due on the Commencement Date or such
          Lease Period Date if such Event of Loss had not occurred, which amount
          shall be credited as an advance against the amounts payable pursuant
          to clauses (A), (B) and (c) above, or

                 (ii)  provided that no Default or Event of Default shall have
          occurred and be continuing, substitute an aircraft or an airframe or
          an airframe and one or more engines, as the case may be, in accordance
          with the terms of this Section 10 and of the Trust Indenture, provided
          that if Lessee shall have elected to make a substitution under this
          clause (ii) and shall fail for any reason to make such substitution in
          accordance with the terms hereof and of the Trust Indenture, Lessee
          shall make the payments required by clause (i) above as and when due
          thereunder.

                 At such time as Lessor shall have received the sum of the
amounts specified in clauses (A), (B) and (C) of subparagraph (i) above,
together with all other amounts that then may be due hereunder (including,
without limitation, all Supplemental Rent due on or before the date of such
payment), under the Participation Agreement and under the Tax Indemnity
Agreement, (1) the obligation of Lessee to pay the installments of Basic Rent,
Supplemental Rent (other than such Supplemental Rent that becomes due after the
date of such payment but which is attributable to an act or omission occurring
prior to such date), Stipulated Loss Value, Termination Value or any other
amount shall cease to accrue, (2) this Lease shall terminate, (3) Lessor will
comply with the terms of the Trust Indenture and transfer to or at the direction
of Lessee, without recourse or warranty (except as to the absence of Lessor
Liens (including for this purpose Liens that would be Lessor Liens but for the
proviso to the definition of Lessor Liens)), all Lessor's right, title and
interest in and to the Japanese Lease, and the Airframe and any

                                       40
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Engines subject to such Event of Loss, as well as any Engines not subject to
such Event of Loss, and furnish to or at the direction of Lessee a bill of sale
in form and substance reasonably satisfactory to Lessee (or any Sublessee),
evidencing such transfer, and (4) Lessee will be subrogated to all claims of
Lessor, if any, against third parties (other than Lessor's or the Owner
Participant's insurers under policies independently maintained at its own cost
and expense in accordance with Section 11(e) hereof), for damage to or loss of
the Airframe and any Engines which were subject to such Event of Loss.

          In the event Lessee shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Lessee
shall, not later than the Business Day next succeeding the 120th day following
the occurrence of such Event of Loss (A) convey or cause to be conveyed to
Lessor (or so long as the Japanese Lease is in effect, to Primary Lessor) and to
be leased by Lessee hereunder, an aircraft (or an airframe or an airframe and
one or more engines which, together with the Engines constituting a part of the
Aircraft but not installed thereon at the time of such Event of Loss, constitute
the Aircraft) free and clear of all Liens (other than Permitted Liens) and
having at least the value and utility and being in as good an operating
condition as, the Aircraft subject to such Event of Loss assuming that the
Aircraft had been maintained in accordance with this Lease; provided that any
aircraft, airframe or engine so substituted hereunder shall be of the same or
improved make and model as those initially leased hereunder and (B) prior to or
at the time of any such substitution, Lessee (or any Sublessee), at its own
expense, will (1) furnish Lessor (or so long as the Japanese Lease is in effect,
Primary Lessor) with a full warranty bill of sale and a FAA bill of sale, in
form and substance reasonably satisfactory to Owner Participant (or so long as
the Japanese Lease is in effect, to Primary Lessor), evidencing such transfer of
title, (2) cause a Lease Supplement and a Trust Supplement to be duly executed
by Lessee and filed for recording pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Airframe may then be registered, (3) furnish Owner Participant with such
evidence of compliance with the insurance provisions of Section 11 with respect
to such substituted property as Owner Participant may reasonably request, (4)
provide to Owner Participant an opinion of tax counsel, who shall be
satisfactory to Owner Participant, as to the tax consequences (without any
requirement as to the nature of such tax consequences) to the Lessor and Owner
Participant of such substitution and Lessor shall acquire legal title to the
Aircraft pursuant to the terms of the Japanese Lease (if the Japanese Lease is
then in effect) and Lessor simultaneously will comply with the terms of the
Trust Indenture and transfer to or at the direction of Lessee, without recourse
or warranty (except as to the absence of Lessor Liens (including for this
purpose Liens that would be Lessor Liens but for the proviso to the definition
of Lessor Liens)), all of Lessor's right, title and interest in and to the
Aircraft or the Airframe and one or more Engines, as the case may be, with
respect to which such Event of Loss occurred and furnish to or at the direction
of Lessee a bill of sale in form and substance reasonably satisfactory to
Lessee, evidencing such transfer, (5) provide an opinion of counsel, which
counsel and opinion shall be reasonably acceptable to the Owner Participant, to
the effect that Lessor, the Owner Participant and the Indenture Trustee shall be
entitled to the benefits and protections of Section 1110 of the Bankruptcy Code
with respect to

                                       41
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

the aircraft substituted hereunder, (6) provide an opinion of counsel, which
counsel shall be reasonably acceptable to the Owner Participant, to the effect
that title to such replacement aircraft has been duly conveyed to the Lessor (or
so long as the Japanese Lease is in effect, to the Primary Lessor, subject
to the Japanese Lease) free and clear of all Liens except Permitted Liens, that
such replacement aircraft is duly subjected to the Lien of the Trust Indenture,
and as to such other matters as may be reasonably requested by the Owner
Participant, (7) so long as the Japanese Lease is in effect, provide an opinion
of Japanese counsel, which counsel shall be reasonably acceptable to the Owner
Participant, to the effect that the terms and conditions of the Japanese Lease
apply to the substituted property to the same extent and with the same force and
effect as to the Airframe or any Engine subject to such loss and as to any other
such matters as may be reasonably requested by the Owner Participant, (8) Lessee
will be subrogated to all claims of Lessor and Owner Participant, if any,
against third parties for damage to or loss of the Airframe and any Engine which
were subject to such Event of Loss (other than Lessor's or Owner Participant's
insurers under policies independently maintained at their own cost and expense
in accordance with Section 11(e) hereof), (9) the substituted Airframe or Engine
shall be of the same or an improved make and model as the Airframe or Engine
replaced, and the substituted Airframe and Engines, if any, have a value and
utility (with respect to Engines, without regard to hours or cycles) at least
equal to, and be in as good operating condition and repair as, the Airframe and
any Engines replaced (assuming that such Airframe and Engines were in the
condition required by the terms hereby) as evidenced by a certificate of an
aircraft engineer (who may be an employee of the Lessee) or an appraisal from an
independent aircraft appraiser and (10) provide a certificate of an officer of
the Lessee to the effect that each of the foregoing conditions has been
satisfied. For all purposes hereof, the property so substituted shall after such
transfer be deemed part of the property leased hereunder and shall be deemed an
"Aircraft," "Airframe" and "Engine," as the case may be, as defined herein. No
Event of Loss with respect to the Airframe or the Airframe and the Engines or
engines then installed thereon for which substitution has been elected pursuant
to Section 10(a)(ii) hereof shall result in any reduction in Basic Rent.

          (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
forthwith (and in any event, within fifteen days after such occurrence) give
Lessor written notice thereof and shall, within forty-five days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor (or,
so long as the Japanese Lease is in effect, cause legal title to be conveyed to
the Primary Lessor, subject to the rights of Lessee under the Japanese Lease and
Lessor under the Japanese Lease Assignment), as replacement for the Engine with
respect to which such Event of Loss occurred, title to another United
Technologies Corporation, Pratt & Whitney Group, Model PW4056 engine (or engine
of the same or another manufacturer of the same, an equivalent or an improved
model and suitable for installation and use without any retrofitting on the
Airframe) free and clear of all Liens (other than Permitted Liens, which engine
may upon its transfer to Lessor (or, so long as the Japanese Lease is in effect,
the transfer of legal title to the Primary Lessor, subject

                                       42
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

to the rights of Lessee under the Japanese Lease and Lessor under the Japanese
Lease Assignment) become subject to any and all Permitted Liens) and having a
value and utility at least equal to, and being in as good an operating condition
as and having been maintained in the same manner as, the Engine subject to such
Event of Loss (assuming that such Engine had been maintained in accordance with
this Lease). Lessor shall, at Lessee's sole expense, take all actions required
to terminate the Japanese Lease with respect to such Engine and to replace such
Engine pursuant to the terms of the Japanese Lease. Prior to or at the time of
any such conveyance, Lessee, at its own expense, will (i) furnish Lessor (with a
copy to the Indenture Trustee) with a warranty (as to title) bill of sale, in
form and substance reasonably satisfactory to Owner Participant (or so long as
the Japanese Lease is in effect, to Primary Lessor), with respect to such
replacement engine, (ii) cause a Lease Supplement and Trust Supplement to be
duly executed by Lessee and to be filed for recording pursuant to the Federal
Aviation Act, or the applicable laws, rules and regulations of any other
jurisdiction in which the Airframe may then be registered, (iii) furnish Owner
Participant (with a copy to the Indenture Trustee) with such evidence of
compliance with the insurance provisions of Section 11 hereof with respect to
such replacement engine as Owner Participant may reasonably request, (iv)
provide the Lessor, the Owner Participant and the Indenture Trustee with an
opinion of Lessee's counsel to the effect that title to such replacement engine
has been duly conveyed to the Lessor (or, so long as the Japanese Lease is in
effect, to the Primary Lessor, subject to the Japanese Lease) free and clear of
all Liens except Permitted Liens, that such replacement engine is duly subject
to the Lien of the Trust Indenture and as to such other matters as may be
reasonably requested by Owner Participant, and (v) provide to the Owner
Participant the documentation required to be provided by Lessor pursuant to
Section 5.01 of the Trust Indenture satisfactory in form and substance to Owner
Participant, and Lessor will comply with the terms of the Trust Indenture and
transfer to or at the direction of Lessee without recourse or warranty (except
as to absence of Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso to the definition of Lessor Liens)) all of
Lessor's right, title and interest, if any, in and to (A) the Engine with
respect to which such Event of Loss occurred and furnish to or at the direction
of Lessee a bill of sale in form and substance reasonably satisfactory to
Lessee, evidencing such transfer and (B) all claims, if any, against third
parties (other than Lessor's or the Owner Participant's insurers under policies
independently maintained at its own expense in accordance with Section 11(e)
hereof), for damage to or loss of the Engine subject to such Event of Loss, and
such Engine shall thereupon cease to be an Engine leased hereunder. 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."
No Event of Loss with respect to an Engine under the circumstances contemplated
by the terms of this paragraph (b) shall result in any reduction in Basic Rent.

          (c)  Application of Payments from Governmental Authorities for
               ---------------------------------------------------------
Requisition of Title, etc. 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 theft, disappearance,

                                       43
<PAGE>

condemnation, confiscation or seizure of, or requisition of title to or use of,
the Airframe or any Engine, other than a requisition for use by the United
States Government or other government of registry of the Aircraft or any
instrumentality or agency of any thereof not constituting an Event of Loss, will
be applied as follows:

          (i)   if payments are received with respect to the Airframe (or the
     Airframe and any Engine or engines then installed thereon), (A) after
     reimbursement of Lessor (as provided in Section 7.1 of the Trust Agreement)
     and the Owner Participant for reasonable costs and expenses, so much of
     such payments remaining as shall not exceed the Stipulated Loss Value
     required to be paid by Lessee to Lessor pursuant to Section 10(a) shall be
     applied in reduction of Lessee's obligation to pay Stipulated Loss Value,
     if not already paid by Lessee, or, if already paid by Lessee, shall be
     applied to reimburse Lessee for its payment of Stipulated Loss Value, and
     following the foregoing application, the balance, if any, of such payments
     shall be distributed between Lessee and Lessor as their respective
     interests may appear; or (B) if such property is replaced pursuant to the
     last paragraph of Section 10(a), such payments shall be paid over to or
     retained by, Lessee; provided, that Lessee shall have fully performed or,
     concurrently therewith, will fully perform the terms of the last paragraph
     of Section 10(a) with respect to the Event of Loss for which such payments
     are made; and

          (ii)  if such payments are received with respect to an Engine under
     circumstances contemplated by Section 10(b) hereof, so much of such
     payments remaining after reimbursement of Lessor (as provided in Section
     7.1 of the Trust Agreement) and the Owner Participant for reasonable costs
     and expenses shall be paid over to, or retained by, Lessee, provided that
     Lessee shall have fully performed, or concurrently therewith will perform,
     the terms of Section 10(b) with respect to the Event of Loss for which such
     payments are made.

          (d)  Requisition for Use of the Aircraft by the United States
               --------------------------------------------------------
Government or Government of Registry of the Aircraft. In the event of the
----------------------------------------------------
requisition for use of the Airframe and the Engines or engines installed on the
Airframe during the Term by the United States Government or any other government
of registry of the Aircraft or any instrumentality or agency of any thereof,
Lessee shall promptly notify Lessor of such requisition, and all of Lessee's
obligations under this Lease Agreement with respect to the Aircraft shall
continue to the same extent as if such requisition had not occurred, provided
that if such Airframe and Engines or engines installed thereon are not returned
by such government prior to the end of the Term, Lessee shall be obligated to
return the Airframe and such Engines or engines to Lessor pursuant to, and in
all other respects in compliance with the provisions of, Section 5 promptly on
the date of such return by such government. If Lessee shall fail to return the
Aircraft on or before the thirtieth day beyond the end of the Term, such failure
shall constitute an Event of Loss which shall be deemed to have occurred on the
last day of the Term and Lessee shall make the payments required by Section
10(a)(i), provided, however, that Lessor may notify Lessee in writing on or

                                       44
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

before the twentieth day prior to the last day of the Term that, in the event
Lessee shall fail by reason of such requisition to return the Airframe and such
Engines or engines on or before the thirtieth day beyond the end of the Term,
such failure shall not be deemed an Event of Loss. Upon the giving of such
notice and such failure to return by the thirtieth day beyond the end of the
Term, Lessee shall be relieved of all of its obligations pursuant to the
provisions of Section 5 (but not under any other Section), and (i) Lessee shall
pay to Lessor the daily equivalent of the Basic Rent paid during the last Lease
Period of the Term for such 30 day period and (ii) if any engine not owned by
Lessor shall then be installed on the Airframe, Lessee will, at no cost to
Lessor, furnish, or cause to be furnished, to Lessor a full warranty (as to
title) bill of sale with respect to each such engine, in form and substance
reasonably satisfactory to Owner Participant (together with an opinion of
counsel (which may be Lessee's General Counsel) to the effect that such full
warranty bill of sale has been duly authorized and delivered and is enforceable
in accordance with its terms and that such engines are free and clear of Liens
other than Lessor Liens (including for this purpose Liens that would be Lessor
Liens but for the proviso to the definition of Lessor Liens)), against receipt
from Lessor of a bill of sale evidencing the transfer, without recourse or
warranty (except as to the absence of Lessor Liens (including for this purpose
Liens that would be Lessor Liens but for the proviso to the definition of Lessor
Liens)), by Lessor to Lessee or its designee of all of Lessor's right, title and
interest in and to any Engine constituting part of the Aircraft but not then
installed on the Airframe. All payments received by Lessor or Lessee from such
government for the use of such Airframe and Engines or engines during the Term
shall be paid over to, or retained by, Lessee (or, if directed by Lessee, any
Sublessee); and all payments received by Lessor or Lessee from such government
for the use of such Airframe and Engines or engines after the end of the Term
shall be paid over to, or retained by, Lessor unless Lessee shall have exercised
its purchase option hereunder, or there is a deemed Event of Loss hereunder, or
Lessee shall have paid the daily equivalent of Basic Rent for such period as
provided above, in which case such payments shall be made to Lessee.

          (e)  Requisition for Use of an Engine by the United States Government
               ----------------------------------------------------------------
or the Government of Registry of the Aircraft. In the event of the requisition
---------------------------------------------
for use of an Engine by the United States Government or any other government of
registry of the Aircraft or any agency or instrumentality of any thereof (other
than in the circumstances contemplated by subsection (d)), Lessee shall replace
such Engine hereunder by complying (or causing any Sublessee to comply) 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, upon compliance with Section 10(b) hereof, any
payments received by Lessor or Lessee from such government with respect to such
requisition shall be paid over to, or retained by Lessee.

          (f)  Application of Payments During Existence of Events of Default.
               -------------------------------------------------------------
Any amount referred to in this Section 10 which is payable to or retainable by
Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or any
Sublessee) if at the time of such payment or retention a Default or an Event of
Default shall have occurred and be continuing, but shall be held by or paid over
to Lessor as security for the obligations of Lessee (and such

                                       45
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Sublessee) under this Lease and, if Lessor declares this Lease to be in default
pursuant to Section 15 hereof, applied against Lessee's obligations hereunder as
and when due. At such time as there shall not be continuing any such Default or
Event of Default, such amount shall be paid to Lessee to the extent not
previously applied in accordance with the preceding sentence.

          SECTION 11. Insurance.
                      ---------

               (a)    Public Liability and Property Damage Insurance.
                      ----------------------------------------------

                      (1)   Except as provided in clause (2) of this Section
          11(a), and subject to the self-insurance to the extent permitted by
          Section 11(d), Lessee will carry or cause to be carried at its or any
          Sublessee's expense (i) comprehensive airline liability (including,
          without limitation, passenger, contractual, bodily injury and property
          damage legal liability) insurance and property damage insurance
          (exclusive of manufacturer's product liability insurance) and (ii)
          cargo liability insurance with respect to the Aircraft, (A) in an
          amount not less than the greater of (x) the amounts of public
          liability and property damage insurance from time to time applicable
          to aircraft owned by Lessee of the same type as the Aircraft which
          comprise Lessee's fleet and (y) $400,000,000 per occurrence (or such
          other amount per occurrence as the parties hereto may from time to
          time agree in writing), (B) of the type and covering the same risks as
          from time to time applicable to aircraft owned by Lessee of the same
          type as the Aircraft and which comprise Lessee's fleet and (C) which
          is maintained in effect with insurers of recognized responsibility;
          provided, however, that Lessee need not maintain cargo liability
          insurance, or may maintain such insurance in an amount less than
          $400,000,000 per occurrence, as long as the amount of cargo liability
          insurance, if any, maintained with respect to the Aircraft is the same
          as the cargo liability insurance, if any, maintained for other Boeing
          Model 747-422 aircraft operated by Lessee.

                      (2)   During any period that the Aircraft is on the ground
          and not in operation, Lessee may carry or cause to be carried, in lieu
          of the insurance required by clause (1) above, and subject to the
          self-insurance to the extent permitted by Section 11(d), insurance
          otherwise conforming with the provisions of said clause (1) except
          that (A) the amounts of coverage shall not be required to exceed the
          amounts of comprehensive aircraft public liability and property damage
          insurance from time to time applicable to aircraft owned by Lessee of
          the same type as the Aircraft which comprise Lessee's fleet and which
          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 shall be applicable to aircraft owned by Lessee of the same type
          which comprise Lessee's fleet and which are on the ground and not in
          operation.

               (b)    Insurance Against Loss or Damage to the Aircraft.
                      ------------------------------------------------

                                       46
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                      (1)   Except as provided in clause (2) of this Section
          11(b), and subject to the provisions of Section 11(d) permitting self-
          insurance, Lessee shall maintain or cause to be maintained in effect,
          at its or any Sublessee's expense, with insurers of recognized
          responsibility, all-risk aircraft hull and fire and extended coverage
          insurance covering the Aircraft and all-risk property damage insurance
          covering Engines and Parts while temporarily removed from the Aircraft
          and not replaced by similar components (including, without limitation,
          war risk and governmental confiscation and expropriation (other than
          by the government of registry of the Aircraft) and hijacking
          insurance, (i) if the Aircraft is operated under a sublease by a
          Permitted Sublessee or (ii) if and to the extent such insurance is
          maintained by Lessee with respect to other aircraft owned or operated
          by Lessee on the same or similar geographic routes; provided, that
          such insurance shall at all times while the Aircraft is subject to
          this Lease be for an amount (taking into account self-insurance to the
          extent permitted by Section 11(d)) not less than the Stipulated Loss
          Value for the Aircraft. In the case of a loss with respect to an
          engine (other than an Engine) installed on the Airframe, Lessor shall
          hold any payment to it of any insurance proceeds in respect of such
          loss for the account of Lessee or any other third party that is
          entitled to receive such proceeds.

                      Except during a period when a Default or an Event of
          Default has occurred and is continuing, all losses will be adjusted by
          Lessee with the insurers. As between Lessor and Lessee, it is agreed
          that all insurance payments received as the result of the occurrence
          of an Event of Loss will be applied as follows:

                      (x)   if such payments are received with respect to the
          Airframe (or the Airframe and the Engines installed thereon), (i)
          unless such property is replaced pursuant to the last paragraph of
          Section 10(a), so much of such payments remaining, after reimbursement
          of Lessor and Owner Participant for reasonable costs and expenses, as
          shall not exceed the Stipulated Loss Value plus such other amounts
          required to be paid by Lessee pursuant to Section 10(a) hereof shall
          be applied in reduction of Lessee's obligation to pay such Stipulated
          Loss Value plus such amounts, 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 plus such amounts, and the
          balance, if any, of such payments remaining thereafter will be paid
          over to, or retained by, Lessee (or if directed by Lessee, any
          Sublessee); or (ii) if such property is replaced pursuant to the last
          paragraph of Section 10(a), such payments shall be paid over to, or
          retained by, Lessee (or if directed by Lessee, any Sublessee),
          provided that Lessee shall have fully performed or, concurrently
          therewith, will fully perform the terms of the last paragraph of
          Section 10(a) with respect to the Event of Loss for which such
          payments are made; and

                      (y)   if such payments are received with respect to an
         Engine under the circumstances contemplated by Section 10(b) hereof, so
         much of such payments remaining after reimbursement of Lessor and Owner
         Participant for reasonable costs and

                                       47
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

         expenses shall be paid over to, or retained by, Lessee (or if directed
         by Lessee, any Sublessee), provided, that Lessee shall have fully
         performed or, concurrently therewith, will fully perform the terms of
         Section 10(b) with respect to the Event of Loss for which such payments
         are made.

                    As between Lessor and Lessee, the insurance payments for any
         property damage loss to the Airframe or any Engine not constituting an
         Event of Loss with respect thereto shall be paid to Lessee (or any
         Sublessee if directed by Lessee).

                    (2)    During any period that the Aircraft is on the ground
         and not in operation, Lessee may carry or cause to be carried, in lieu
         of the insurance required by clause (1) above, and subject to the self-
         insurance to the extent permitted by Section 11(d), insurance otherwise
         conforming with the provisions of said clause (1) except that the scope
         of the risks and the type of insurance shall be the same as from time
         to time applicable to aircraft owned by Lessee of the same type as the
         Aircraft and which comprise Lessee's fleet similarly on the ground and
         not in operation, provided that, subject to the self-insurance to the
         extent permitted by Section 11(d), Lessee shall maintain insurance
         against risk of loss or damage to the Aircraft in an amount at least
         equal to the Stipulated Loss Value of the Aircraft during such period
         that the Aircraft is on the ground and not in operation.

               (c)  Reports, etc. Lessee will furnish, or cause to be furnished,
                    ------------
to Lessor, the Indenture Trustee, the Owner Participant and, on and after the
Refinancing Date only, so long as the Pass Through Trustees are Certificate
Holders, the Pass Through Trustees, on or before the Effective Date and April 1
in each year during the Term, a report, signed by Aon Risk Services, Inc. of
Illinois or any other independent firm of insurance brokers reasonably
acceptable to Lessor and Owner Participant which brokers may be in the regular
employ of Lessee (the "Insurance Brokers"), describing in reasonable detail the
hull and liability insurance (and property insurance for detached engines and
parts) then carried and maintained with respect to the Aircraft and stating the
opinion of such firm that such insurance complies with the terms hereof;
provided, that all information contained in the foregoing report shall not be
made available by Lessor, the Indenture Trustee, the Pass Through Trustees (on
and after the Refinancing Date only), or the Owner Participant to anyone except
(A) to prospective and permitted transferees of Lessor's, the Indenture
Trustee's, the Pass Through Trustees' (on and after the Refinancing Date only),
or the Owner Participant's interest, who agree to hold such information
confidential, (B) to Lessor's, the Indenture Trustee's, the Pass Through
Trustees' (on and after the Refinancing Date only), or the Owner Participant's
counsel or independent certified public accountants, independent insurance
advisors or other agents who agree to hold such information confidential or (C)
as may be required by any statute, court or administrative order or decree or
governmental ruling or regulation. Lessee will cause such Insurance Brokers to
agree to advise Lessor, the Owner Participant, the Indenture Trustee and, on and
after the Refinancing Date only, so long as the Pass Through Trustees are
Certificate Holders, the Pass Through

                                       48
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Trustees in writing of any default in the payment of any premium and of any
other act or omission on the part of Lessee of which it has knowledge and which
might invalidate or render unenforceable, in whole or in part, any insurance on
the Aircraft or cause such insurance to lapse and to advise such persons in
writing at least 30 days (7 days in the case of war risk and allied perils
coverage) prior to the cancellation, lapse (to the extent such advice is
reasonably available) or material change of any insurance maintained pursuant to
this Section 11, provided that if the notice period specified above is not
reasonably obtainable, the Insurance Brokers shall provide for as long a period
of prior notice as shall then be reasonably obtainable. In addition, Lessee will
also cause such Insurance Brokers to deliver to Lessor, the Owner Participant,
Pass Through Trustees (on and after the Refinancing Date only), so long as the
Pass Through Trustees are Certificate Holders, and the Indenture Trustee, on or
prior to the date of expiration of any insurance policy referenced in a
previously delivered certificate of insurance, a new certificate of insurance,
substantially in the same form as delivered by Lessee to such parties on the
Effective Date. In the event that Lessee or any Sublessee shall fail to maintain
or cause to be maintained insurance as herein provided, Lessor, the Pass Through
Trustees (on and after the Refinancing Date only), so long as the Pass Through
Trustees are Certificate Holders, or the Indenture Trustee may at its sole
option provide such insurance and, in such event, Lessee shall, upon demand,
reimburse Lessor, the Pass Through Trustees (on and after the Refinancing Date
only), so long as the Pass Through Trustees are Certificate Holders, or the
Indenture Trustee, as Supplemental Rent, for the cost thereof to Lessor, the
Indenture Trustee or, on and after the Refinancing Date only, such Pass Through
Trustee, as the case may be, together with interest on such cost at the Past Due
Rate from the date of payment by Lessor to the date of reimbursement without
waiver of any other rights Lessor may have.

          (d)  Self-Insurance. Lessee may self-insure, by way of deductible,
               --------------
premium adjustment provisions in insurance policies, or otherwise, the risks
required to be insured against pursuant to this Section 11 under a program
applicable to all aircraft in Lessee's fleet, but in no case shall the self-
insurance in regard to Sections 11(a) or 11(b) with respect to all of the
aircraft in Lessee's fleet (including, without limitation, the Aircraft) exceed
for any calendar year the lesser of (A) 50% of the largest replacement value of
any single aircraft in Lessee's fleet or (B) 1-1/2% of the average aggregate
insurable value (for the preceding calendar year) of all aircraft (including,
without limitation, the Aircraft) on which Lessee carries insurance. In addition
to the foregoing right to self-insure, Lessee shall have the right to self-
insure to the extent of any applicable mandatory minimum per aircraft (or, if
applicable, per annum or other period) hull or liability insurance deductible
imposed by the aircraft hull or liability insurer.

          (e)  Additional Insurance by Lessor and Lessee. Lessee (and any
               -----------------------------------------
Sublessee) may at its own expense carry insurance with respect to its interest
in the Aircraft in amounts in excess of that required to be maintained by this
Section 11; Lessor or the Owner Participant may carry for its own account at its
sole cost and expense insurance with respect to its interest in the Aircraft,
provided that such insurance does not prevent Lessee (or any Sublessee) from
carrying the insurance required by this Section 11 or adversely affect such
insurance or the cost thereof.

                                       49
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          (f)  Indemnification by Government in Lieu of Insurance.
               --------------------------------------------------
Notwithstanding any provisions of this Section 11 requiring insurance, Lessor
agrees to accept, in lieu of insurance against any risk with respect to the
Aircraft, indemnification from, or insurance provided by, the United States
Government or any agency or instrumentality thereof the obligations of which are
supported by the full faith and credit of the United States Government, against
such risk in an amount which, when added to the amount of insurance against such
risk maintained by Lessee (or any Sublessee) shall be at least equal to the
amount of insurance against such risk otherwise required by this Section 11
(taking into account self-insurance permitted by Section 11(d)).

          (g)  Application of Payments During Existence of an Event of Default.
               ---------------------------------------------------------------
Any amount referred to in this Section 11 which is payable to or retainable by
Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or any
Sublessee) if at the time of such payment or retention a Default or an Event of
Default shall have occurred and be continuing, but shall be held by or paid over
to Lessor as security for the obligations of Lessee under this Lease and, if a
Default or an Event of Default shall have occurred and be continuing, applied
against Lessee's obligations hereunder as and when due. At such time as there
shall not be continuing any such Default or such Event of Default, such amount
shall be paid to Lessee to the extent not previously applied in accordance with
the preceding sentence.

          (h)  Terms of Insurance Policies. Any policies carried in accordance
               ---------------------------
with Sections 11(a) and 11(b) covering the Aircraft, and any policies taken out
in substitution or replacement for any such policies, (A) shall name the
Additional Insureds as additional insureds, or, if appropriate, loss payees, as
their respective interests may appear (but without imposing on any such party
liability to pay premiums with respect to such insurance), (B) may provide for
self-insurance to the extent permitted in Section 11(d), (C) shall provide that
if the insurers cancel such insurance for any reason whatever, or if any
material change is made in the insurance which adversely affects the interest of
any Additional Insured, such cancellation or change shall not be effective as to
any Additional Insured for thirty days (seven days in the case of war risk and
allied perils coverage) after receipt by such Additional Insured of written
notice by such insurers of such cancellation or change, provided, however, that
if any notice period specified above is not reasonably obtainable, such policies
shall provide for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests of
each Additional Insured in such policies the insurance shall not be invalidated
by any action or inaction of Lessee (or any Sublessee) and shall insure the
respective interests of the Additional Insureds, as they appear, regardless of
any breach or violation of any warranty, declaration or condition contained in
such policies by Lessee (or any Sublessee), (E) shall be primary without any
right of contribution from any other insurance which is carried by any
Additional Insured, (F) shall waive any right of the insurers to set-off or
counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of any Additional Insured and shall waive insurers'
subrogation rights, and (G) shall provide that (i) in the event of a loss
occurring during the continuance of a Default or Event of Default or a loss
involving proceeds in excess of

                                       50
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

$5,000,000 (or, if the Aircraft is then under a Sublease, in excess of
$2,500,000), the proceeds in respect of such loss up to the amount of Stipulated
Loss Value shall be payable to Lessor (or, so long as the Trust Indenture shall
not have been discharged, the Indenture Trustee, as Lessor's assignee) (except
in the case of a loss with respect to an Engine installed on an airframe other
than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any
payment of insurance proceeds (in the event of a loss involving proceeds in
excess of such amounts) in respect of such loss to be held by Lessor (or, unless
notified to the contrary by the Indenture Trustee, the Indenture Trustee)
whether such payment is made to Lessee (or any Sublessee) or any third party),
it being understood and agreed that in the case of any payment to Lessor (or the
Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the
Indenture Trustee) shall, upon receipt of evidence reasonably satisfactory to it
that the damage giving rise to such payment shall have been repaired or that
such payment shall then be required to pay for repairs then being made, pay the
amount of such payment, and any interest or income earned thereon in accordance
with Section 22 hereof, to Lessee or its order, and (ii) the entire amount of
any loss involving proceeds of $5,000,000 (or, if the Aircraft is then under a
Sublease, of $2,500,000) or less or the amount of any proceeds of any loss in
excess of Stipulated Loss Value for the Aircraft shall be paid to Lessee or its
order unless a Default or an Event of Default shall have occurred and be
continuing and the insurers have been notified thereof by Lessor or the
Indenture Trustee; provided that any such amount shall be applied by Lessee
towards the repair of the damage caused by such loss to the extent the same is
required to repair such damage.

     SECTION 12. Inspection. The Owner Participant or the Indenture Trustee or
                 ----------
their respective authorized representatives may annually (except during the
continuance of an Event of Default when such inspection right shall not be so
limited) inspect the Aircraft and annually (except during the continuance of an
Event of Default when such inspection right shall not be so limited) inspect and
make copies of the books and records of Lessee and any Sublessee required to be
maintained by the FAA and any other applicable jurisdiction relating to the
maintenance of the Aircraft (at the Owner Participant's or the Indenture
Trustee's expense, as the case may be) and shall keep any information or copies
obtained thereby confidential and shall not disclose the same to any Person,
except (A) to the Pass Through Trustees (on and after the Refinancing Date only)
and to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Pass Through Trustees' or the Indenture Trustee's interest
who agree to hold such information confidential, (B) to Lessor's, the Owner
Participant's, the Pass Through Trustees' (on and after the Refinancing Date
only) or the Indenture Trustee's counsel, independent insurance advisors or
other agents who agree to hold such information confidential or (C) as may be
required by any statute, court or administrative order or decree or governmental
ruling or regulation. Any such inspection (which may include an on-board
inspection) of the Aircraft shall be a visual, walk-around inspection and shall
not include opening any panels, bays or the like without the express consent of
Lessee, which consent Lessee may in its sole discretion withhold; provided that
no exercise of such inspection right shall interfere with the normal operation
or maintenance of the Aircraft by, or the business of, Lessee (or any
Sublessee). Upon receipt by Lessee of a written request from the Owner
Participant stating that the Owner Participant desires to have its

                                       51
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

authorized representative observe the last scheduled heavy maintenance visit to
be performed on the Aircraft during the Term (or substantially equivalent
maintenance work), Lessee shall cooperate with the Owner Participant to enable
the Owner Participant's representative to observe such heavy maintenance visit,
provided that the Owner Participant's authorized representative shall merely
observe such heavy maintenance visit, shall not interfere with or extend in any
manner the normal conduct or duration of the heavy maintenance visit and shall
not be entitled to direct any of the work performed in connection with such
heavy maintenance visit. Neither the Owner Participant nor the Indenture Trustee
shall have any duty to make any such inspection nor shall any of them incur any
liability or obligation by reason of not making any such inspection.

     SECTION 13. Assignment. Except as otherwise provided in the Operative
                 ----------
Documents, Lessee will not, without the prior written consent of Lessor, assign
any of its rights hereunder. Lessor agrees that it will not assign or convey its
right, title and interest in and to this Lease or the Aircraft except as
provided in the Operative Documents. Subject to the foregoing, the terms and
provisions of this Lease shall be binding upon and inure to the benefit of
Lessor and Lessee and their respective successors and permitted assigns.

     SECTION 14. Events of Default. Each of the following events shall
                 -----------------
constitute an Event of Default (whether any 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 Event of
Default shall continue so long as, but only as long as, it shall not have been
remedied, unless Lessor shall have commenced the exercise of remedies prior
thereto and the cure by Lessor of such Event of Default subsequent to such
commencement would prejudice Lessor:

          (a)  Lessee shall not have made a payment of Basic Rent or a payment
of Supplemental Rent which constitutes premium on the Certificates within 10
Business Days after the same shall have become due; or

          (b)  Lessee shall have failed to make a payment of Supplemental Rent
(other than a payment of Supplemental Rent which constitutes premium on the
Certificates) after the same shall have become due and such failure shall
continue for 15 Business Days after Lessee's receipt of written demand therefor
by the party entitled thereto (provided that any failure to pay any amount owed
by Lessee under the Tax Indemnity Agreement or any failure of Lessee to pay to
Lessor or the Owner Participant when due any Excluded Payments shall not
constitute an Event of Default unless notice is given by Lessor or the Owner
Participant to Lessee and the Indenture Trustee that such failure shall
constitute an Event of Default); or

          (c)  Lessee shall have failed to perform or observe (or caused to be
performed or observed) any other covenant or agreement to be performed or
observed by it under any Operative Document (other than the Relevant Documents),
and such failure shall continue unremedied for a period of thirty days after
written notice thereof by Lessor or the Indenture

                                       52
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Trustee; provided, however, that if Lessee shall have within such thirty-day
period undertaken to cure any such failure which arises under clause (ii) of
Section 7(a)(1), or under the first sentence of Section 7(a)(2) as it relates to
maintenance, service, repair or overhaul or under Section 8 (and shall have
provided the Lessor and the Indenture Trustee with an Officer's Certificate
setting forth the nature of such failure and the steps being taken to cure such
failure) and, notwithstanding the reasonable diligence of Lessee in attempting
to cure such failure, such failure is not cured within said thirty-day period
but is curable with future due diligence, there shall exist no Event of Default
under this Section 14 so long as Lessee is proceeding with due diligence to cure
such failure and such failure shall be cured within a reasonable period of time
not to exceed 365 days; or

          (d)  any material representation or warranty made by Lessee herein or
in the Participation Agreement or any document or certificate furnished by
Lessee in connection herewith or therewith or pursuant hereto or thereto (except
the representations and warranties set forth in the Relevant Documents and those
set forth in Section 4 of the Tax Indemnity Agreement and such documents or
certificates as are furnished to Lessor solely in connection with matters dealt
with in the Tax Indemnity Agreement and for no other purpose) shall prove to
have been incorrect in any material respect at the time made; provided, however,
such incorrectness shall constitute a default hereunder only if such
incorrectness shall continue uncured for a period of thirty days after the
receipt by Lessee of a written notice from Lessor or the Indenture Trustee
advising Lessee of the existence of such incorrectness; or

          (e)  the commencement of an involuntary case or other proceeding in
respect of Lessee in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or seeking the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Lessee or for all or substantially all of
its property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed or unstayed for a
period of 60 consecutive days or an order, judgment or decree shall be entered
in any proceeding by any court of competent jurisdiction appointing, without the
consent of Lessee, a receiver, trustee or liquidator of Lessee, or for all or
substantially all of its property, or sequestering of all or substantially all
of the property of Lessee and any such order, judgment or decree or appointment
or sequestration shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of 60 consecutive days after the date of entry
thereof; or

          (f)  the commencement by Lessee of a voluntary case or other
proceeding under the federal bankruptcy laws, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy, insolvency or
other similar law in the United States, or the consent by Lessee to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Lessee or for
all or substantially all of

                                       53
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

its property, or the making by Lessee of any assignment for the benefit of
creditors or Lessee shall take any corporate action to authorize any of the
foregoing; or

          (g)  Lessee shall fail to carry and maintain on or with respect to the
Aircraft (or cause to be carried and maintained) insurance required to be
maintained in accordance with the provisions of Section 11 hereof;

provided, however, that, notwithstanding anything to the contrary contained in
this Section 14, any failure of Lessee to perform or observe any covenant,
condition, agreement or any error in a representation or warranty shall not
constitute an Event of Default if such failure or error is caused solely by
reason of any event that constitutes an Event of Loss so long as Lessee is
continuing to comply with all of the terms of Section 10 hereof.

     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 by written notice to Lessee this Lease Agreement to be in
default; and at any time thereafter, so long as any such Event of Default shall
not have been remedied, Lessor may do one or more of the following with respect
to all or any part of the Airframe and any or all of the 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, however, that during any period the Aircraft is subject to the Civil
Reserve Air Fleet Program in accordance with the provisions of Section 7(b)
hereof and in the possession of the United States Government or an
instrumentality or agency thereof, 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) of any Airframe or any Engines installed thereon, unless at least 60
days' (or such lesser period as may then be applicable under the Military
Airlift Command program of the United States Government) written notice of
default hereunder shall have been given by Lessor by registered or certified
mail to Lessee (and any Sublessee) with a copy addressed to the Contracting
Office Representative for the Military Airlift Command of the United States Air
Force under any contract with Lessee (or any Sublessee) relating to the
Aircraft:

          (a)  upon the written demand of Lessor and at Lessee's expense, cause
Lessee to return promptly, and Lessee shall return promptly, 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 such Airframe or 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 is located and take immediate possession of
and remove the same by summary proceedings or otherwise, (and, at Lessor's
option, store the same at Lessee's premises until disposal thereof by Lessor),
all without liability accruing to Lessor (other than that caused by Lessor's
willful misconduct or gross negligence) for or by reason of such

                                       54
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

entry or taking of possession or removing whether for the restoration of damage
to property caused by such action or otherwise;

          (b)  sell the Aircraft at public or private sale, as Lessor may
determine, or otherwise dispose of, hold, use, operate, lease to others or keep
idle the Aircraft 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;

          (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 the Aircraft, Lessor, by written notice to Lessee
specifying a payment date which shall be the Lease Period Date not earlier than
ten days from the date of such notice, may demand that the Lessee pay to Lessor,
and Lessee shall pay Lessor, on the payment date so specified, as liquidated
damages for loss of a bargain and not as a penalty (in lieu of the installments
of Basic Rent for the Aircraft due for Lease Periods commencing on or after the
Commencement Date or the Lease Period Date specified as the payment date in such
notice), any unpaid Basic Rent due on Lease Period Dates on or prior to the
payment date so specified 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 Past Due Rate from such specified payment date until the
date of actual payment of such amount): (i) an amount equal to the excess, if
any, of the Stipulated Loss Value for the Aircraft, computed as of the Lease
Period Date specified as the payment date in such notice, over the aggregate
fair market rental value (computed as hereafter in this Section 15 provided) of
the Aircraft for the remainder of the Term, after discounting such aggregate
fair market rental value to present value as of the Lease Period Date specified
as the payment date in such notice at an annual rate equal to the Applicable
Rate; or (ii) an amount equal to the excess, if any, of the Stipulated Loss
Value for the Aircraft, computed as of the Lease Period Date specified as the
payment date in such notice, over the fair market sales value of the Aircraft
(computed as hereafter in this Section provided) as of the Lease Period Date
specified as the payment date in such notice;

          (d)  in the event Lessor pursuant to paragraph (b) above, shall have
sold the Aircraft, Lessor, in lieu of exercising its rights under paragraph (c)
above with respect to the Aircraft, may, if it shall so elect, demand that
Lessee pay Lessor, and Lessee shall pay to Lessor, on the date of such sale, as
liquidated damages for loss of a bargain and not as a penalty, any unpaid Basic
Rent with respect to the Aircraft due on or prior to such date plus the amount
of any deficiency between the net proceeds of such sale (after deduction of all
reasonable costs of sale) and the Stipulated Loss Value of the Aircraft,
computed as of the Stipulated Loss Value Date on or immediately following the
date of such sale together with interest, if any, on the amount of such
deficiency, at the Past Due Rate, from the date of such sale to the date of
actual payment of such amount; and/or

                                       55
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          (e)  Lessor may rescind or terminate this Lease Agreement as to the
Aircraft, and/or may exercise any other right or remedy which may be available
to it under applicable law or proceed by appropriate court action to enforce the
terms hereof or to recover damages for breach hereof.

          For the purposes of paragraph (c) above, the "fair market rental
value" or the "fair market sales value" of the Aircraft shall be the rental
value or sales value, as the case may be, which would be obtained in an arm's-
length transaction between an informed and willing lessee or purchaser, as the
case may be, under no compulsion to lease or purchase, as the case may be, and
an informed and willing lessor or seller in possession, as the case may be, in
each case based upon the actual condition and location of the Aircraft, which
value shall be determined by mutual agreement or, in the absence of mutual
written agreement, pursuant to an appraisal prepared and delivered by a
nationally recognized firm of independent aircraft appraisers nominated by
Lessor, and Lessor shall promptly notify Lessee of such nomination. Unless
Lessee shall have objected in writing within ten days after its receipt of
Lessor's notice, Lessor's nomination shall be conclusive and binding. If Lessee
shall object, however, Lessor and Lessee shall endeavor, within ten days after
such objection is made, to select a mutually acceptable appraiser; provided,
that if Lessee shall not so endeavor to make such selection, Lessor's nomination
referred to in the preceding sentence hereof shall be conclusive and binding. If
Lessor and Lessee fail to reach agreement (except for the reason referred to in
the proviso to the preceding sentence), or if any appraiser selected fails to
act for any reason, then the question shall be determined by an appraisal
(applying the definitions of "fair market rental value" and "fair market sales
value" as set forth above based upon the actual condition of the Aircraft)
mutually agreed to by two recognized independent aircraft appraisers, one of
which appraisers shall be chosen by Lessor and one by Lessee within five
Business Days after Lessor or Lessee shall have received written notice from the
other party of a demand that such an appraisal be made, which notice shall
specify the appraiser chosen by the party giving the notice or, if such
appraisers cannot agree on the amount of such appraisal within twenty Business
Days after the end of such five Business Day period, each shall render its own
appraisal and shall by mutual consent choose another appraiser within five
Business Days after the end of such twenty-day period. If, within such five
Business Day period, such two appraisers fail to appoint a third appraiser, then
either Lessor or Lessee, on behalf of both, may apply to the American
Arbitration Association (or any successor organization thereto) in Chicago,
Illinois, for the appointment of such third appraiser. The decision of the third
appraiser so appointed shall be given within twenty Business Days after the
appointment of such third appraiser. As soon as the third appraiser has
delivered his appraisal, that appraisal shall be compared with the appraisals
given by the other two appraisers. If the determination of one appraiser is more
disparate from the average of all three determinations than each of the other
two determinations, then the determination of such appraiser shall be excluded,
the remaining two determinations shall be averaged and such average shall be
final and binding upon the parties hereto. If no determination is more disparate
from the average of all three determinations than each of the other
determinations, then such average shall be final and

                                       56
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

binding upon the parties thereto. The cost of such appraisal or appointment
shall be borne by Lessee.

          In addition, Lessee shall be liable, except as otherwise provided
above without duplication of 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 reasonable and actual legal fees and other costs and
expenses incurred by Lessor, Owner Participant, and the Indenture Trustee in
connection with the 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.

          At any sale of the Aircraft or any part thereof pursuant to this
Section 15, Lessor, the Indenture Trustee or the Owner Participant may bid for
and purchase such property. Lessor agrees to give Lessee at least 10 days'
written notice of the date fixed for any public sale of any Airframe or Engine
or of the date on or after which will occur the execution of any contract
providing for any private sale and any such public sale shall be conducted in
general so as to afford Lessee (and any Sublessee) a reasonable opportunity to
bid. 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 waiver by Lessor of
any Default or Event of Default shall in any way be, or be construed to be, a
waiver of any future or subsequent Default or Event of Default.

     SECTION 16. Lessee's Cooperation Concerning Certain Matters. Forthwith upon
                 -----------------------------------------------
the execution and delivery of each Lease Supplement and Trust Supplement from
time to time required by the terms hereof or the terms of the Trust Indenture
and upon the execution and delivery of any amendment to this Lease or to the
Trust Agreement or Trust Indenture, Lessee, at its expense, will cause such
Lease Supplement, Trust Supplement or amendment to be duly filed and recorded,
and maintained of record, in accordance with the applicable laws of the
government of registry of the Aircraft. In addition, Lessee, at its expense,
will promptly and duly execute and deliver to Lessor or Owner Participant such
further documents and take such further action as Lessor may from time to time
reasonably request in order more effectively to carry out the intent and purpose
of this Lease and to establish and protect the rights and remedies created or
intended to be created in favor of Lessor, Owner Participant and the Indenture
Trustee hereunder, including, without limitation, if requested by Lessor or
Owner Participant , at the expense of Lessee, the execution and delivery of
supplements or amendments hereto, each in recordable form, subjecting to this
Lease and the Trust Indenture, any airframe or engine substituted for the
Airframe or any Engine pursuant to the terms thereof and the recording or filing
of counterparts thereof, in accordance with the laws of such jurisdictions as
Lessor may from time to time deem advisable. Lessee will promptly provide
Lessor, the Owner Participant, the Pass Through Trustees (on and after the
Refinancing Date only) (so long as the Pass Through

                                       57
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Trustees hold any Certificates) and the Indenture Trustee such financial and
other information concerning Lessee or its parent corporation as is provided
from time to time to shareholders of Lessee's parent corporation or filed by
such corporation with the Securities and Exchange Commission under the
Securities and Exchange Act of 1934. Within 60 days after the end of each of the
first three quarterly periods of Lessee, Lessee will provide Lessor, the Owner
Participant, the Pass Through Trustees (on and after the Refinancing Date only)
(so long as the Pass Through Trustees hold any Certificates) and the Indenture
Trustee with a consolidated balance sheet of Lessee prepared by it as of the end
of such period, together with the related consolidated statements of income and
changes in cash flow for such period. Within 120 days after the end of each
fiscal year, Lessee will provide Lessor, the Owner Participant, the Pass Through
Trustees (on and after the Refinancing Date only) (so long as the Pass Through
Trustees hold any Certificates) and the Indenture Trustee with a consolidated
balance sheet of Lessee as of the end of such year, together with the related
consolidated statements of income and changes in cash flow for such year, as
certified by independent public accountants of recognized national standing.
Commencing in 2001, on or before April 30 of each year during the Term, Lessee
will deliver to Lessor, the Owner Participant, the Pass Through Trustees (on and
after the Refinancing Date only) (so long as the Pass Through Trustees hold any
Certificates) and the Indenture Trustee a certificate of Lessee, signed by the
President, a Vice President, the Chief Financial Officer or the principal
accounting officer of Lessee to the effect that the signer is familiar with or
has reviewed the relevant terms of this Lease and the signer does not have
knowledge of the existence, as of the date of such certificate, of any condition
or event which constitutes a Default or an Event of Default. Lessee agrees that
if an officer of Lessee has knowledge of the existence of a Default or an Event
of Default, Lessee shall promptly give to Lessor, the Owner Participant, the
Pass Through Trustees (on and after the Refinancing Date only) (so long as the
Pass Through Trustees hold any Certificates) and the Indenture Trustee notice
thereof and such other information relating thereto as Lessor, the Owner
Participant, the Pass Through Trustees (on and after the Refinancing Date only)
(so long as the Pass Through Trustees hold any Certificates) or the Indenture
Trustee shall reasonably request.

     SECTION 17. Notices. All notices required under the terms and provisions
                 -------
hereof shall be in writing (including telex, telecopier or similar writing) and
shall be effective (a) if given by telecopier when transmitted and the
appropriate confirmation received, (b) if given by certified mail, three
Business Days after being deposited in the mails, (c) if given by telex, upon
receipt by the party transmitting the telex of such party's callback code at the
end of such telex (receipt of confirmation in writing not being necessary to the
effectiveness of any telex) and (d) if given by other means, when received or
personally delivered, addressed:

          (i)   if to Lessee, at P.O. Box 66100, Chicago, Illinois 60666, (or,
     if given by overnight delivery service, 1200 Algonquin Road, Elk Grove
     Township, Illinois, 60007) Attention: Assistant Treasurer, telecopier
     number (847) 952-7117, or to such other address or telex or telecopier
     number as Lessee shall from time to time designate in writing to Lessor,

                                       58
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

         (ii)   if to Lessor, at 2 Avenue de Lafayette, Boston, MA 02111-1724,
     Attention: Corporate Trust Department, telecopier number (617) 662-1458,
     confirmation number (617) 662-1682, or to such other address or telex or
     telecopier number as Lessor shall from time to time designate in writing to
     Lessee, with a copy to Owner Participant at the address set forth in clause
     (iv) below,

         (iii)  if to the Indenture Trustee, the Owner Participant or, on and
     after the Refinancing Date only, the Pass Through Trustees, addressed to
     such party at such address or telex or telecopier number as such party
     shall have furnished by notice to Lessor and to Lessee, and, until an
     address is so furnished, addressed to such party at its address or
     telecopier number set forth in Schedule I to the Participation Agreement,
     and

         (iv)   if to Owner Participant, c/o Fleet Capital Leasing, 111
     Westminster Street, 7th Floor, Providence, RI 02903, Attn: Steve Aalvik,
     telecopier number (401) 453-2536.

A notice given by telecopier or telex shall be confirmed by sending a copy of
such notice by courier delivery, certified mail or personal service; a notice
shall be given by mail only if overnight courier delivery services are not
readily available.

     SECTION 18. No Set-Off, Counterclaim, Etc. All Rent shall be paid by Lessee
                 -----------------------------
to Lessor in funds of the type specified in Section 3(e). Lessee's obligation to
pay all Rent payable hereunder shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which Lessee may have against
Lessor (in its individual capacity or as Owner Trustee), the Indenture Trustee
(in its individual capacity or as Indenture Trustee), the Certificate Holders,
the Primary Lessor, the Owner Participant, the Pass Through Trustees (on and
after the Refinancing Date only) or anyone else for any reason whatsoever
(whether in connection with the transactions contemplated hereby or any other
transactions), including, without limitation, any breach by Lessor, Owner
Participant or the Primary Lessor of their respective warranties, agreements or
covenants contained in any of the Operative Documents, (ii) any defect in the
title, registration, 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 (or any Sublessee) for any reason whatsoever, (iii) any insolvency,
bankruptcy, reorganization or similar case or proceedings by or against Lessee
(or any Sublessee) or any other person or (iv) any other circumstance, happening
or event whatsoever, whether or not foreseen 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 herein, Lessee
nonetheless agrees, without limitation of the other rights or remedies of Lessor
hereunder, subject to the right of Lessee to setoff under Sections 3(b) and 3(f)
hereof, to pay to Lessor an amount equal to each Rent payment 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

                                       59
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

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 hereof. The
Lessee covenants that it will remain obligated under this Lease in accordance
with its terms and will take no action to terminate, rescind or avoid this
lease, notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding affecting
the Lessor or the Owner Participant or any assignee of the Lessor or the Owner
Participant or any other action with respect to this Lease which may be taken in
any such proceeding by any trustee or receiver of the Lessor or the Owner
Participant or of any assignee of the Lessor or the Owner Participant or by any
court or any of the foregoing actions which may be taken by or against any of
the Lessor's predecessors in interest in the Airframe or any Engine.

     SECTION 19. Renewal Options; Purchase Options; Valuation.
                 --------------------------------------------

          (a)    Renewal Options.
                 ---------------

                 (1)  Fixed Renewal Term. Not less than 120 days before the end
                      ------------------
     of the Basic Term and provided no Default or Event of Default shall be
     continuing, Lessee may deliver to Lessor a written notice irrevocably
     electing to renew this Lease (any such renewal term, the "Fixed Renewal
     Term") for a term having a duration as determined as follows. At least 270
     days before the end of the Basic Term, Lessee shall, as a condition to its
     exercise of this option, notify Lessor of its demand for an appraisal
     pursuant to the appraisal procedures (which shall be performed at Lessee's
     expense) of Section 19(c). The appraiser(s) so appointed shall determine
     the total useful life, the remaining useful life and the future residual
     value of the Aircraft on the expiration date for the Fixed Renewal Term as
     may be set in accordance with the constraints set forth in the following
     sentence. The duration of the Fixed Renewal Term shall be a period
     specified by Lessee before the end of the Basic Term which is (a) not less
     than one year and (b) not more than the shorter of (i) two years or (ii)
     the longest period of time (x) which would cause the Term, after giving
     effect to the Fixed Renewal Term, to be equal to 80% of the total useful
     life of the Aircraft (from and after the Delivery Date) as determined by
     the appraiser(s) and (y) at the expiration of which the residual value of
     the Aircraft, as estimated by the appraiser(s), would be at least equal to
     20% of Lessor's Cost (without taking into account inflation or deflation
     subsequent to the Delivery Date).

                 (2)  Fair Market Renewal Term. Provided that no Default or
                      ------------------------
     Event of Default shall be continuing, Lessee shall have the right to renew
     this Lease for two additional periods of one year each commencing at the
     end of the Basic Term or the Fixed Renewal Term for a Basic Rent equal to
     the Fair Market Rental Value of the Aircraft for such period (any such
     renewal term, a "Fair Market Renewal Term"). Each such option

                                       60
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

     to renew shall be exercised by irrevocable notice from Lessee to Lessor
     delivered at least 120 days prior to the commencement of such Fair Market
     Renewal Term.

                 (3)  Waiver. If no written notice is delivered by Lessee to
                      ------
     Lessor pursuant to Section 19(a)(1) or 19(a)(2) on or before the day
     specified therefor, Lessee shall be deemed to have waived any right to
     renew this Lease.

                 (4)  Conditions Precedent; Payment of Basic Rent.  At the end
                      -------------------------------------------
     of the Basic Term or any Renewal Term, if Lessee has elected to renew this
     Lease as aforesaid, and provided that there shall not then have occurred
     and be continuing a Default or an Event of Default and that all necessary
     governmental authorizations and approvals shall have been received and that
     Basic Rent for the Renewal Term has already been determined as provided in
     Exhibit H, this Lease shall continue in full force and effect during the
     Renewal Term, except that (x) Lessee shall pay Lessor Basic Rent for the
     Aircraft during the Renewal Term in an amount equal in the case of the
     Fixed Renewal Term to the amount determined for each period during the
     Fixed Renewal Term as the "Fixed Renewal Rent" as set forth in Schedule H
     hereto and equal in the case of a Fair Market Renewal Term to the amount
     determined for each period during the Fair Market Renewal Term as the "Fair
     Market Rental Value" as set forth in Schedule H hereto, which Basic Rent
     shall be payable in semiannual installments in arrears (unless, in the case
     of the Fixed Renewal Term, any portion of Basic Rent during the last Lease
     Period during the Basic Term is payable in advance, in which case the same
     proportion of Basic Rent during the Fixed Renewal Term shall also be
     payable in advance), each such installment being due and payable on each
     Lease Period Date occurring during the Renewal Term, commencing with the
     Lease Period Date immediately following the commencement of the Renewal
     Term, and (y) the Stipulated Loss Value Schedule applicable during the
     Renewal Term shall be determined in accordance with the following
     provisions.

          The amounts which are payable during any Renewal Term in respect of
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.

          In determining Fair Market Sales Value for purposes of calculating
Stipulated Loss Value for any Renewal Term effect shall be given to the
encumbrance on the Aircraft of any Fixed Renewal Term available or in force.

          (b)  Purchase Options.  Lessee shall have the option, upon at least
               ----------------
120 days' prior irrevocable written notice to Lessor, to purchase the Aircraft:

                                       61
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

               (1)  on the last Business Day of the Basic Term for a purchase
     price equal to, at Lessee's option, either the Fair Market Sales Value of
     the Aircraft on such date or 48.65% of Lessor's Cost; and

               (2)  on the last Business Day of any Renewal Term for a purchase
     price equal to the Fair Market Sales Value of the Aircraft on such date.

Upon payment to Lessor in immediately available funds of the full amount of the
purchase price and payment of any other amounts then due hereunder (including,
without limitation, all Rent and all reasonable costs or expenses of Lessor in
connection with such purchase), Lessor will transfer to Lessee, without recourse
or warranty (except as to the absence of Lessor Liens (including for this
purpose Liens that would be Lessor Liens but for the proviso to the definition
of Lessor Liens)), all of Lessor's right, title and interest in and to the
Aircraft.

          (c)  Valuation. At any time not earlier than 365 days prior to the
               ---------
date on which Lessee may purchase the Aircraft pursuant to Section 9(b) or
Section 19(b) hereof or renew this Lease pursuant to Section 19(a)(1) or
19(a)(2) hereof, Lessee may deliver to Lessor a revocable notice of its intent
to exercise its renewal option or purchase option. For all purposes of this
Section 19, including the appraisal referred to in this Section 19(c), in
determining Fair Market Rental Value or Fair Market Sales Value, the Aircraft
shall be valued (i) as if in the condition and otherwise in compliance with the
terms of Section 5 upon a return of the Aircraft in the United States and as if
it had been maintained at all times as required in accordance with Section
7(a)(1) and Section 8, (ii) on the basis of the value which would obtain in an
arm's-length transaction between an informed and willing buyer-user or lessee
(other than a lessee or an Affiliate of a lessee currently in possession or a
used equipment scrap dealer) under no compulsion to buy or lease and an informed
and willing seller or lessor unaffiliated with such buyer-user or lessee and
under no compulsion to sell or lease and, taking into account the purchase and
renewal options of the Lessee provided in this Lease, and (iii) in the case of
such valuation for determining Fair Market Rental Value, assuming such lessee
would have substantially the same obligations during the Fair Market Renewal
Term as provided hereunder including without limitation the obligations of
Lessee to carry and maintain the insurance required by Section 11 hereof. Upon
receipt of such notice Lessor and Lessee shall confer in good faith with a view
to reaching agreement on the Fair Market Rental Value or Fair Market Sales Value
of the Aircraft. If the parties have not so agreed by 240 days prior to the end
of the Basic Term or the Renewal Term in question, then the question shall be
determined by an appraisal mutually agreed to by two recognized independent
aircraft appraisers, one of which appraisers shall be chosen by Lessor and one
by Lessee within five Business Days after Lessor or Lessee shall have received
written notice from the other party of a demand that such an appraisal be made,
which notice shall specify the appraiser chosen by the party giving the notice
or, if such appraisers cannot agree on the amount of such appraisal within
twenty Business Days after the end of such five-day period, each shall render
its own appraisal and shall by mutual consent

                                       62
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

choose another appraiser within five Business Days after the end of such twenty-
day period. If, within such five-day period, such two appraisers fail to appoint
a third appraiser, then either Lessor or Lessee, on behalf of both, may apply to
the American Arbitration Association (or any successor organization thereto) in
Chicago, Illinois for the appointment of such third appraiser. The decision of
the third appraiser so appointed shall be given within twenty Business Days
after the appointment of such third appraiser. As soon as the third appraiser
has delivered his appraisal, that appraisal shall be compared with the
appraisals given by the other two appraisers. If the determination of one
appraiser is more disparate from the average of all three determinations than
each of the other two determinations, then the determination of such appraiser
shall be excluded, the remaining two determinations shall be averaged and such
average shall be final and binding upon the parties hereto. If no determination
is more disparate from the average of all three determinations than each of the
other determinations, then such average shall be final and binding upon the
parties thereto. Lessee shall bear all expenses relating to such appraisal
procedure.

     SECTION 20.  Security for Lessor's Obligation to Holders of Certificates.
                  -----------------------------------------------------------
In order to secure the indebtedness evidenced by the Certificates, Lessor has
agreed in the Trust Indenture, among other things, to assign to the Indenture
Trustee this Lease, and to mortgage its interest in the Aircraft in favor of the
Indenture Trustee, subject to the reservations and conditions therein set forth.
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 counterpart,
which shall be identified as the counterpart containing the receipt therefor
executed by the Indenture Trustee as trustee under the Trust Indenture on the
signature page thereof. Lessee hereby accepts and consents to the assignment of
all Lessor's right, title and interest in and to this Lease pursuant to the
terms of the Trust Indenture. Lessee agrees to pay directly to the Indenture
Trustee (or, after receipt by Lessee of notice from the Indenture Trustee of the
discharge of the Trust Indenture, to Lessor), all amounts of Rent due or to
become due hereunder and assigned to the Indenture Trustee (it being
acknowledged by Lessee that all Excluded Payments have been excluded from such
assignment to the Indenture Trustee) and Lessee agrees that the Indenture
Trustee's right to such payments hereunder shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
the circumstances set forth in clauses (i) through (iv) of Section 18 hereof. In
the event the Indenture Trustee shall foreclose on the Lien of the Trust
Indenture and dispossess the Lessor of its right, title and interest in and to
this Lease, all references herein to the "Owner Participant" shall be deemed to
refer to the Indenture Trustee. Notwithstanding the foregoing assignment of this
Lease, the obligations of Lessor to Lessee to perform the terms and conditions
of this Lease shall remain in full force and effect. Lessee further acknowledges
that the Trust Indenture provides that so long as the Certificates are
outstanding the Lessor may not consent to any amendment, modification or waiver
to this Lease or any of the Operative Documents without the prior consent of the
Indenture Trustee (except as provided in Section 11.06 of the Trust Indenture
and except that such consent shall not be required if, prior to Lessor's consent
to such change, Lessor and

                                       63
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

the Indenture Trustee receive a statement in writing of Standard & Poor's
Corporation and Moody's Investors Service to the effect that, after giving
effect to the change consented to by Lessor, the Pass Through Certificates will
be rated not less than the rating thereof immediately prior to such change), and
Lessee agrees to provide to the Indenture Trustee a copy of all notices,
consents, certificates or other information provided hereunder to Lessor.

     SECTION 21.  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 other agreements contained herein, then (but in each
case, except in the case of failure to pay Rent or in the case of failure to
maintain insurance as required hereunder, no earlier than five Business Days
after written notice has been given by Lessor to Lessee, as to the occurrence of
such failure, whether or not it shall yet constitute an Event of Default
hereunder) Lessor may itself make such payment or perform or comply with such
agreement but shall not be obligated hereunder to do so, and the amount of such
payment and the amount of the reasonable expenses of Lessor incurred in
connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Past Due
Rate, shall be deemed Supplemental Rent, payable by Lessee to Lessor upon
demand. No such payment, performance or compliance shall be deemed to cure any
Event of Default or otherwise relieve Lessee of its obligations with respect
thereto unless, but without limiting the applicability of the preceding
sentence, the nature of such cure makes it impossible for Lessee to render
performance.

     SECTION 22. Investment of Security Funds; Liability of Lessor Limited. (a)
                 ---------------------------------------------------------
Investment of Security Funds. Any moneys held by Lessor as security hereunder
----------------------------
for future payments to Lessee shall, until paid to Lessee, be invested by Lessor
or, if the Trust Indenture shall not have been discharged, by the Indenture
Trustee as assignee of Lessor, as the case may be, as Lessee may from time to
time direct in writing (and in absence of a written direction by Lessee, there
shall be no obligation to invest such moneys) in (i) obligations of, or
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any State thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its equivalent
by Standard & Poor's Corporation, (iii) certificates of deposit issued by
commercial banks organized under the laws of the United States or of any
political subdivision thereof having a combined capital and surplus in excess of
$750,000,000 which banks or their holding companies have a rating of A or its
equivalent by Moody's Investors Service, Inc. or Standard & Poor's Corporation;
provided, however, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar denominated offshore certificates
of deposit issued by, or offshore time deposits with, any commercial bank
described in clause (iii) above or any subsidiary thereof and (v) repurchase
agreements with any financial institution having combined capital and surplus of
at least $750,000,000 with any of the obligations described in clause (i)
through (iv) above as collateral. Such investments shall mature no later than
one year from the date on which they were made. There shall be promptly remitted
to Lessee or its order (but no more frequently than

                                       64
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

monthly) any gain (including interest received) realized as a result of any such
investment (net of any fees, commissions and other expenses, if any, incurred in
connection with such investment) unless a Default or an Event of Default shall
have occurred and be continuing. If a Default or an Event of Default shall have
occurred and be continuing, Lessor or, if the Trust Indenture shall not have
been discharged, the Indenture Trustee as assignee of Lessor, shall hold any
such gain as security for the obligations of Lessee under this Lease and apply
it against such obligations as and when due. Lessee shall be responsible for any
net loss realized as a result of any such investment and shall reimburse Lessor
(or the Indenture Trustee, as the case may be) therefore on demand.

          (b)  Liability of Lessor Limited. It is expressly agreed and
               ---------------------------
understood that, except as expressly set forth herein and in the other Operative
Documents, all representations, warranties and undertakings of Lessor hereunder
shall be binding upon Lessor only in its capacity as Owner Trustee under the
Trust Agreement, and the institution acting as Lessor shall not be liable in its
individual capacity for any breach thereof except for its gross negligence or
willful misconduct or for breach of its covenants, representations and
warranties contained herein, to the extent covenanted or made in its individual
capacity.

     SECTION 23. 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. No term or provision of
this Lease may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by Lessor, Lessee and any assignee of Lessor's
rights hereunder. This Lease shall constitute an agreement of lease, and nothing
contained herein shall be construed as conveying to Lessee any right, title or
interest in the Aircraft except as a lessee only. Lessee agrees that Lessor is
the owner of the Aircraft for United States income tax purposes, and neither
Lessee nor any Affiliate of Lessee will file any tax returns in a manner
inconsistent with the foregoing (including Lessor's ownership interest in the
Aircraft). 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 ILLINOIS AND SHALL IN ALL RESPECTS
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF ILLINOIS INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
This Lease may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.

     SECTION 24. Certain Rights with Respect to the Japanese Lease. Lessor as
                 -------------------------------------------------
assignee, pursuant to the Japanese Lease Assignment, of all of Lessee's right,
title and interest in the

                                       65
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

Japanese Lease, the Primary Lessor Mortgage, the Primary Lessor Comfort Letter
and Sections 11 and 23(b) of the Omnibus Agreement, hereby covenants with Lessee
as follows: (i) Lessor shall, without any request or demand from Lessee,
exercise, in accordance with its terms, the end of term purchase option,
contained in Section 19 of the Japanese Lease, (ii) Lessor shall, upon the
written request of Lessee, exercise, in accordance with their respective terms,
any early termination purchase option contained in the Japanese Lease, (iii)
Lessor shall, upon the written request of Lessee, enforce against the Japanese
Lessor or Sanwa Business Finance Co., Ltd., as the case may be, any covenant
made by such entity in the aforesaid documents and (iv) unless an Event of
Default has occurred and is continuing, Lessor shall not exercise, except upon
the written request of Lessee as aforesaid, any early termination option
contained in the Japanese Lease.

     SECTION 25. Certain Rights with Respect to the Relevant Documents. Neither
                 -----------------------------------------------------
Lessor nor Lessee shall amend any Relevant Document without the prior written
consent of the other party hereto.

     SECTION 26. Bankruptcy. Lessee hereby acknowledges that Lessor, the Owner
                 ----------
Participant and the Indenture Trustee are entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to the Aircraft and that this Lease is
a "lease" within the meaning of said Section 1110. Lessee agrees not to take any
position in connection with any bankruptcy proceedings involving it that is
inconsistent with a lessor's rights under Section 1110 of the Bankruptcy Code or
any comparable or successor provision affording protection to lessors of
aircraft.

     SECTION 27. Effectiveness. As of the Effective Date, this Agreement shall
                 -------------
amend and restate the Original Lease in its entirety, and the Original Lease,
except as expressly provided herein, shall be superseded in its entirety by this
Agreement.

                              *        *        *

                                       66
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

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

                               STATE STREET BANK AND TRUST
                               COMPANY, not in its individual capacity except as
                               expressly stated herein, but solely as Owner
                               Trustee, Lessor

                               By:____________________________________
                               Name:__________________________________
                               Title:_________________________________

                               UNITED AIR LINES, INC.,
                               Lessee

                               By:____________________________________
                               Name:__________________________________
                               Title:_________________________________

                                       67
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

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

                               STATE STREET BANK AND TRUST
                               COMPANY, not in its individual capacity except as
                               expressly stated herein, but solely as Owner
                               Trustee, Lessor

                               By:______________________________
                               Name:____________________________
                               Title:___________________________

                               UNITED AIR LINES, INC.,
                               Lessee

                               By:______________________________
                               Name:____________________________
                               Title:___________________________

     /1/ Receipt of this original counterpart of the foregoing Amended and
Restated Lease Agreement is hereby acknowledged on this day __ of _____________,
2000.

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

                                                By:_____________________________
                                                    Vice President

_________________

     /1/   This language contained in the original counterpart only.

                                       68
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT A
                                                                           to
                                                                 Lease Agreement

                 LEASE SUPPLEMENT (1989 I) NO. ________

     LEASE SUPPLEMENT (1989 I) NO. _______ , dated _____________ between STATE
STREET BANK AND TRUST COMPANY, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement (1989 I) dated as of July 20, 2000
between Owner Trustee and the Owner Participant referred to therein (such Owner
Trustee, in its capacity as such Owner Trustee being herein called "Lessor"), as
Lessor, and UNITED AIR LINES, INC., as lessee ("Lessee").

     Lessor and Lessee have heretofore entered into that certain Lease Agreement
(1989 I) dated as of August 1, 1989 (the "Initial Lease"), as supplemented by
that certain Lease Supplement (1989 I) No. 1 dated as of August 16, 1989, as
amended by that certain First Amendment to Lease Agreement (1989 I) dated as of
February 1, 1990, all as amended and restated by that certain Amended and
Restated Lease Agreement (1989 I), dated as of July 20, 2000, relating to one
Boeing 747-422 aircraft (herein called the "Lease" and the defined terms therein
being hereinafter used with the same meanings). The Lease provides for the
execution and delivery from time to time of Lease Supplements for the purpose of
leasing the Airframe and Engines under the Lease as and when delivered by Lessor
to Lessee in accordance with the terms thereof.

     /1/ The Lease relates to the Airframe and Engines described below, and a
counterpart of the Lease is attached hereto, and made a part hereof, and this
Lease Supplement together with such attachment, is being filed for recordation
on the date hereof with the Federal Aviation Administration as one document.

     /2/ The Lease relates to the Airframe and Engines described below, and a
counterpart of the Lease has been recorded by the Federal Aviation
Administration on ___________, 2000, as one document and assigned Conveyance
No. _____________.

     NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:

     1.   Original Lessor hereby confirms that it has delivered and leased to
Lessee under the Lease on August 16, 1989, as evidenced by the Original Lease
Supplement, and Lessee

________________

     /1/   This language for Lease Supplement No. 1.

     /2/   This language for other Lease Supplements.
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

hereby confirms that it has accepted and leased from Lessor under the Lease on
August 16, 1989, as evidenced by the Original Lease Supplement, and Lessor
hereby leases to Lessee under the Lease as of the Effective Date and Lessee
hereby leases from Lessor under the Lease as of the Effective Date the following
described Boeing 747-422 aircraft (the "Aircraft"), which Aircraft as of the
date hereof consists of the following components:

                    (i)   Airframe: FAA Registration No. N171UA; manufacturer's
serial no. 24322; and

                    (ii)  Engines: four (4) United Technologies Corporation,
Pratt & Whitney Group, Model PW4056 engines bearing, respectively,
manufacturer's serial nos. P717550, P717551, P717552 and P717573 (each of which
engines has 750 or more rated takeoff horsepower or the equivalent of such
horsepower).

               2.   The Delivery Date of the Aircraft is August 16, 1989. The
Effective Date of the Lease is July 20, 2000. Except as otherwise provided in
the Lease, the Term for the Aircraft shall commence on the Delivery Date and end
on February 15, 2015.

               3.   Lessee hereby confirms its agreement to pay Lessor Basic
Rent for the Aircraft throughout the Term therefor in accordance with Section 3
of the Lease.

               4.   Lessee hereby confirms to Lessor that Lessee has accepted
the Aircraft for all purposes hereof and of the Lease as being airworthy, in
good working order and repair and without defect or inherent vice in title,
condition, design, operation or fitness for use; provided, however, that nothing
contained herein or in the Lease shall in any way diminish or otherwise affect
any right Lessee or Lessor may have with respect to the Aircraft against The
Boeing Company, any affiliate thereof, or any subcontractor or supplier of The
Boeing Company, or any affiliate thereof, under the Purchase Agreement or
otherwise.

               5.   All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.

               6.   This Lease Supplement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.

                                  *    *    *

                                      A-2
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          IN WITNESS WHEREOF, Original Lessor, Lessor and Lessee have caused
this Lease Supplement to be duly executed on the day and year first above
written.

                                                  BANCBOSTON UNITED LEASING LLC,
                                                   Original Lessor

                                                  By:___________________________
                                                  Name:_________________________
                                                  Title:________________________

                                                  STATE STREET BANK AND TRUST
                                                  COMPANY, not in its
                                                  individual capacity, but
                                                  solely as Owner Trustee,
                                                  Lessor

                                                  By:___________________________
                                                  Name:_________________________
                                                  Title:________________________

                                                  UNITED AIR LINES, INC.,
                                                  Lessee

                                                  By:___________________________
                                                  Name:_________________________
                                                  Title:________________________

                                      A-3
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

          /3/  Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this _______ day of _______________.

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

                                                By______________________________
                                                Name:___________________________
                                                Title:__________________________

_____________________

    /3/  This language contained in the original counterpart only.

                                      A-4
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT B
                                                                           to
                                            Amended and Restated Lease Agreement

              BASIC RENT, INTERIM RENT AND EXCESS AMOUNT SCHEDULE
              ---------------------------------------------------

     EXHIBIT B TO THE FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I)
             HAS BEEN INTENTIONALLY OMITTED FROM THE FIRST AMENDED
          AND RESTATED LEASE AGREEMENT (1989 I) ON FILE WITH THE FAA
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                     EXHIBIT B-1
                                                                          to
                                            Amended and Restated Lease Agreement

                           RENT ALLOCATION SCHEDULE
                           ------------------------

    EXHIBIT B-1 TO THE FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I)
             HAS BEEN INTENTIONALLY OMITTED FROM THE FIRST AMENDED
          AND RESTATED LEASE AGREEMENT (1989 I) ON FILE WITH THE FAA

                                      B-2
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT C
                                                                           to
                                            Amended and Restated Lease Agreement

                        STIPULATED LOSS VALUE SCHEDULE
                        ------------------------------

     EXHIBIT C TO THE FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I)
             HAS BEEN INTENTIONALLY OMITTED FROM THE FIRST AMENDED
          AND RESTATED LEASE AGREEMENT (1989 I) ON FILE WITH THE FAA

<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT D
                                                                           to
                                            Amended and Restated Lease Agreement

                          TERMINATION VALUE SCHEDULE
                          --------------------------

     EXHIBIT D TO THE FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I)
             HAS BEEN INTENTIONALLY OMITTED FROM THE FIRST AMENDED
          AND RESTATED LEASE AGREEMENT (1989 I) ON FILE WITH THE FAA
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT E
                                                                           to
                                            Amended and Restated Lease Agreement

                            RENT RECALCULATION AND
                         INDEMNIFICATION VERIFICATION
                         ----------------------------

               Any recalculation of Basic Rent, Excess Amount, Stipulated Loss
Value percentages and Termination Value percentages pursuant to the Lease and
any calculation of any payment to Owner Participant or Lessee under the Tax
Indemnity Agreement or Section 7(b) of the Participation Agreement shall be
determined by Owner Participant so as to maintain Net Economic Return, computed
on the basis of the same methodology and assumptions used by Original Lessor in
determining the Basic Rent, Excess Amount, Stipulated Loss Value percentages,
and Termination Value percentages as of the Delivery Date except as such
assumptions have been modified pursuant to Section 3 of the Lease; provided,
however, Lessee may request any financial advisor to Lessee to verify such
calculations but without any requirement that Owner Participant disclose to such
advisor such methodology and assumptions and (B) if Lessee believes that such
calculations by Owner Participant are in error then a nationally recognized firm
of accountants selected by Owner Participant and reasonably acceptable to Lessee
(which may be Owner Participant's independent public accountants) shall be
permitted to verify such calculations and Owner Participant will make available
to such firm (subject to the execution by such firm of a confidentiality
agreement reasonably acceptable to Owner Participant) such methodology and
assumptions and any changes made therein pursuant to Section 3 of the Lease and
any other information reasonably necessary for such verification requested by
such firm. In the event of a verification under clause (B) of this Exhibit E the
determination by such firm of accountants shall be final. Lessee will pay the
reasonable costs and expenses of the verification under clause (B) of this
Exhibit E; provided, however, if as a result of such verification process the
Basic Rent is adjusted and such adjustment causes the Net Present Value of Rents
to decline by 10 or more basis points or there is a material error in the
computation of the indemnity payment in Lessor's original statement in Owner
Participant's favor, Owner Participant shall pay the reasonable costs and
expenses of such verification process. Such recalculated Basic Rent, Excess
Amount, Stipulated Loss Value percentages, and Termination Value percentages
shall be set forth in an amendment to the Lease.
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT F
                                                                          to
                                            Amended and Restated Lease Agreement

                       SCHEDULE OF COUNTRIES AUTHORIZED
                     FOR DOMICILE OF PERMITTED SUBLESSEES
                     ------------------------------------

                    Australia                    Japan

                    Austria                      Luxembourg

                    Bahamas                      Malaysia

                    Belgium                      Malta

                    Brazil                       Mexico

                    Canada                       Netherlands

                    Denmark                      New Zealand

                    Germany                      Norway

                    Finland                      Peoples Republic of
                                                   China
                    Greece
                                                 Philippines
                    Grenada
                                                 Portugal
                    Iceland
                                                 Republic of China (Taiwan)
                    India
                                                 Singapore
                    Indonesia
                                                 South Korea
                    Ireland
                                                 Spain
                    Italy
                                                 Sweden
                    Jamaica
                                                 Switzerland
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

               Thailand

               Trinidad and Tobago

               Turkey

               United Kingdom

               Venezuela

                                      F-2
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT G
                                                                          to
                                            Amended and Restated Lease Agreement

                       SCHEDULE OF COUNTRIES AUTHORIZED
                           FOR AIRCRAFT REGISTRATION
                           -------------------------

               Australia                          Japan

               Austria                            Luxembourg

               Bahamas                            Malaysia

               Belgium                            Malta

               Brazil                             Mexico

               Canada                             Netherlands

               Denmark                            New Zealand

               Germany                            Norway

               Finland                            Peoples Republic of
                                                    China
               France
                                                  Philippines
               Greece
                                                  Portugal
               Grenada
                                                  Republic of China (Taiwan)
               Iceland
                                                  Singapore
               India
                                                  South Korea
               Indonesia
                                                  Spain
               Ireland
                                                  Sweden
               Italy
                                                  Switzerland
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

               Thailand

               Trinidad and Tobago

               Turkey

               United Kingdom

                                      G-2
<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT H
                                                                              to
                                            Amended and Restated Lease Agreement

     EXHIBIT H TO THE FIRST AMENDED AND RESTATED LEASE AGREEMENT (1989 I)
             HAS BEEN INTENTIONALLY OMITTED FROM THE FIRST AMENDED
          AND RESTATED LEASE AGREEMENT (1989 I) ON FILE WITH THE FAA

<PAGE>

                           [First Amended and Restated Lease Agreement (1989 I)]

                                                                       EXHIBIT H
                                                                           to
                                            Amended and Restated Lease Agreement

                        SCHEDULE OF FIXED RENEWAL RENT
                         AND FAIR MARKET RENTAL VALUE
                         ----------------------------

         The "Fixed Renewal Rent" shall be (i) for the first year of any such
Fixed Renewal Term, an amount equal to $xxx,xxx.00, and (ii) for any subsequent
period under any Fixed Renewal Term an amount equal to $xxx,xxx.00, payable (in
each case) semiannually in arrears provided, however, if prior to the
                                   --------  -------
commencement of the first Fixed Rate Renewal Term, Lessee and Owner Participant
shall have received an opinion of Thelen, Reid & Priest LLP, or of other
independent counsel of national recognition selected by the Owner Participant
and reasonably acceptable to the Lessee (which the Owner Participant agrees to
seek at the request and expense of the Lessee) to the effect that the
elimination of such premium in clause (i) over clause (ii) will not result in
such renewal term being includable in the "lease term", as defined in Treasury
Regulation ss.1.467-1(h)(6), or any successor thereto, in a manner that
adversely affects the Net Economic Return, then the "Fixed Renewal Rent" for any
Fixed Renewal Term shall be the amount set forth in clause (ii) of this
paragraph.

         The "Fair Market Rental Value" during the Fair Market Renewal Term
shall be determined in accordance with Section 19(c), provided, however, that
(i) unless such Fair Market Renewal Term follows a Fixed Renewal Term, for the
first year of any such Fair Market Renewal Term, such rental amount shall equal
an amount equal to 105% of the Fair Market Rental Value as determined in
accordance with Section 19(c), and (ii) for any other Fair Market Renewal Term
such rental amount shall be an amount equal to the Fair Market Rental Value
determined in accordance with Section 19(c), payable (in each case) semiannually
in arrears provided, however, if prior to the commencement of the such Fair
           --------  -------
Market Renewal Term, Lessee and Owner Participant shall have received an opinion
of Thelen, Reid & Priest LLP, or of other independent counsel of national
recognition selected by the Owner Participant and reasonably acceptable to the
Lessee (which the Owner Participant agrees to seek at the request and expense of
the Lessee) to the effect that the elimination of such premium will not result
in such renewal term being includable in the "lease term", as defined in
Treasury Regulation ss.1.467-1(h)(6), or any successor thereto, in a manner that
adversely affects the Net Economic Return, such 5% premium above Fair Market
Rental Value shall not be included in the first Fair Market Renewal Term
hereunder.

                                      H-1<PAGE>

                                                                               *

                                Aircraft N171UA

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

                          FIRST AMENDED AND RESTATED
                    TRUST INDENTURE AND SECURITY AGREEMENT

                                   (1989 I)

                           Dated as of July 20, 2000

                                    between

                    STATE STREET BANK AND TRUST COMPANY,
         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 Indenture Trustee

                        -------------------------------

                            United Air Lines, Inc.
                            1989 I Equipment Trust
                          One Boeing 747-422 Aircraft

                        -------------------------------

================================================================================
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                                                                  Page
<S>                                                                                                                <C>
RECITALS........................................................................................................    1

GRANTING CLAUSE.................................................................................................    2

HABENDUM CLAUSE.................................................................................................    6

ARTICLE 1
         DEFINITIONS............................................................................................    8
         Section 1.01.   Definitions............................................................................    8

ARTICLE 2
         THE EQUIPMENT NOTES....................................................................................   22
         Section 2.01.   Equipment Notes; Title and Terms.......................................................   22
         Section 2.02.   Execution and Authentication...........................................................   24
         Section 2.03.   Registrar and Paying Agent.............................................................   25
         Section 2.04.   Transfer and Exchange..................................................................   25
         Section 2.05.   Noteholder Lists; Ownership of Equipment Notes.........................................   26
         Section 2.06.   Mutilated, Destroyed, Lost or Stolen Equipment Notes...................................   27
         Section 2.07.   Cancellation...........................................................................   27
         Section 2.08.   Payment on Equipment Notes.............................................................   27
         Section 2.09.   Payment from Indenture Estate Only; Non-Recourse Obligations...........................   28
         Section 2.10.   Subordination..........................................................................   29
         Section 2.11.   Termination of Interest in the Indenture Estate........................................   29
         Section 2.12.   Withholding Taxes......................................................................   30

ARTICLE 3
         RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE.................................   31
         Section 3.01.   [Reserved for Potential Future Use]....................................................   31
         Section 3.02.   Payment in Case of Redemption or Purchase of Equipment Notes...........................   31
         Section 3.03.   Application of Basic Rent..............................................................   32
         Section 3.04.   Application of Certain Payments in Case of Requisition or Event of Loss................   34
         Section 3.05.   Payments During Continuance of Indenture Event of Default..............................   35
         Section 3.06.   Payments for Which Application Is Provided in Other Documents..........................   38
         Section 3.07.   Payments for Which No Application Is Otherwise Provided................................   39
         Section 3.08.   Application of Payments................................................................   39

ARTICLE 4
         COVENANTS OF OWNER TRUSTEE.............................................................................   40
         Section 4.01.   Covenants of the Owner Trustee.........................................................   40
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                                <C>
ARTICLE 5
         DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING
         CONTINUATION OF LEASE...................................................................................  41
         Section 5.01.   Disposition, Substitution and Release of Property Included in the Indenture Estate
                         During Continuation of Lease............................................................  41

ARTICLE 6
         REDEMPTION OF EQUIPMENT NOTES...........................................................................  42
         Section 6.01.   Redemption of Equipment Notes upon Certain Events.......................................  42
         Section 6.02.   Redemption Price........................................................................  43
         Section 6.03.   Notice of Redemption to Noteholders.....................................................  44
         Section 6.04.   Deposit of Redemption Price.............................................................  44
         Section 6.05.   Equipment Notes Payable on Redemption Date..............................................  45
         Section 6.06.   No Prepayment or Redemption.............................................................  45

ARTICLE 7
         MATTERS CONCERNING THE LESSEE...........................................................................  45
         Section 7.01.   Repayment of Monies for Equipment Note Payments Held by the Indenture Trustee...........  45
         Section 7.02.   Change in Registration..................................................................  46
         Section 7.03.   Assumption of Obligations of Owner Trustee by the Lessee................................  47
         Section 7.04.   Selection of Funding Period.............................................................  49

ARTICLE 8
         DEFAULTS AND REMEDIES...................................................................................  50
         Section 8.01.   Indenture Events of Default.............................................................  50
         Section 8.02.   Acceleration; Rescission and Annulment..................................................  53
         Section 8.03.   Other Remedies Available to Indenture Trustee...........................................  53
         Section 8.04.   Waiver of Owner Trustee.................................................................  59
         Section 8.05.   Waiver of Existing Defaults.............................................................  60
         Section 8.06.   Control by Majority.....................................................................  60
         Section 8.07.   Rights of Noteholders to Receive Payment................................................  61
         Section 8.08.   Indenture Trustee May File Proofs of Claim..............................................  61

ARTICLE 9
         INDENTURE TRUSTEE.......................................................................................  61
         Section 9.01.   Duties of Indenture Trustee.............................................................  61
         Section 9.02.   Rights of Indenture Trustee.............................................................  61
         Section 9.03.   Individual Rights of Indenture Trustee..................................................  62
         Section 9.05.   Notice of Defaults......................................................................  63
         Section 9.06.   Compensation and Indemnity..............................................................  64
         Section 9.07.   Replacement of Indenture Trustee........................................................  64
</TABLE>

                                      ii

<PAGE>

<TABLE>
        <S>                                                                                                        <C>

         Section 9.08    Successor Indenture Trustee Agents by Merger, etc.......................................   66
         Section 9.09.   Eligibility; Disqualification...........................................................   66
         Section 9.10.   Trustee's Liens.........................................................................   66

ARTICLE 10
         TERMINATION OF TRUST INDENTURE..........................................................................   67
         Section 10.01.  Termination of Indenture................................................................   67
         Section 10.02.  Survival of Certain Obligations.........................................................   68
         Section 10.03.  Monies to Be Held in Trust..............................................................   68
         Section 10.04.  Monies to Be Returned to Owner Trustee..................................................   68

ARTICLE 11
         AMENDMENTS AND WAIVERS..................................................................................   69
         Section 11.01.  Amendments to this Agreement Without Consent of Noteholders.............................   69
         Section 11.02.  Amendments to this Agreement with Consent of Noteholders................................   70
         Section 11.03.  Revocation and Effect of Consents.......................................................   72
         Section 11.04.  Notation on or Exchange of Equipment Notes..............................................   72
         Section 11.05.  Indenture Trustee Protected.............................................................   72
         Section 11.06.  Amendments, Waivers, etc. of Other Operative Documents..................................   72
         Section 11.07.  Notices to Liquidity Providers..........................................................   75

ARTICLE 12
         MISCELLANEOUS...........................................................................................   76
         Section 12.01.  Notices.................................................................................   76
         Section 12.02.  GOVERNING LAW...........................................................................   77
         Section 12.03.  No Recourse Against Others..............................................................   77
         Section 12.04.  Execution in Counterparts...............................................................   78
         Section 12.05.  Section 1110............................................................................   78
         Section 12.06.  Effectiveness...........................................................................   78

SIGNATURES.......................................................................................................   78
</TABLE>

Exhibit A-1     Form of Existing Equipment Notes
Exhibit A-2     Form of Pass Through Equipment Notes
Exhibit B       Form of Trust Agreement and Trust Indenture
                  and Security Agreement Supplement

Annex I
Annex II

                                      iii
<PAGE>

                          FIRST AMENDED AND RESTATED
                    TRUST INDENTURE AND SECURITY AGREEMENT
                                   (1989 I)

                  This FIRST AMENDED AND RESTATED TRUST INDENTURE AND SECURITY
AGREEMENT (1989 I) (this "Agreement"), dated as of July 20, 2000 between STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company (the "Owner
Trustee"), not in its individual capacity except as expressly provided herein,
but solely as Owner Trustee under the Trust Agreement, and STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association (the "Indenture Trustee"), as Indenture Trustee hereunder, amends
and restates in its entirety that certain Trust Indenture and Security Agreement
(1989 I) dated as of August 1, 1989 (the "Initial Indenture") between BancBoston
United Leasing LLC ("Original Lessor"), United Air Lines, Inc., as Lessee, and
State Street Bank and Trust Company of Connecticut, National Association, as
Successor Trustee to The Connecticut Bank and Trust Company, National
Association, as Indenture Trustee ("Original Indenture Trustee"), as
supplemented by that certain Trust Agreement and Trust Indenture and Security
Agreement Supplement No. 1 (1989 I) dated August 16, 1989 (the "Supplement") and
as amended by that certain First Amendment to Trust Indenture and Security
Agreement (1989 I) dated as of February 1, 1990 (the "First Amendment"), between
Original Lessor, Lessee and Original Indenture Trustee. The Initial Indenture,
as supplemented by the Supplement and as amended by the First Amendment and
further documents described in the attached Annex I and Annex II, is referred to
as the "Original Indenture."

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

                  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 Noteholders of the Equipment Notes issued hereunder, and (ii)
the Owner Trustee has been authorized and directed pursuant to the Trust
Agreement to execute and deliver this Amended and Restated Trust Indenture and
Security Agreement;

                  WHEREAS, all capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth or referred to in Article 1
hereof;

                  WHEREAS, the Initial Indenture and the Supplement were
recorded by the FAA on August 17, 1989 and assigned Conveyance No. Q40443;

                  WHEREAS, the First Amendment was recorded by the FAA on
February 16, 1990 and assigned Conveyance No. M22314;
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  WHEREAS, pursuant to that certain Assignment and Assumption
Agreement (1989 I) dated as of July 20, 2000 between the Owner Trustee and the
Original Lessor, the Original Lessor assigned to the Owner Trustee, and the
Owner Trustee assumed, all of the obligations of the Original Lessor under the
Lessor Documents, all as more specifically set forth in the Assignment and
Assumption Agreement;

                  WHEREAS, the parties desire by this Agreement, among other
things, to (i) amend and restate in its entirety the Original Indenture, (ii)
provide for the issuance by the Owner Trustee on the Refinancing Date of the
Series A-1, Series B and Series C-2 Pass Through Equipment Notes and (iii)
provide for the assignment, mortgage and pledge by the Owner Trustee to the
Indenture 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
Indenture Trustee, for the ratable benefit and security of the Noteholders,
subject to Section 2.10 and Article 3 hereof;

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

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

                                GRANTING CLAUSE

                  NOW, THEREFORE, THIS AMENDED AND RESTATED TRUST INDENTURE AND
SECURITY AGREEMENT WITNESSETH, subject to Section 2.11(b) hereof, that, to
secure the prompt payment by the Owner Trustee, as and when required hereunder
or under the Equipment Notes, of the principal of, Make-Whole Amount (on and
after the Refinancing Date only), if any, premium (prior to the Refinancing Date
only), if any, and interest on, and all other amounts due with respect to, all
Equipment Notes from time to time outstanding under this Indenture and all other
amounts due hereunder and to secure 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 (other than, on and after
the Refinancing Date, the Note Purchase Agreement), for the benefit of the
Noteholders and each of the Indenture Indemnitees, and the prompt payment of any
and all amounts from time to time owing hereunder, under the Lease and under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Noteholders and the Indenture Indemnitees, and for the uses and
purposes and subject to the terms and provisions hereof, and in consideration of
the

                                       2
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

premises and of the covenants herein contained, and of the acceptance of the
Equipment Notes by the Noteholders, and of other good and valuable consideration
the receipt and adequacy whereof are 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 Indenture 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 first
priority 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 whether now or hereafter acquired and subject to the Lien hereof
(which collectively, including all property hereafter specifically subjected to
the lien of this Agreement by any instrument supplemental hereto, but excluding
the Excluded Payments, are herein called the "Indenture Estate"):

                  (1) the Aircraft (including the Airframe and the Engines
         originally installed thereon), and all replacements thereof and
         substitutions therefor in which the Lessor shall from time to time
         acquire an interest, whether under the Lease or the Japanese Lease or
         both or any such replacements or substitutions therefor, as provided in
         this Agreement;

                  (2) the Lease,  the Original Lease (as more fully described in
         Annex I  hereto)  and all  Rent,  including,  without  limitation,  all
         amounts of Basic Rent, Supplemental Rent, and payments of any kind
         thereunder; the Participation Agreement (including all amounts payable
         to the Lessor thereunder); the Assignment and Assumption Agreement; the
         Japanese Lease; the Japanese Lease Supplement; the Purchase Agreement;
         the Lessor's Purchase Agreement; the Lessor's Consent and Agreement;
         the Primary Lessor Mortgage, the Primary Lessor's Comfort Letter, the
         Omnibus Agreement, and the Japanese Assumption Agreement (each to the
         extent assigned by the Japanese Lease Assignment); the Japanese Lease
         Assignment; the Japanese Lease Assignment Supplement; all other
         documents and property and interest therein assigned by the Japanese
         Lease Assignment; each notice, letter agreement or other document
         related to any of the foregoing entered into by or for the benefit of
         the Owner Trustee (or assigned to the Owner Trustee); including,
         without limitation, (x) all rights of the Lessor 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 Lessor, 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 or any default under the Japanese
         Lease, and (y) any right to restitution from the Lessee or the Primary
         Lessor in respect of any determination of invalidity of any such
         document;

                                       3
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (3) all rents, issues, profits, revenues and other income of
         the property subjected or required to be subjected to the lien of this
         Agreement;

                  (4) all requisition proceeds with respect to the Aircraft or
         any part thereof (to the extent of the Lessor's interest therein
         pursuant to the terms of the Lease) and all insurance proceeds with
         respect to the Aircraft or any part thereof, but excluding any
         insurance maintained by the Lessee, Owner Participant or Owner Trustee
         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 Indenture
         Trustee by or for the account of the Lessor pursuant to any term of any
         Operative Document and held or required to be held by the Indenture
         Trustee hereunder and all rights of the Lessor in and to the Deposited
         Cash and all investment income thereon;

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

                  (7) all proceeds of the foregoing.

         The Original Lessor has previously delivered to the Indenture Trustee
the original executed counterpart of the Original Lease and the initial Lease
Supplement, the First Amendment to Lease, as well as the Japanese Assumption
Agreement, the Japanese Lease, the Japanese Lease Supplement, the Japanese Lease
Assignment and the Japanese Lease Assignment Supplement, and, concurrently with
the delivery hereof, Owner Trustee is delivering the original counterpart of the
Lease (to each of which a chattel paper receipt is attached), and the Original
Lessor has previously delivered to the Indenture Trustee executed copies of the
Lessor's Purchase Agreement and the Lessor's Consent and Agreement.

                  Notwithstanding the foregoing provisions:

                  (a) there shall be excluded from the security interest
         granted by this Agreement all Excluded Payments;

                  (b) (i) whether or not a Lease Event of Default or an
         Indenture 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 Indenture Trustee but subject always to the
         provisions of the next succeeding full paragraph (a) to Excluded
         Payments and to commence an action at law to obtain such Excluded
         Payments, (b) to exercise any election or option or to make any
         decision or determination, or to give or receive any

                                       4
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         notice, consent, waiver or approval, or to take any other action in
         respect of, but in each case only to the extent relating to, Excluded
         Payments, (c) to exercise all rights with respect to insurance
         maintained for its own account which Section 11(e) of the Lease
         specifically confers on the "Lessor" and (d) to exercise, to the extent
         necessary to enable it to exercise its rights under Section 8.03(e)(i)
         hereof, the rights of the "Lessor" under Section 21 of the Lease;

                  (ii) whether or not a Lease Event of Default or Indenture
         Event of Default shall occur and be continuing, the Owner Trustee and
         the Indenture Trustee shall each have the right separately but not to
         the exclusion of the other, (a) 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" pursuant to the Lease or to the
         Owner Trustee pursuant to any other Operative Document, (b) to exercise
         inspection rights pursuant to Section 12 of the Lease, (c) to maintain
         separate insurance pursuant to Section 11(e) of the Lease and to retain
         all rights with respect to such insurance maintained for its own
         account, (d) to give any notice of default under Section 14 of the
         Lease, (e) to cause the Lessee to take any action and execute and
         deliver such documents and assurances as the "Lessor" may from time to
         time reasonably request pursuant to Section 16 of the Lease and (f) to
         consent (with the concurrent consent of the other such party to the
         extent such consent is required) to changes to the list of countries on
         Exhibit F or G to the Lease;

                  (iii) so long as no Indenture Event of Default shall have
         occurred and be continuing (but subject to the provisions of Section
         11.06), the Owner Trustee shall retain the right to exercise the
         following rights of the "Lessor" under the Lease: (a) to the exclusion
         of the Indenture Trustee, the right to (i) exercise all rights of the
         "Lessor" under the Lease (other than the right to receive any funds to
         be paid to the Lessor under the Lease (other than funds that constitute
         Excepted Payments)) and (ii) 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; (b) to the exclusion of the Indenture Trustee, the right to
         waive the opinion required pursuant to Section 8(e)(ii)(C) of the
         Participation Agreement; and (c) the non-exclusive right to exercise
         the rights of the "Lessor" to terminate the Japanese Lease Assignment
         and to exercise the purchase right thereunder;

                  (iv) so long as the Indenture Trustee shall not have
         foreclosed the Lien of this Indenture, the Owner Trustee and the Owner
         Participant shall retain the right, to the exclusion of the Indenture
         Trustee, (a) to adjust Basic Rent and the percentages relating to
         Stipulated Loss Value and Termination Value, and Excess Amount as
         provided in Section 3(c) of the Lease, (b) to retain the rights of the
         "Lessor" with respect to solicitations of bids, and the election to
         retain the Aircraft pursuant to Section 9 of the

                                       5
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         Lease, (c) to retain the rights of the "Lessor" under Section 7(b) of
         the Lease and (d) to exercise the right of "Lessor" to determine the
         fair market rental value or fair market sales value pursuant to Section
         19 of the Lease;

                  (c) the leasehold interest granted to the Lessee by the Lease
         shall not be subject to the security interest granted by this
         Agreement, and nothing in this Agreement 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 Indenture Trustee,
         nothing contained in this Granting Clause shall prevent the Owner
         Trustee, as the "Lessor" under the Lease, 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 and from maintaining separate insurance with respect to the
         Aircraft to the extent permitted by Section 11 of the Lease.

                  Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, subject to Section 8.03 hereof, to the
exclusion of the Owner Trustee and the Owner Participant, to declare the Lease
to be in default under Section 15 thereof and to exercise the remedies set forth
in Section 15 of the Lease at any time that a Lease Event of Default shall have
occurred and be continuing.

                                HABENDUM CLAUSE

                  TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the benefit
and security of the Indenture Trustee and the Noteholders from time to time,
without any preference, priority or distinction of any one Equipment Note over
any other by reason of series, priority of time of issue, sale or negotiation,
date of maturity or otherwise for any reason whatsoever, except, on and after
the Refinancing Date only, as provided in Section 2.10 and Article 3, and for
the uses and purposes and subject to the terms and provisions set forth in this
Agreement.

                  1.  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 its
obligations thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Indenture 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 Indenture Trustee (except as to the Indenture Trustee, if the
Indenture Trustee shall have become the "Lessor" under the Lease) or the
Noteholders be required or obligated in any manner to perform or fulfill any
obligations of the Owner Trustee under any of the Operative Documents to which
the Owner

                                       6
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Trustee is a party, or, except as herein 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.

                 2.  The Owner Trustee does hereby constitute the Indenture
Trustee the true and lawful attorney of the Owner Trustee, irrevocably, for good
and valuable consideration and coupled with an interest and with full power of
substitution, with full power (in the name of the Owner Trustee or otherwise)
subject to the terms and conditions of this Indenture, to ask, require, demand,
receive, sue for, compound and give acquittance for any and all moneys and
claims for moneys due and to become due to the Owner Trustee (other than
Excluded Payments) under or arising out of the Lease (subject to Section
11.06(b)(1) hereof), the Purchase Agreement, the Lessor's Bill of Sale and the
Lessor's Consent and Agreement, the Lessor's Purchase Agreement, and all other
Operative Documents 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 Indenture Trustee may deem to be necessary or advisable in
the premises as fully as the Owner Trustee itself could do. The Owner Trustee
has directed the Lessee to make all payments of Rent (other than Excluded
Payments) 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, or as directed by, the Indenture Trustee at such address as
the Indenture Trustee shall specify, for application as provided in this
Agreement. The Owner Trustee agrees that promptly on receipt thereof, it will
transfer to the Indenture Trustee any and all moneys from time to time received
by it constituting part of the Indenture Estate, for distribution by the
Indenture Trustee pursuant to this Agreement, except that the Owner Trustee
shall accept for distribution pursuant to the Trust Agreement any amounts
distributed to it by the Indenture Trustee as expressly provided in this
Agreement and any Excluded Payments.

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

                 4.  The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that it will not assign or
pledge, so long as the Lien granted hereunder has not been discharged in
accordance with the terms hereof, any of its rights, titles or interests hereby
assigned, to any Person other than the Indenture Trustee, and that it will not,
except as provided in or permitted by this Agreement, accept any payment under
any agreement subject to the Lien hereof, enter into an agreement amending or
supplementing any of the Operative Documents, execute any waiver or modification
of, or consent under the terms of any of the Operative Documents, settle or
compromise any claim (other than claims in respect of

                                       7
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Excluded Payments) 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 arbitration
thereunder.

         It is hereby further agreed that any and all property described or
referred to in the granting clause 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 Indenture Trustee, become and be
subject to the Lien herein granted as fully and completely as though
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 to which it is a party.

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

                                   ARTICLE 1

                                  DEFINITIONS

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

                  (1)   each of "Owner Trustee," "Indenture Trustee,"
         "Noteholder," "Lessee," "Owner Participant," "Liquidity
         Provider,""Subordination Agent," "Pass Through Trustee" or any other
         Person includes, without prejudice to the provisions of any Operative
         Documents, any successor in interest to it and any permitted
         transferee, permitted purchaser or permitted assignee of it;

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

                  (3)   all accounting terms not otherwise defined herein have
         the meanings assigned to them in accordance with generally accepted
         accounting principles in the United States;

                                       8
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

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

                  (5)    all references in this Agreement to Articles, Sections
         and Exhibits refer to Articles, Sections and Exhibits of this
         Agreement; and

                  (6)    terms used herein without definition shall have the
         respective meanings specified therefor in the Lease.

                  (b)    For all purposes of this Agreement, the following
capitalized terms have the following respective meanings:

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

                  "Agent" means any Paying Agent or Registrar.
                   -----

                  "Aircraft" shall have the meaning specified therefor in the
                   --------
Lease.

                  "Airframe" shall have the meaning specified therefor in the
                   --------
Lease.

                  "Amortization Amount" means, with respect to any Equipment
                   -------------------
Note, as of any Payment Date, the amount determined by multiplying the
percentage set forth opposite such Payment Date on the Amortization Schedule by
the original principal amount of such Equipment Note.

                  "Amortization Schedule" means, (i) with respect to any Series
                   ---------------------
of Pass Through Equipment Notes, the amortization schedule for such Series as
set forth on Exhibit B-1, B-3 or B-4 of the Note Purchase Agreement, as the case
may be, and (ii) with respect to any Existing Equipment Note, the amortization
schedule of such Existing Equipment Note attached thereto on the date hereof.

                  "Assignment and Assumption Agreement" means that certain
                   -----------------------------------
Assignment and Assumption Agreement (1989 I) dated as of July 20, 2000, between
the Owner Trustee and the Owner Participant.

                                       9
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Average Life Date" shall mean, for each Equipment Note to be
                   -----------------
redeemed, the date which follows the redemption date by a period equal to the
Remaining Weighted Average Life at the redemption date of such Equipment Note.

                  "Bankruptcy Code" shall have the meaning specified therefor in
                   ---------------
the Lease.

                  "Basic Pass Through Trust Agreement" means the Pass Through
                   ----------------------------------
Trust Agreement to be entered into between Lessee and Pass Through Trustee, but
does not include any Pass Through Trust Supplement.

                  "Basic Rent" shall have the meaning specified therefor in the
                   ----------
Lease.

                  "Business Day" shall have the meaning specified therefor in
                   ------------
the Lease.

                  "Citizen of the United States" shall have the meaning
                   ----------------------------
specified therefor in the Lease.

                  "Commencement  Date" shall have the meaning specified therefor
                   ------------------
in the Lease.

                  "Continuous Stay Period" shall have the meaning specified in
                   ----------------------
Section 8.03(e)(iii) hereof.

                  "Co-Registrar" shall have the meaning specified therefor in
                   ------------
Section 2.03.

                  "Corporate Trust Department" means the principal office of the
                   --------------------------
Indenture Trustee located at the Indenture Trustee's address for notices under
the Participation Agreement or such other office at which the Indenture
Trustee's corporate trust business shall be administered which the Indenture
Trustee shall have specified by notice in writing to Owner Trustee and each
Noteholder.

                  "Debt" shall mean any liability for borrowed money, or any
                   ----
liability for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments.

                  "Debt Rate" shall mean (i) with respect to the Existing
                   ---------
Equipment Notes, the interest rate applicable thereto as determined in
accordance with the terms thereof and (ii) with respect to any Series of Pass
Through Equipment Notes, the rate per annum specified for such Series under the
heading "Interest Rate" in the related Exhibit B of the Note Purchase Agreement
for such Series.

                                       10
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Deposited Cash" shall mean the aggregate of (i) cash
                   --------------
deposited with the Indenture Trustee as provided in Section 3.01 and (ii) when
required or indicated by the context, any Permitted Investment purchased by the
use of such Deposited Cash pursuant to the provisions of Section 9.04(b).

                  "Eligible Institution" means (a) the corporate trust
                   --------------------
department of the Indenture Trustee, the Subordination Agent or any Pass Through
Trustee, as applicable, or (b) a depository institution organized under the laws
of the United States of America or any one of the States thereof or the District
of Columbia (or any U.S. branch of a foreign bank), which has a long-term
unsecured debt rating from Moody's and Standard & Poor's of at least "A-3" or
its equivalent.

                  "Engine" shall have the meaning specified therefor in the
                   ------
Lease.

                  "Equipment Note" or "Equipment Notes" means each Existing
                   --------------      ---------------
Equipment Note and, on and after the Refinancing Date only, the Pass Through
Equipment Notes.

                  "Event of Loss" shall have the meaning specified therefor in
                   -------------
the Lease.

                  "Excluded Payments" means (i) any right, title or interest of
                   -----------------
the Owner Trustee in its individual or trust capacity, the Owner Participant or
their respective Affiliates or of their respective successors, permitted
assigns, directors, officers, employees, servants and agents to any payment
which by the terms of Section 7(b) or 7(c) of the Participation Agreement,
Section 5.03 or 7.01 of the Trust Agreement or any section of the Tax Indemnity
Agreement or any corresponding payment under Section 3(d) of the Lease is
payable to such Person, (ii) any insurance proceeds payable under insurance
permitted to be maintained under Section 11(e) of the Lease by the Owner Trustee
in its individual or trust capacity or the Owner Participant (whether directly
or through the Owner Trustee), or to their respective Affiliates, successors,
permitted assigns, directors, officers, employees, servants and agents, (iii)
any insurance proceeds (or proceeds of governmental indemnities in lieu thereof)
payable to the Owner Trustee in its individual capacity or to the Owner
Participant, or to their respective Affiliates, successors, permitted assigns,
directors, officers, employees, servants and agents, under any liability
insurance maintained by the Lessee pursuant to Section 11 of the Lease or by any
other Person (or proceeds of governmental indemnities in lieu thereof), (iv) any
rights of the Owner Participant or the Owner Trustee to demand, collect, sue
for, or otherwise receive and enforce payment of the foregoing amounts
(including interest thereon to the extent provided in the applicable provisions
of the Operative Documents) and the right to give any notice of default under
Section 14 of the Lease, but not including the right to exercise any remedies
under the Lease except for those specifically provided for in this clause (iv),
(v) if the Lessee has assumed the obligations of the Owner Trustee in respect of
the Equipment Notes in accordance with Section 7.03 hereof and Section 8(r) of
the Participation Agreement, the amount payable as purchase price pursuant to
Section 9(b) of the Lease, (vi) amounts or expenses paid or payable to,

                                       11
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

or for the benefit of, the Owner Participant pursuant to the Participation
Agreement or the Note Purchase Agreement, (vii) the respective rights of the
Owner Trustee in its individual capacity or the Owner Participant to the
proceeds of the foregoing and (viii) any right to demand, collect or otherwise
receive and enforce the payment of any amount described in clauses (i) through
(vii) above; provided, that "Excluded Payments" shall not include any amount
payable to the Owner Trustee under clause (i) or (ii) above to the extent that
treating such amount as an "Excluded Payment" would result in the Trust Estate
or the Indenture Estate suffering any liability, loss, claim, or expense or
would result in a failure to reimburse the Trust Estate or the Indenture Estate
for any liability, loss, or expense previously suffered by it or otherwise in
any way result in a diminution of the Trust Estate or the Indenture Estate.

                  "Existing Equipment Notes" means the Series A Certificates
                   ------------------------
issued and outstanding under the Original Indenture on the Effective Date.

                  "Federal Aviation Act" shall have the meaning specified
                   --------------------
therefor in the Lease.

                  "Federal Aviation Administration" and "FAA" shall have the
                   -------------------------------       ---
meaning specified therefor in the Lease.

                  "Funding Period" in respect of the Existing Equipment Notes
                   --------------
only, shall mean a period commencing on the date of issuance of the Existing
Equipment Notes and ending on (but excluding) February 15, 2000 or thereafter a
period of from one to ten years, in increments of one-half years, but the final
Funding Period need not be an increment of one-half years, elected by Lessee on
behalf of the Owner Trustee, as set forth in the form of Existing Equipment
Note, provided that (i) the first of any such other Funding Periods shall
commence on February 15, 2000, and end on the August 15 or February 15
corresponding to the length of the Funding Period elected by Lessee on behalf of
the Owner Trustee, as set forth in the form of Existing Equipment Note, and each
succeeding Funding Period shall commence on the date immediately following the
expiration of the preceding Funding Period and end on the date determined as
aforesaid, (ii) there shall be no more than five (5) Funding Periods (excluding
for this purpose the initial Funding Period ending on February 15, 2000), (iii)
no Funding Period shall include or extend beyond the maturity date of the
Existing Equipment Notes, and (iv) the provisions of Section 7.04 of this
Agreement shall be complied with upon the selection of each new Funding Period.

                  "Indenture Default" means any event which is, or after notice
                   ------------------
or passage of time, or both, would be, an Indenture Event of Default.

                  "Indenture Estate" shall have the meaning specified therefor
                   ----------------
in the Granting Clause hereof.

                                       12
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Indenture Event of Default" shall have the meaning specified
                   --------------------------
therefor in Article 8.

                  "Indenture Indemnitee" means (i) the Indenture Trustee in its
                   --------------------
individual capacity and as Indenture Trustee, (ii) each separate or additional
trustee appointed pursuant to this Agreement, (iii) the Subordination Agent,
(iv) each Liquidity Provider, (v) on and after the Refinancing Date only, each
Pass Through Trustee, (vi) each Noteholder, and (vii) each of the respective
directors, officers, employees, agents and servants of the persons described in
clauses (i) through (vi) inclusive above.

                  "Indenture Supplement" means a supplement to this Agreement in
                   --------------------
the form of Exhibit B hereto.

                  "Indenture Trustee" means State Street Bank and Trust Company
                   -----------------
of Connecticut, National Association, and each other Person which may from time
to time be acting as Indenture Trustee in accordance with the provisions of this
Agreement.

                  "Intercreditor Agreement" means that certain Intercreditor
                   -----------------------
Agreement among the Pass Through Trustees, the Liquidity Providers and the
Subordination Agent, to be entered into on the Refinancing Date, provided that,
for purposes of any obligation of Owner Trustee, no amendment, modification or
supplement to, or substitution or replacement of, such Intercreditor Agreement
shall be effective unless consented to by Owner Trustee.

                  "Interest Payment Date" means (a) with respect to the Existing
                   ---------------------
Equipment Notes, each February 15 and August 15, commencing February 15, 1990,
so long as the Existing Equipment Notes remain Outstanding; and (b) with respect
to the Pass Through Equipment Notes, January 1, 2001 and each January 1 and July
1 of each year thereafter.

                  "Interest Period" means, (a) with respect to the Existing
                   ---------------
Equipment Notes, the periods set forth in Exhibit A to the Original Indenture;
and (b) with respect to each Series of Pass Through Equipment Notes initially,
the period from (and including) the Issuance Date for such Series and ending on
(but excluding) the first Interest Payment Date following such Issuance Date,
and thereafter each successive semi-annual period from (and including) on the
final day of the preceding Interest Period for such Series of Equipment Notes
and ending on the next succeeding Interest Payment Date.

                  "Issuance Date" means, with respect to each Series of
                   -------------
Equipment Notes, the date such Equipment Notes are issued by the Owner Trustee
pursuant to the terms hereof.

                  "Japanese Assumption Agreement" shall have the meaning
                   -----------------------------
specified therefor in the Lease.

                                       13
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Japanese Lease" shall have the meaning specified therefor in
                   --------------
the Lease.

                  "Japanese Lease Assignment" shall have the meaning specified
                   -------------------------
therefor in the Lease.

                  "Japanese Lease Assignment Supplement" shall have the meaning
                   ------------------------------------
specified therefor in the Lease.

                  "Japanese Lease Supplement" shall have the meaning specified
                   -------------------------
therefor in the Lease.

                  "Lease" means the First Amended and Restated Lease Agreement
                   -----
(1989 I), dated as of July 20, 2000 between the Owner Trustee, as lessor, and
the Lessee, as lessee, as such Lease Agreement may from time to time be further
supplemented, amended or modified in accordance with the terms thereof and this
Agreement. The term "Lease" shall also include each Lease Supplement entered
                     -----
into pursuant to the terms of the Lease.

                  "Lease Event of Default" shall have the meaning specified for
                   ----------------------
the term "Event of Default" in the Lease.

                  "Lease Loss Payment Date" shall mean the date on which
                   -----------------------
Stipulated Loss Value (as defined in the Lease) is to be paid pursuant to
Section 10(a) of the Lease.

                  "Lease Supplement" shall have the meaning specified therefor
                   ----------------
in the Lease.

                  "Lease Termination Date" shall have the meaning specified for
                   -----------------------
the term "Termination Date" in the Lease.

                  "Lessee" means United Air Lines, Inc., a Delaware corporation,
                   ------
and, subject to the provisions of the Participation Agreement, its permitted
successors and assigns.

                  "Lessor Liens" shall have the meaning specified therefor in
                   ------------
the Lease.

                  "Lessor's Consent and Agreement" shall have the meaning
                   ------------------------------
specified therefor in the Lease.

                  "Lessor's Purchase Agreement" shall have the meaning specified
                   ---------------------------
therefor in the Lease.

                  "Lien" means any mortgage, pledge, lien, charge, encumbrance,
                   ----
lease, security interest or claim.

                                       14
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Liquidity Facilities" means the three Revolving Credit
                   --------------------
Agreements (consisting of a separate Revolving Credit Agreement with the
applicable Liquidity Provider with respect to each of the Class A-1 Trust, the
Class A-2 Trust and the Class B Trust) between the Subordination Agent, as
borrower, and such Liquidity Provider, each to be dated as of the Refinancing
Date, provided that, for purposes of any obligation of Owner Trustee or Lessee,
      --------
no amendment, modification or supplement to, or substitution or replacement of,
any such Liquidity Facility shall be effective unless consented to by Owner
Trustee or Lessee, as the case may be.

                  "Liquidity Provider" means Landesbank Hessen-Thuringen
                   ------------------
Girozentrale as the Liquidity Provider under the Class A-1 Liquidity Facility,
the Class A-2 Liquidity Facility and the Class B Liquidity Facility (as such
terms are defined in the Intercreditor Agreement) or any successor thereto.

                  "Majority in Interest of Noteholders" means, subject, on and
                   -----------------------------------
after the Refinancing Date only, to Section 2.6 of the Intercreditor Agreement,
as of a particular date of determination, the holders of a majority in aggregate
unpaid principal amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by Owner Trustee, the Owner Participant, the
Lessee, Indenture Trustee or any Affiliate of any such party or any interests of
Owner Trustee therein (unless all Equipment Notes shall be held by any such
entity or an Affiliate thereof; provided, however, if all Equipment Notes are
held by the Lessee or an Affiliate thereof upon the occurrence and during the
continuance of an Event of Default, then the Owner Participant shall be
considered the "Majority in Interest of Noteholders" during the continuance of
such Event of Default)); provided that for the purposes of directing any action
or casting any vote or giving any consent, waiver or instruction hereunder, any
Noteholder of an Equipment Note or Equipment Notes may allocate, in such
Noteholder's sole discretion, any fractional portion of the principal amount of
such Equipment Note or Equipment Notes in favor of or in opposition to any such
action, vote, consent, waiver or instruction.

                  "Make-Whole Amount" means, on and after the Refinancing Date
                   -----------------
only, with respect to each Pass Through Equipment Note, an amount (as determined
by an independent investment banker of national standing selected by Lessee)
equal to the excess, if any determined under the following calculation:

                  (1)  the present value of the remaining scheduled payments of
                       principal and interest from the determination date to
                       maturity of such Pass Through Equipment Note computed by
                       discounting the payments on a semi-annual basis on each
                       Interest Payment Date (assuming a 360-day year of twelve
                       30-day months) using a discount rate equal to the
                       Treasury Yield, minus

                  (2)  the outstanding principal amount of such Pass Through
                       Equipment Note plus accrued interest to the date of
                       determination.

                                       15
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

For purposes of determining the Make-Whole Amount, the "Treasury Yield" means,
                                                        --------------
at the date of determination with respect to any Pass Through Equipment Note,
the interest rate (expressed as a semi-annual equivalent and as a decimal and,
in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the annual rate equal to the semi-annual yield to
maturity for United States Treasury securities maturing on the Average Life Date
of such Pass Through Equipment Note and trading in the public securities markets
either as determined by interpolation between most recent weekly average yield
to maturity for two series of United States Treasury securities trading in the
public securities markets, (1) one maturing as close as possible to, but earlier
than, the Average Life Date of such Pass Through Equipment Note and (2) the
other maturing as close as possible to, but later than, the Average Life Date of
such Pass Through Equipment Note, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Pass Through Equipment Note
is reported in the most recent H.15(519), the weekly average yield to maturity
as published in such H.15(519). As used in the definition of "Treasury Yield",
"H.15(519)" means, the weekly statistical release designated as such, or any
 ---------
successor publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of Make-Whole Amount is the third
(3rd) Business Day prior to the applicable payment date. The "most recent
                                                              -----------
H.15(519)" means the H.15(519) published prior to the close of business on the
---------
third business day prior to the applicable payment or redemption date.

                  "Moody's" means Moody's Investors Service, Inc. (or any
                   -------
successor thereto).

                  "Noteholder" means a person in whose name an Equipment Note is
                   ----------
registered on the Register (including, so long as it holds any Series A-1,
Series B or Series C-2 Pass Through Equipment Notes issued hereunder, the
Subordination Agent on behalf of the Pass Through Trustee under the applicable
Pass Through Trust Agreement pursuant to the provisions of the Intercreditor
Agreement).

                  "Note Purchase Agreement" means that certain 747 Leased
                   -----------------------
Equipment Note Purchase Agreement to be entered into on or before the
Refinancing Date among State Street Bank and Trust Company, as Owner Trustee,
BancBoston United Leasing LLC, as Owner Participant, United Airlines, Inc., as
Lessee, and State Street Bank and Trust Company of Connecticut, National
Association, as Pass Through Trustee under each Pass Through Trust Agreement,
Subordination Agent and Indenture Trustee.

                  "Omnibus Agreement" shall have the meaning specified therefor
                   -----------------
in the Lease.

                  "Original Lease" shall mean the documents described in Annex
                   --------------
II hereto.

                                       16
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Outstanding" when used with respect to Equipment Notes,
                   -----------
means, as of the date of determination, all Equipment Notes theretofore executed
and delivered under this Agreement other than:

                  (i)    Equipment Notes theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 or otherwise;

                  (ii)   Equipment Notes for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Holders of such Equipment Notes; provided that, if such
Equipment Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Agreement or provision therefor satisfactory to the
Indenture Trustee has been made; and

                  (iii)  Equipment Notes in exchange for or in lieu of which
other Equipment Notes have been executed and delivered pursuant to this
Agreement;

provided, however, that in determining whether the Holders of the holders of the
requisite principal amount of Equipment Notes Outstanding have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Equipment Notes owned by or pledged to Lessee or any Affiliate of Lessee shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Equipment Notes which the Indenture Trustee knows to be so owned or so pledged
shall be disregarded. Equipment Notes owned by Lessee which have been pledged in
good faith may be regarded as Outstanding if Lessee establishes to the
satisfaction of the Indenture Trustee the pledgee's right to act with respect to
such Equipment Notes and that the pledgee is not Lessee or an Affiliate thereof.

                  "Owner Participant" shall be the party specified as the "Owner
                   -----------------
Participant" in the Participation Agreement, its successors and, to the extent
permitted by Article VIII of the Trust Agreement and Section 8(l) of the
Participation Agreement, its permitted successors and assigns.

                  "Owner Trustee" means State Street Bank and Trust Company, not
                   -------------
in its individual capacity, but solely as trustee under the Trust Agreement, and
each other Person which may from time to time be acting as Owner Trustee in
accordance with the provisions of the Operative Documents.

                  "Participation Agreement" shall have the meaning specified
                   -----------------------
therefor in the Lease.

                  "Parts" shall have the meaning specified therefor in the
                   -----
Lease.

                                       17
<PAGE>

                                 [First Amended and Restated Trust Indenture
                                             and Security Agreement (1989 I)]

                  "Pass Through Agreements" means the Pass Through Trust
                   -----------------------
Agreements, the Note Purchase Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Liquidity Facilities.

                  "Pass Through Equipment Notes" means any equipment note or
                   ----------------------------
notes issued on or after the Refinancing Date under this Agreement, pursuant to
the terms of the Note Purchase Agreement, including each of the Series A-1,
Series B and Series C-2 Pass Through Equipment Notes issued hereunder,
substantially in the form of Exhibit A-2 hereto, as such form may be varied
pursuant to the terms hereof, and any and all equipment notes issued in
replacement or exchange therefor in accordance with the provisions hereof.

                  "Pass Through Trust Agreements" means each of the four
                   -----------------------------
separate Pass Through Trust Supplements, together in each case with the Basic
Pass Through Trust Agreement, each to be entered into by and between the Lessee
and a Pass Through Trustee as contemplated by the Note Purchase Agreement.

                  "Pass Through Trust Supplement" shall have the meaning
                   -----------------------------
specified for the term "Trust Supplement" in the Basic Pass Through Trust
Agreement.

                  "Pass Through Trustee" means State Street Bank and Trust
                   --------------------
Company of Connecticut, National Association, in its capacity as trustee under
each Pass Through Trust Agreement, and such other Person that may from time to
time be acting as successor trustee under any such Pass Through Trust Agreement.

                  "Past Due Rate" means, with respect to the principal of or
                   -------------
interest, or Make-Whole Amount (on and after the Refinancing Date only), if any,
or premium (prior to the Refinancing Date only) on any Equipment Note not paid
in full when due (whether at stated maturity, by acceleration or otherwise), or
with respect to any other amount payable to the holder thereof thereon or under
this Agreement not so paid in full when due, a rate of interest per annum equal
to 2%.

                  "Paying Agent" means any Person acting as Paying Agent
                   ------------
hereunder pursuant to Section 2.03.

                  "Payment Date" means, with respect to any Series of Pass
                   ------------
Through Equipment Notes, each Interest Payment Date listed on the Amortization
Schedule for such Series of Pass Through Equipment Notes set forth in the Note
Purchase Agreement.

                                       18
<PAGE>

                                  [First Amended and Restated Trust Indenture
                                             and Security Agreement (1989 I)]

                  "Permitted Investment" means (a) investments in obligations
                   --------------------
of, or guaranteed by, the United States Government having maturities no later
than 90 days following the date of such investment; (b) investments in open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with a short- term unsecured debt
rating issued by Moody's and Standard & Poor's of at least "A-1" and "P-1,"
respectively, having maturities no later than 90 days following the date of such
investment; or (c) investments in negotiable certificates of deposit, time
deposits, banker's acceptances, commercial paper or other direct obligations of,
or obligations guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any U.S. branch of a
foreign bank) with issuer ratings of at least "B/C" by Thomson Bankwatch, having
maturities no later than 90 days following the date of such investment;
provided, however, that: (x) all Permitted Investments that are bank obligations
--------  -------
shall be denominated in U.S. dollars; and (y) the aggregate amount of Permitted
Investments at any one time that are bank obligations issued by any one bank
shall not be in excess of 5% of such bank's capital and surplus; provided
                                                                 --------
further that (1) any investment of the types described in clauses (a), (b) and
-------                                                           ---  ---
(c) above may be made through a repurchase agreement in commercially reasonable
---
form with a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party custodian also
qualifying as an Eligible Institution, and (2) all such investments set forth in
clauses (a), (b) and (c) above mature no later than the Business Day preceding
        ---  ---     ---
the next Interest Payment Date; and provided further, that in the case of any
                                    -------- -------
Permitted Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for purposes
of the Code.

                  "Permitted Lien" shall have the meaning specified therefor in
                   -------------
the Lease.

                  "Person" means any individual, corporation, partnership, joint
                   ------
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "Prepayment Discount Rate" with respect to the Existing
                   ------------------------
Equipment Notes only, shall mean that yield quoted by Merrill Lynch Capital
Markets, or such other entity appointed by Lessee and approved by the Indenture
Trustee three Business Days prior to the date of redemption of the Existing
Equipment Notes at 11:00 a.m., New York time, equal to the semi-annual bid yield
to maturity on a U.S. Treasury Note issued within six months prior to the date
of redemption of the Existing Equipment Notes (as quoted on the Reference Page)
with a remaining term equal to the length of the existing Funding Period. If
there is no such U.S. Treasury Note with such a term, then the Prepayment
Discount Rate shall be interpolated from the semi-annual bid yield to maturity
on a U.S. Treasury Note issued within six months prior to the date of redemption
of the Existing Equipment Notes with a remaining term longer than but closest to
the length of the existing Funding Period and the semi-annual bid yield to
maturity on a U.S. Treasury Note issued within six months prior to the date of
redemption of the Existing

                                       19
<PAGE>

                                  [First Amended and Restated Trust Indenture
                                             and Security Agreement (1989 I)]

Equipment Notes with a remaining term shorter than but closest to the length of
the existing Funding Period.

                  "Primary Lender" shall have the meaning specified therefor in
                   --------------
the Lease.

                  "Primary Lessor" shall have the meaning specified therefor in
                   --------------
the Lease.

                  "Primary Lessor Comfort Letter" shall have the meaning
                   -----------------------------
specified therefor in the Lease.

                  "Purchase Agreement" shall have the meaning specified therefor
                   ------------------
in the Lease.

                  "Purchase Option Date" shall have the meaning specified
                   --------------------
therefor in the Lease.

                  "Record Date" for the interest or Amortization Amount payable
                   -----------
on any Equipment Note on any Interest Payment Date or Payment Date (other than
the maturity date) for such Equipment Note, as the case may be, means the
calendar day (whether or not a Business Day) which is 15 calendar days prior to
the related Interest Payment Date or Payment Date.

                  "Redemption Date" means the date on which the Equipment Notes
                   ---------------
are to be redeemed or purchased pursuant to Section 6.01 or Section 6.02, as the
case may be, as specified in the notice delivered pursuant to Section 6.03
hereof.

                  "Redemption Price" means the price at which the Equipment
                   ----------------
Notes are to be redeemed or purchased, determined as of the applicable
Redemption Date, pursuant to Section 6.01 or Section 6.02, as the case may be.

                  "Reference Page" shall mean the Telerate U.S. Treasury and
                   --------------
Money Markets p. 5 or any successor or alternate publication then reporting
yields on U.S. Treasury Notes.

                  "Refinancing Date" has the meaning specified therefor in the
                   ----------------
Lease.

                  "Register" shall have the meaning specified therefor in
                   --------
Section 2.03.

                  "Registrar" means any person acting as Registrar hereunder
                   ---------
pursuant to Section 2.03.

                  "Remaining Weighted Average Life" means, on the redemption
                   -------------------------------
date for an Pass Through Equipment Note which is being redeemed, the number of
days equal to the quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such

                                       20
<PAGE>

                                  [First Amended and Restated Trust Indenture
                                             and Security Agreement (1989 I)]

Pass Through Equipment Note, by (ii) the number of days from and including the
redemption date to but excluding the scheduled payment date of such principal
installment; by (b) the then unpaid principal amount of such Pass Through
Equipment Note.

                  "Rent" shall have the meaning specified therefor in the Lease.
                   ----

                  "Replacement Airframe" shall have the meaning specified
                   --------------------
therefor in the Lease.

                  "Replacement Engine" shall have the meaning specified therefor
                   ------------------
in the Lease.

                  "SEC" means the Securities and Exchange Commission.
                   ---

                  "Secured Obligations" shall have the meaning specified
                   -------------------
therefor in Section 2.11.

                  "Senior Noteholder" has the meaning specified in Section
                   -----------------
2.10(c).

                  "Series" means any of Series A-1, Series B, or Series C-2.
                   ------

                  "Series A-1" or "Series A-1 Pass Through Equipment Notes"
                   ----------      ---------------------------------------
means the Pass Through Equipment Notes issued hereunder and designated as
"Series A-1," in the original principal amount and maturities and bearing
interest as specified in the Note Purchase Agreement.

                  "Series B" or "Series B Pass Through Equipment Notes" means
                   --------      -------------------------------------
the Pass Through Equipment Notes issued hereunder and designated as "Series B,"
in the original principal amount and maturities and bearing interest as
specified in the Note Purchase Agreement.

                  "Series C-2" or "Series C-2 Pass Through Equipment Notes"
                   ----------      ---------------------------------------
means the Pass Through Equipment Notes issued hereunder and designated as
"Series C-2," in the original principal amount and maturities and bearing
interest as specified in the Note Purchase Agreement.

                  "Standard & Poor's" means Standard & Poor's Ratings Services,
                   -----------------
a division of McGraw-Hill Inc. (or any successor thereto).

                  "Stipulated Loss Value" shall have the meaning specified
                   ---------------------
therefor in the Lease.

                  "Subordination Agent" means State Street Bank and Trust
                   -------------------
Company of Connecticut, National Association, as Subordination Agent under the
Intercreditor Agreement, or any successor thereto.

                                       21
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  "Supplemental Rent" shall have the meaning specified therefor
                   -----------------
in the Lease.

                  "Tax Indemnity Agreement" shall have the meaning specified
                   -----------------------
therefor in the Lease.

                  "Termination Value" shall have the meaning specified therefor
                   -----------------
in the Lease.

                  "Trust Agreement" shall have the meaning specified therefor in
                   ---------------
the Lease.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
                   -------------------
as amended.

                  "Trust Indenture and Security Agreement", "Indenture" or "this
                   --------------------------------------    ---------      ----
Agreement" means this Amended and Restated Trust Indenture and Security
---------
Agreement (1989 I), as the same may from time to time be supplemented, amended
or modified.

                  "Trust Indenture Estate" shall have the meaning specified for
                   ----------------------
the term "Indenture Estate" hereunder.

                  "Trust Office" shall mean the principal corporate trust office
                   ------------
of the Owner Trustee located at the Owner Trustee's address for notices under
the Participation Agreement, or such other office at which the Owner Trustee's
corporate trust business shall be administered which the Owner Trustee shall
have specified by notice in writing to the Lessee, the Indenture Trustee and
each Noteholder.

                  "Trust Supplement" means a supplement to the Trust Agreement
                   ----------------
and this Agreement in the form of Exhibit B hereto.

                  "Trustee's Liens" shall have the meaning specified therefor in
                   ---------------
Section 9.10.

                  "United States" or "U.S." means the United States of America.
                   -------------      ----

                                   ARTICLE 2

                              THE EQUIPMENT NOTES

                  Section 2.01. Equipment Notes; Title and Terms. (a) The
                                --------------------------------
aggregate principal amount of Existing Equipment Notes which may be Outstanding
under this Agreement is limited to $94,416,264.24. The Existing Equipment Notes
shall be substantially in the form set forth in Exhibit A-1. The Existing
Equipment Notes shall be dated the Issuance Date, and shall be issued in the
maturities and principal amounts, and shall bear the interest rates per annum,
to be

                                       22
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

specified in the First Amendment to the Original Indenture. The Existing
Equipment Notes shall be issued in registered form only. The Existing Equipment
Notes shall upon original issuance be issued in minimum denominations of
$5,000,000 and integral multiples of $100,000 in excess of $5,000,000. The
Existing Equipment Notes are not redeemable prior to maturity except as provided
in this Agreement. Interest accrued on the Existing Equipment Notes shall be
calculated, in respect of the Existing Equipment Notes, on the basis of a 360-
day calendar year consisting of twelve 30-day months. The principal of, premium,
if any, and interest on the Existing Equipment Notes shall be payable at the
principal corporate trust office of the Indenture Trustee or at any office or
agency maintained for such purpose pursuant to Section 2.04; provided that,
interest may be payable at the option of the Indenture Trustee or the Paying
Agent by check mailed by the Indenture Trustee or the Paying Agent to the
address of the Holder entitled thereto as such address shall appear in the
Register. Upon the satisfaction of the conditions precedent set forth in the
Note Purchase Agreement, the Existing Equipment Notes shall be redeemed and
cancelled and the Pass Through Equipment Notes shall be issued hereunder, as
more particularly described in the Note Purchase Agreement.

               (b)  On the Refinancing Date, the Pass Through Equipment Notes
shall be issued in three separate series designated as Series A-1, Series B and
Series C-2, shall be dated the applicable Issuance Date with respect to such
Series, and shall be in the maturities and principal amounts and shall bear
interest as specified in the Note Purchase Agreement, as the case may be. Each
Series A-1, Series B and Series C-2 Pass Through Equipment Note shall be issued
to the Subordination Agent as nominee for the Pass Through Trustee under the
applicable Pass Through Trust Agreement. The Issuance Date for the Series A-1,
Series B and Series C-2 Pass Through Equipment Notes will be determined pursuant
to the Note Purchase Agreement.

               On and after the Refinancing Date only, the Owner Trustee agrees
to pay to the Indenture Trustee for distribution in accordance with Section 3.06
hereof: (i) an amount equal to the fees payable to the relevant Liquidity
Provider under the related Fee Letter (as defined in the Intercreditor Agreement
as originally in effect or as amended with the consent of the Owner Participant)
multiplied by a fraction the numerator of which shall be the sum of the then
outstanding aggregate principal amount of the Series A-1 Pass Through Equipment
Notes and Series B Pass Through Equipment Notes, and the denominator of which
shall be the sum of the then outstanding aggregate principal amount of all
"Series A-1 and Series A-2 Equipment Notes" and "Series B Equipment Notes" (each
as defined in the Intercreditor Agreement); (ii) (x) 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 (y) the fraction specified in the
foregoing clause (i); (iii) (x) 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 (y) the fraction specified in the foregoing
clause (i); (iv) (x) any amounts owed to the Liquidity Providers by the
Subordination

                                       23
<PAGE>

                                    [First Amended and Restated Trust Indenture

                                               and Security Agreement (1989 I)]

Agent as borrower under Section 3.01 (other than in respect of an Unpaid
Advance, an Applied Non-Extension Advance or an Applied Downgrade Advance),
3.02, 3.03 (other than in respect of an Unpaid Advance, an Applied Non-Extension
Advance or an Applied Downgrade Advance) 7.05 or 7.07 of each Liquidity Facility
(or similar provisions of any succeeding liquidity facility) multiplied by (y)
the fraction specified in the foregoing clause (i); (v) if any payment default
shall have occurred and be continuing with respect to interest on any Series A-1
Pass Through Equipment Note and Series B Pass Through Equipment Note, (x) the
excess, if any, of (1) the sum of (x) the amount equal to interest on any Unpaid
Advance, an Applied Non-Extension Advance or an Applied Downgrade Advance
payable under Section 3.07 of each Liquidity Facility plus (y) any other amounts
payable in respect of such Unpaid Advance, Non-Extension Advance or Applied
Downgrade Advance under Section 3.01, 3.03 or 3.09 of the applicable Liquidity
Facility over (2) the sum of Investment Earnings from any such Unpaid Advance,
Non-Extension Advance or Applied Downgrade Advance plus any amount of interest
at the Past Due Rate actually payable (whether or not in fact paid) by the Owner
Trustee on the overdue scheduled interest on the Equipment Notes in respect of
which such Unpaid Advance, Non-Extension Advance or Applied Downgrade Advance
was made, multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A-1 Pass Through Equipment
Notes and Series B Pass Through 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 and Series A-2 Equipment Notes" and "Series B
Equipment Notes" (each as defined in the Intercreditor Agreement) (other than
interest becoming due and payable solely as a result of acceleration of any such
"Equipment Notes"); (vi) Owner Trustee's pro rata share of all compensation and
reimbursement of expenses, disbursements and advances payable by Owner Trustee
under the Pass Through Trust Agreements; and (vii) Owner Trustee's pro rata
share of all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement except with
respect to any income or franchise taxes incurred by the Subordination Agent in
connection with the transactions contemplated by the Intercreditor Agreement.
For purposes of this paragraph, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Downgrade Advance", "Final Advance", "Investment
Earnings" and "Unpaid Advance" shall have the meanings specified in each
Liquidity Facility or the Intercreditor Agreement referred to therein. As used
herein, "Owner Trustee's pro rata share" means as of any time a fraction, the
numerator of which is the principal balance then outstanding of the Pass Through
Equipment Notes and the denominator of which is the aggregate principal balance
then outstanding of all "Trust Owned Notes" (as such term is defined in the
Intercreditor Agreement).

                  Section 2.02.  Execution and Authentication. (a) Equipment
                                 ----------------------------
Notes shall be executed on behalf of the Owner Trustee by the manual or
facsimile signature of an authorized officer in its Corporate Trust Department.

                                       24
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               (b) If any officer of the Owner Trustee executing an Equipment
Note no longer holds that office at the time such Equipment Note is executed on
behalf of the Owner Trustee, such Equipment Note shall be valid nevertheless.

               (c) At any time and from time to time after the execution of the
Equipment Notes, the Owner Trustee may deliver such Equipment Notes to the
Indenture Trustee for authentication and, subject to the provisions of Section
2.10, the Indenture Trustee shall authenticate the Equipment Notes by manual
signature upon written orders of the Owner Trustee. Equipment Notes shall be
authenticated on behalf of the Indenture Trustee by any authorized officer or
signatory of the Indenture Trustee.

               (d) An Equipment Note shall not be valid or obligatory for any
purpose or entitled to any security or benefit hereunder until executed on
behalf of the Owner Trustee by the manual or facsimile signature of an officer
of the Owner Trustee as provided in Section 2.02(a) and until authenticated on
behalf of the Indenture Trustee by the manual signature of an authorized officer
or signatory of the Indenture Trustee as provided in Section 2.02(c). Such
signatures shall be conclusive evidence that such Equipment Note has been duly
executed, authenticated and issued under this Agreement.

               Section 2.03.  Registrar and Paying Agent. The Indenture Trustee
                              --------------------------
shall maintain an office or agency where the Equipment Notes may be presented
for registration of transfer or for exchange (the "Registrar") and an office or
agency where (subject to Sections 2.04 and 2.08) the Equipment Notes may be
presented for payment or for exchange (the "Paying Agent"). The Registrar shall
keep a register (the "Register") with respect to the Equipment Notes and to
their transfer and exchange and the payments of Amortization Amounts thereon, if
any. The Indenture Trustee may appoint one or more co-registrars (the "Co-
Registrars") and one or more additional Paying Agents for the Equipment Notes
and the Indenture Trustee may terminate the appointment of any Co-Registrar or
Paying Agent at any time upon written notice. The term "Registrar" includes any
Co-Registrar. The term "Paying Agent" includes any additional Paying Agent.

               The Indenture Trustee shall initially act as Registrar and
Paying Agent.

               Section 2.04.  Transfer and Exchange. At the option of the
                              ---------------------
Noteholder thereof, Equipment Notes may be exchanged for an equal aggregate
principal amount of other Equipment Notes of the same Series (in the case of the
Pass Through Equipment Notes only), maturity and type and of any authorized
denominations or transferred upon surrender of the Equipment Notes to be
exchanged or transferred at the principal corporate trust office of the
Indenture Trustee, or at any office or agency maintained for such purpose
pursuant to Section 2.03. Whenever any Equipment Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Indenture Trustee shall
authenticate and deliver, the replacement Equipment Notes, dated the

                                       25
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

same date as the Equipment Note or Equipment Notes being replaced which the
Noteholder making the exchange is entitled to receive.

               All Equipment Notes issued upon any registration of transfer or
exchange of Equipment Notes shall be the valid obligations of the Owner Trustee,
evidencing the same obligations, and entitled to the same security and benefits
under this Agreement, as the Equipment Notes surrendered upon such registration
of transfer or exchange.

               Every Equipment Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Noteholder thereof or his attorney duly
authorized in writing. Every Equipment Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Registrar) be
duly endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Noteholder thereof or its
attorney duly authorized in writing, and the Indenture Trustee shall require an
opinion of counsel from each such Noteholder as to compliance of any such
transfer with the Securities Act of 1933, as amended, and the securities laws of
any state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of principal previously made on the old
Equipment Note or Equipment Notes with respect 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. Indenture Trustee may require such evidence reasonably
satisfactory to it as to the compliance of any such transfer with the Securities
Act, and the securities laws of any applicable state. Each initial Noteholder
and each transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to be bound by and comply with the provisions of the Participation
Agreement, this Indenture, the Note Purchase Agreement, and each other Operative
Document and, on and after the Refinancing Date only, Pass Through Document
applicable to a Noteholder.

               No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Equipment Notes, but the Registrar may,
as a condition to any transfer or exchange hereunder, require payment 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.

               The Registrar shall not be required (i) to register the transfer
of or to exchange any Equipment Note during a period beginning at the opening of
business 15 Business Days before the day of the mailing of a notice of
redemption of Equipment Notes pursuant to Section 6.01 or 6.02 and ending at the
close of business on the day of such mailing, or (ii) to register the transfer
of or to exchange any Equipment Note subject to redemption pursuant to such
Section 6.01 or 6.02.

                                       26
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               Section 2.05. Noteholder Lists; Ownership of Equipment Notes. (a)
                             ----------------------------------------------
The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Noteholders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Lessee for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee quarterly on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the possession
or control of the Registrar as to the names and addresses of the Noteholders.

               (b)  Ownership of the Equipment Notes shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration of
transfer of any Equipment Note, the Owner Trustee, the Owner Participant, the
Lessee, the Indenture Trustee, the Paying Agent and the Registrar may deem and
treat the Person in whose name any Equipment Note is registered as the absolute
owner of such Equipment Note for the purpose of receiving payment of principal
(including, subject to the provisions herein regarding the applicable Record
Dates, Amortization Amounts) of, Make-Whole Amount (on and after the Refinancing
Date only), if any, premium (prior to the Refinancing Date only), if any, and
interest on such Equipment Note and for all other purposes whatsoever, whether
or not such Equipment Note is overdue, and none of the Owner Trustee, the
Indenture Trustee, the Paying Agent or the Registrar shall be affected by notice
to the contrary.

               Section 2.06. 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 Noteholder of such
Equipment Note, issue and execute, and the Indenture Trustee shall authenticate
and deliver, in replacement thereof, as applicable, a new Equipment Note of the
same Series and having the same maturity, payable to the same Noteholder 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 Indenture
Trustee. If the Equipment Note being replaced has been destroyed, lost or
stolen, the Noteholder of such Equipment Note shall furnish to the Owner Trustee
and the Indenture Trustee such security or indemnity as may be required by it to
save the Owner Trustee and the Indenture Trustee harmless and evidence
satisfactory to the Owner Trustee and the Indenture Trustee of the destruction,
loss or theft of such Equipment Note and of the ownership thereof.

               Section 2.07. Cancellation. The Registrar and any Paying Agent
                             ------------
shall forward to the Indenture Trustee all Equipment Notes surrendered to them
for replacement, redemption, registration of transfer, exchange or payment. The
Indenture Trustee shall cancel all Equipment Notes surrendered for replacement,
redemption, registration of transfer, exchange, payment or cancellation and
shall destroy cancelled Equipment Notes.

                                       27
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               Section 2.08. Payment on Equipment Notes. The principal amount
                             --------------------------
of, interest on, Make-Whole Amount, if any, and other amounts due under each
Equipment Note or hereunder will be payable in Dollars by wire transfer of
immediately available funds not later than 11:00 a.m., Chicago, Illinois time,
on the due date of payment to the Indenture Trustee at the Corporate Trust
Department 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 Indenture 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 of this Agreement) by transferring, or causing to be transferred, by
wire transfer of immediately available funds in Dollars, prior to 1:00 p.m.,
Chicago, Illinois 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. If the Indenture Trustee shall fail to make
any such payment as provided in the immediately foregoing sentence after its
receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such Noteholders for loss of use of funds at the Debt Rate until such
payment is made and the Indenture Trustee shall be entitled to any interest
earned on such funds until such payment is made. Any payment made hereunder
shall be made free and clear of and without deduction for or on account of all
wire and like charges 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 Applicable Trustee for
cancellation promptly after such payment. Notwithstanding any other provision of
this Agreement to the contrary, the Indenture 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 Indenture 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 11:00 a.m., Chicago, Illinois time, at the
place of payment.

               Section 2.09. Payment from Indenture Estate Only; Non-Recourse
                             ------------------------------------------------
Obligations. All amounts payable by the Indenture Trustee and the Owner Trustee
-----------
under the Equipment Notes and this Agreement shall be made only from the income
and proceeds of the Indenture Estate. Each Noteholder of an Equipment Note, 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 Indenture Trustee is or shall
be personally liable to the Noteholder of any Equipment Note for any amount
payable under such Equipment Note or

                                       28
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

this Agreement or, except as expressly provided in this Agreement in the case of
the Owner Trustee and the Indenture Trustee, for any liability thereunder.

               Except as expressly provided herein, State Street Bank and Trust
Company is entering into this Agreement solely as Owner Trustee under the Trust
Agreement and not in its individual capacity, and in no case whatsoever shall
State Street Bank and Trust Company (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 State Street Bank and Trust Company shall
                         --------
be liable hereunder in its individual capacity, (i) for its own willful
misconduct or gross negligence and (ii) for the failure to use ordinary care in
the disbursement of funds. 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 State Street Bank and Trust Company shall be
released from all further duties and obligations hereunder, without prejudice to
any claims against State Street Bank and Trust Company or such predecessor Owner
Trustee for any default by State Street Bank and Trust Company or such
predecessor Owner Trustee, respectively, in the performance of its obligations
hereunder prior to such appointment.

               Section 2.10.  Subordination. With respect to the Pass Through
                              -------------
Equipment Notes only:

               (a)  The Indenture Trustee and, by acceptance of its Pass Through
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 amounts owed to
such Noteholder of such Series, including any payment or distribution of cash,
property or securities after the commencement of a proceeding of the type
referred to in Section 8.01(f) or (g) hereof, except as expressly provided in
Articles 2 and 3 hereof.

               (b)  By the acceptance of its Pass Through Equipment Notes of any
Series (other than Series A-1), each Noteholder of such Series agrees that in
the event that such Noteholder, in its capacity as a Noteholder, shall receive
any payment or distribution on any amounts in respect of such Series which it is
not entitled to receive under this Section 2.10 or Article 3 hereof, it will
hold any amount so received in trust for the Senior Noteholder (as defined in
Section 2.10(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article 3
hereof.

               (c)  As used in this Section 2.10, the term "Senior Noteholder"
shall mean, (i) the Noteholders of Series A-1 Pass Through Equipment Notes until
all amounts in respect of the Series A-1 Pass Through Equipment Notes have been
paid in full, (ii) after all amounts in

                                       29
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

respect of Series A-1 Pass Through Equipment Notes have been paid in full, the
Noteholders of Series B Pass Through Equipment Notes until all amounts in
respect of the Series B Pass Through Equipment Notes have been paid in full, and
(iii) after all amounts in respect of the Series A-1 Pass Through Equipment
Notes and Series B Pass Through Equipment Notes have been paid in full, the
Noteholders of Series C-2 Pass Through Equipment Notes until all amounts in
respect of the Series C-2 Pass Through Equipment Notes have been paid in full.

               Section 2.11. Termination of Interest in the Indenture Estate.
                             -----------------------------------------------
(a) No Noteholder or Indenture Indemnitee shall have any further interest in, or
other right with respect to, the Indenture Estate when and if the principal
amount of, Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), if any, and interest on all
Equipment Notes held by such Noteholder and all other sums payable to such
Noteholder or Indenture Indemnitee, as the case may be, hereunder, under the
Lease, such Equipment Notes and the Participation Agreement by the Lessee, the
Owner Participant and the Owner Trustee (collectively, the "Secured
Obligations") shall have been paid in full.

               (b)  It is understood and agreed that (i) neither this Indenture
nor the Indenture Estate secures or shall secure any payment or performance
obligations of any party under the Note Purchase Agreement, (ii) the Secured
Obligations shall not include any of such payment or performance obligations
under the Note Purchase Agreement and (iii) the failure by Lessee to pay,
perform or observe any of such payment or performance obligations shall not
constitute an Indenture Default or an Indenture Event of Default.

               Section 2.12. Withholding Taxes. The Indenture Trustee, as agent
                             -----------------
for the Owner Trustee, shall exclude and withhold at the appropriate rate from
each payment of principal amount of, interest on, Make-Whole Amount (on and
after the Refinancing Date only), if any, premium (prior to the Refinancing Date
only), if any, and other amounts due hereunder or under each Equipment Note (and
such exclusion and payment of withholding tax shall constitute payment in
respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by law. The Indenture Trustee agrees to act as
such withholding agent and, in connection therewith, whenever any present or
future United States taxes or similar charges are required to be withheld with
respect to any amounts payable hereunder or 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, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof (but in no event later than 30
days after the due date thereof) it will deliver to each Noteholder (with a copy
to the Owner Trustee) appropriate receipts and a U.S. Treasury Form 1042-S and
Form 8109 or Form 8109-B (or similar form at any relevant time in effect)
showing the payment thereof, together with such additional documentary evidence
as any such Noteholder may reasonably request from time to time.

                                       30
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               If a Noteholder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed, accurate and currently effective U.S.
Internal Revenue Service Form W-8BEN, W-8IMY, W-8ECI or W-8 EXP (or such
successor form or forms as may be required by the United States Treasury
Department) for the calendar year in which the payment hereunder or under the
Equipment Note(s) held by such Noteholder is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Indenture
Trustee has no reason to believe that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if any,
required by law (after taking into account any applicable exemptions properly
claimed by the Noteholder) to be withheld from payments hereunder or under the
Equipment Notes held by such Noteholder in respect of United States federal
income tax (and such payment of withholding tax shall constitute payment in
respect of such Equipment Note). If a Noteholder which is a U.S. Person has
furnished to the Indenture Trustee a properly completed, accurate and currently
effective U.S. Internal Revenue Service Form W-9, if applicable, prior to a
payment hereunder or under the certificates held by such Noteholder, no amount
shall be withheld from payments in respect of United States federal income tax.
If any Noteholder has notified the Indenture Trustee that any of the foregoing
forms or certificates is withdrawn or inaccurate, or if such Noteholder has not
filed a form claiming an exemption from United States withholding tax which is
applicable to any relevant period in which a payment is made or if the Code or
the regulations thereunder or the administrative interpretation thereof is at
any time after the date hereof amended to require such withholding of United
States federal income taxes from payments under the Equipment Notes held by such
Noteholder, the Indenture Trustee agrees to withhold from each payment due to
the relevant Noteholder withholding taxes at the appropriate rate under law and
will, on a timely basis as more fully provided above, deposit such amounts with
an authorized depository and make such returns, statements, receipts and other
documentary evidence in connection therewith as required by law.

               Owner Trustee shall not have any liability for the failure of the
Indenture Trustee to withhold taxes in the manner provided for herein or for any
false, inaccurate or untrue evidence provided by any Noteholder hereunder.

                                   ARTICLE 3

                     RECEIPT, DISTRIBUTION AND APPLICATION
                       OF FUNDS IN THE INDENTURE ESTATE

               Section 3.01.  [Reserved for Potential Future Use]

               Section 3.02.  Payment in Case of Redemption or Purchase of
                              --------------------------------------------
Equipment Notes. (a) So long as the Existing Equipment Notes are Outstanding, in
---------------
the event the Equipment Notes

                                       31
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

are redeemed in accordance with the provisions of Section 6.01 or Section 6.02,
the Indenture Trustee will apply on the Redemption Date any amounts then held by
it in the Trust Indenture Estate and received by it from Lessee, in the
following order of priority:

               first,  so much of such aggregate amount as shall be required to
               -----
          pay the Redemption Price pursuant to Section 6.01 or Section 6.02, as
          redemption of the Existing Equipment Notes on the Redemption Date; and

               second, the balance, if any, of such aggregate amount remaining
               ------
          shall be distributed to the Owner Trustee, for distribution in
          accordance with the terms of the Lease and the Participation
          Agreement.

               (b)     On and after the issuance of the Pass Through Equipment
Notes, except as otherwise provided in Section 3.05, in the event the Equipment
Notes are redeemed or purchased in accordance with the provisions of Section
6.01, the Indenture Trustee will apply on the Redemption Date any amounts then
held by it in the Indenture Estate and received by it from or on behalf of the
Lessee or the Owner Trustee in the following order of priority:

               first, so much thereof as was received by the Indenture Trustee
               -----
         with respect to the amounts due to it pursuant to Section 9.06 shall be
         applied to pay the Indenture Trustee such amounts;

               second, so much thereof remaining as shall be required to pay an
               ------
         amount equal to the Redemption Price on the Series A-1 Pass Through
         Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
         be applied to the redemption or purchase of the Series A-1 Pass Through
         Equipment Notes on the Redemption Date;

               third, so much thereof remaining as shall be required to pay an
               -----
         amount equal to the Redemption Price on the Series B Pass Through
         Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
         be applied to the redemption or purchase of the Series B Pass Through
         Equipment Notes on the Redemption Date;

               fourth, so much thereof remaining as shall be required to pay an
               ------
         amount equal to the Redemption Price on the Series C-2 Pass Through
         Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
         be applied to the redemption or purchase of the Series C-2 Pass Through
         Equipment Notes on the Redemption Date; and

               fifth, the balance, if any, thereof remaining thereafter shall be
               -----
         distributed to the Owner Trustee free and clear of the Lien hereof to
         be held or distributed to the Owner Participant in accordance with the
         terms of the Trust Agreement.

                                       32
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               Section 3.03. Application of Basic Rent. (a) So long as the
                             -------------------------
Existing Equipment Notes are Outstanding, each amount of Lease Rent received by
the Indenture Trustee from the Owner Trustee or Lessee, together with any amount
received by the Indenture Trustee pursuant to Section 8.03(e), shall, except as
otherwise provided in Section 3.02 or 3.05, be distributed by the Indenture
Trustee in the following order of priority:

               first, so much of such aggregate amount as shall be required to
               -----
         pay in full principal, interest and premium, if any, in respect of all
         Outstanding Existing Equipment Notes to the extent then due shall be
         distributed to the Persons entitled thereto;

               second, so much of such aggregate amount remaining as shall be
               ------
         required to pay any amount due the Indenture Trustee pursuant to
         Section 9.07 shall be applied to pay the Indenture Trustee such
         amounts; and

               third, the balance, if any, of such aggregate amount remaining
               -----
         thereafter shall be distributed to the Owner Trustee for distribution
         in accordance with the terms of the Lease.

               (b) On and after the issuance of the Pass Through Equipment
Notes, except as otherwise provided in Section 3.02, 3.04, 3.05 or 3.06, each
amount of Basic Rent received by the Indenture Trustee, any amount of interest
on overdue installments of Basic Rent and any amount received by the Indenture
Trustee pursuant to Section 8.03(e)(i) shall be promptly distributed by the
Indenture Trustee in the following order of priority:

               first, (i)    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) then due under all Series A-1
                             Pass Through Equipment Notes shall be distributed
                             to the Noteholders of Series A-1 Pass Through
                             Equipment Notes ratably, without priority of one
                             over the other, in the proportion that the amount
                             of such payment or payments then due under all
                             Series A-1 Pass Through Equipment Notes held by
                             each such Noteholder bears to the aggregate amount
                             of the payments then due under all Series A-1 Pass
                             Through Equipment Notes held by all such
                             Noteholders;

                     (ii)    after giving effect to paragraph (i) 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

                                       33
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

                             extent permitted by applicable law, on any overdue
                             interest) then due under all Series B Pass Through
                             Equipment Notes shall be distributed to the
                             Noteholders of Series B Pass Through Equipment
                             Notes ratably, without priority of one over the
                             other, in the proportion that the amount of such
                             payment or payments then due under all Series B
                             Pass Through Equipment Notes held by each such
                             Noteholder bears to the aggregate amount of the
                             payments then due under all Series B Pass Through
                             Equipment Notes held by all such Noteholders; and

                    (iii)    after giving effect to paragraphs (i) and (ii)
                             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) then due
                             under all Series C-2 Pass Through Equipment Notes
                             shall be distributed to the Noteholders of Series
                             C- 2 Pass Through Equipment Notes ratably, without
                             priority of one over the other, in the proportion
                             that the amount of such payment or payments then
                             due under all Series C-2 Pass Through Equipment
                             Notes held by each such Noteholder bears to the
                             aggregate amount of the payments then due under all
                             Series C-2 Pass Through Equipment Notes held by all
                             such Noteholders; and

               second, so much of such aggregate amount remaining as shall be
               ------
         required to pay any amount due the Indenture Trustee pursuant to
         Section 9.06 shall be applied to pay the Indenture Trustee such
         amounts; and

               third, the balance, if any, of such aggregate amount remaining
               -----
         the Lien hereof to be held or distributed in accordance with the terms
         of the Trust Agreement; provided that, during the continuance of an
                                 --------
         Event of Default and prior to the outstanding principal amount of the
         Equipment Notes becoming due and payable, the balance shall be held by
         the Indenture Trustee as collateral security for the obligations
         secured hereby; provided, further, that, at such time as one or more
         Lease Events of Default shall have occurred and any such Lease Event of
         Default shall have continued for a period of 180 days, such amounts
         shall be distributed to the Owner Trustee to be distributed in
         accordance with the terms of the Trust Agreement so long as no Event of
         Default exists other than by virtue of such Lease Event of Default.

                                       34
<PAGE>

                                    [First Amended and Restated Trust Indenture
                                               and Security Agreement (1989 I)]

               Section 3.04. Application of Certain Payments in Case of
                             ------------------------------------------
Requisition or Event of Loss. Except as otherwise provided in Section 3.05, any
----------------------------
amounts received directly or otherwise pursuant to the Lease from any
governmental authority or other party pursuant to Section 10 of the Lease with
respect to the Airframe or the Airframe and the Engines or engines then
installed on the Airframe whether or not in connection with an Event of Loss, to
the extent that such amounts are not at the time required to be paid to the
Lessee pursuant to said Section 10, and any amounts of insurance proceeds for
damage to the Indenture Estate received directly or otherwise pursuant to the
Lease from any insurer pursuant to Section 11 of the Lease with respect thereto
whether or not in connection with an Event of Loss, to the extent such amounts
are not at the time required to be paid to the Lessee pursuant to said Section
11, shall, except as otherwise provided in the next sentence, be applied by the
Indenture Trustee on behalf of the Owner Trustee in reduction of the Lessee's
obligations to pay Stipulated Loss Value and the other amounts payable by the
Lessee pursuant to Section 10 of the Lease for distribution under Section 3.02
hereof and the remainder, if any, shall, except as provided in the next
sentence, be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Lease. Any portion of any such amount referred
to in the preceding sentence which is not required to be so paid to the Lessee
pursuant to the Lease, solely because a Lease Event of Default shall have
occurred and be continuing, shall be held by the Indenture Trustee on behalf of
the Owner Trustee as security for the obligations of the Lessee under the Lease
and at such time as there shall not be continuing any Lease Event of Default or
such earlier time as shall be provided for in the Lease, such portion shall be
paid to the Owner Trustee to be held or distributed in accordance with the terms
of the Lease, unless the Indenture Trustee (as assignee from the Owner Trustee
of the Lease) shall have theretofore declared the Lease to be in default
pursuant to Section 15 thereof, in which event such portion shall be distributed
forthwith upon such declaration in accordance with the provisions of Section
3.05 hereof.

               Section 3.05.  Payments During Continuance of Indenture Event of
                              -------------------------------------------------
Default. (a) So long as the Existing Equipment Notes are Outstanding, all
-------
payments received and amounts held or realized by the Indenture Trustee after an
Indenture Event of Default shall have occurred and be continuing (including any
amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Article 8), as well as all payments or amounts then held or
thereafter received by the Indenture Trustee as part of the Trust Indenture
Estate while such Indenture Event of Default shall be continuing, shall be
distributed by the Indenture Trustee in the following order of priority:

               first, so much of such payments or amounts as shall be required
               -----
         to pay the Indenture Trustee all amounts then due it pursuant to
         Section 9.07 shall be applied to pay the Indenture Trustee such
         amounts;

               second, so much of such payments or amounts remaining as shall be
               ------
         required to pay the expenses incurred, or in the judgment of the
         Indenture Trustee expected to be

                                       35
<PAGE>

         incurred, in using, operating, storing, leasing, controlling or
         managing the Trust Indenture Estate, and of all maintenance, insurance,
         repairs, replacements, alterations, additions and improvements of and
         to the Trust Indenture Estate and to make all payments which the
         Indenture Trustee may be required or may elect to make, if any, for
         taxes, assessments, insurance or other proper charges upon the Trust
         Indenture Estate or any part thereof (including the employment of
         engineers and accountants to examine and make reports upon the
         properties, books and records of the Owner Trustee and Lessee), all in
         accordance with Section 8.03(c), shall be applied for such purposes;

               third, so much of such payments or amounts remaining as shall be
               -----
         required to pay principal, interest and premium, if any, in respect of
         all Existing Equipment Notes Outstanding and then due and payable,
         whether by declaration of acceleration pursuant to Section 8.02 or
         otherwise, shall be applied ratably to the payment of such principal,
         interest and premium, if any; and in case such payments or amounts
         shall be insufficient to pay in full the whole amount so due and
         unpaid, then to the payment of such principal, interest and premium, if
         any, without any preference or priority of one Existing Equipment Note
         over another, ratably according to the aggregate amount so due for
         principal, interest and premium, if any, at the date fixed by the
         Indenture Trustee for the distribution of such payments or amounts; and

               fourth, the balance, if any, of such payments or amounts
               ------
         remaining thereafter shall be held by the Indenture Trustee as
         collateral security for the obligations secured hereby until such time
         as no Indenture Event of Default shall be continuing hereunder or the
         Existing Equipment Notes have been accelerated and all amounts due
         thereon have been paid, at which time such payments or amounts shall be
         distributed to the Owner Trustee without derogation of any rights of
         Lessee under the Operative Documents to receive the same; provided that
                                                                   --------
         at such time as one or more Lease Events of Default shall have occurred
         and all such Lease Events of Default shall have continued for a period
         of one year during which the Existing Equipment Notes shall not have
         been accelerated pursuant to Section 8.02, such amounts shall be
         distributed to the Owner Trustee for distribution in accordance with
         the provisions of the Lease so long as no Indenture Event of Default
         exists other than by virtue of such Lease Events of Default.

               (b) On and after the issuance of the Pass Through Equipment
Notes, all payments (except Excluded Payments) received and amounts held or
realized by the Indenture Trustee after an Indenture Event of Default shall have
occurred and be continuing (including any amounts realized by the Indenture
Trustee from the exercise of any remedies pursuant to Article 8) and the
outstanding principal amount of the Equipment Notes shall have become due and
payable, as well as all payments or amounts then held or thereafter received by
the Indenture Trustee as part of the Indenture Estate while such Indenture Event
of Default shall be continuing, shall be distributed by the Indenture Trustee in
the following order of priority:

                                       36
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

          first, so much of such payments or amounts as shall be required to pay
          -----
the Indenture Trustee all amounts then due it pursuant to Section 9.06 shall be
applied to pay the Indenture Trustee such amounts;

          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 9.06 hereof (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 said
Section 9.06 hereof;

          third, so much of such payments or amounts remaining as shall be
          -----
required to (i) pay, or reimburse the Indenture Trustee for, all costs, losses,
taxes and expenses (including, without limitation, reasonable attorney's fees
and expenses) incurred (including unbilled expenses in respect of property
delivered or contracted for or services rendered or contracted for if the amount
of such expenses is liquidated) in using, operating, storing, selling, leasing,
disposing of, controlling or managing the Indenture Estate, and in connection
with all maintenance, insurance, repairs, replacements, alterations, additions
and improvements of and to the Indenture Estate and in connection with the
protection, exercise, enforcement and investigation into enforcement of any
right, power or remedy available to, or any damages sustained by, the Indenture
Trustee, whether liquidated or otherwise, and to make all payments which the
Indenture Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Indenture Estate or any
part thereof (including the employment of engineers and accountants to examine
and make reports upon the properties, books and records of the Owner Trustee
and, to the extent permitted under the Lease, the Lessee) shall be applied for
such purposes and (ii) pay, or reimburse the other Indenture Indemnitees for,
all Secured Obligations payable to any of them; and in case the aggregate amount
so to be distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in accordance with the amounts
owed to each;

          fourth, (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
Pass Through Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations owed in respect of the
Series A-1 Pass Through Equipment Notes to the date of distribution, shall be
distributed to the holders of Series A-1 Pass Through Equipment Notes, and in
case the aggregate amount so to be distributed shall be insufficient to pay in
full as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid principal amount of all Series A-1 Pass
Through Equipment Notes held by each Noteholder plus the accrued but unpaid
interest

                                       37
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

     and other amounts due hereunder or thereunder to the date of distribution,
     bears to the aggregate unpaid principal amount of all Series A-1 Pass
     Through 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 effect to paragraph (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 Pass Through Equipment
     Notes, and the accrued but unpaid interest and other amounts due thereon
     and all other Secured Obligations in respect of the Series B Pass Through
     Equipment Notes to the date of distribution, shall be distributed to the
     holders of Series B Pass Through Equipment Notes, and in case the aggregate
     amount so to be distributed shall be insufficient to pay in full as
     aforesaid, then ratably, without priority of one over the other, in the
     proportion that the aggregate unpaid principal amount of all Series B Pass
     Through 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 Pass Through Equipment Notes held by all such holders plus the accrued
     but unpaid interest and other amounts due thereon to the date of
     distribution; and

          (iii)   after giving effect to paragraphs (i) and (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-2 Pass Through
     Equipment Notes, and the accrued but unpaid interest and other amounts due
     thereon and all other Secured Obligations in respect of the Series C-2 Pass
     Through Equipment Notes to the date of distribution, shall be distributed
     to the Noteholders of Series C-2 Pass Through Equipment Notes, and in case
     the aggregate amount so to be distributed shall be insufficient to pay in
     full as aforesaid, then ratably, without priority of one over the other, in
     the proportion that the aggregate unpaid principal amount of all Series C-2
     Pass Through 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-2 Pass Through Equipment Notes held by all such holders plus the
     accrued but unpaid interest and other amounts due thereon to the date of
     distribution; and

          fifth, the balance, if any, of such payments or amounts remaining
          -----
     thereafter shall be distributed to the Owner Trustee free and clear of the
     Lien hereof to be held or distributed in accordance with the terms of the
     Trust Agreement.

          No Make-Whole Amount shall be payable in connection with an Indenture
Event of Default or distributable under this Section 3.05.

                                       38
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

          Section 3.06. Payments for Which Application Is Provided in Other
                        ---------------------------------------------------
Documents. (a) Any payments received by the Indenture Trustee for which no
---------
provision as to the application thereof is made in this Agreement and for which
such provision is made in the Lease or the Participation Agreement shall be
applied forthwith to the purpose for which such payment was made in accordance
with the terms of the Lease or the Participation Agreement, as the case may be.

          (b) Notwithstanding anything to the contrary contained in this Article
3, the Indenture Trustee will distribute promptly upon receipt any indemnity
payment received by it from the Owner Trustee or the Lessee in respect of the
Indenture Trustee in its individual capacity, any Noteholder or any other
Indenture Indemnitee, in each case whether pursuant to Section 7 of the
Participation Agreement or as Supplemental Rent, directly to the Person entitled
thereto. Any payment received by the Indenture Trustee under the second
paragraph of Section 2.01 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement.

          (c) Notwithstanding anything to the contrary contained in this Article
3, any payments received by the Indenture Trustee which constitute Excluded
Payments shall be distributed promptly upon receipt by the Indenture Trustee
directly to the Person or Persons entitled thereto.

          Section 3.07. Payments for Which No Application Is Otherwise Provided.
                        -------------------------------------------------------
Except as otherwise provided in Section 3.06, any payment received and amounts
realized by the Indenture Trustee for which no provision as to the application
thereof is made elsewhere in this Agreement, shall be distributed by the
Indenture Trustee (a) to the extent received or realized at any time prior to
the payment in full of all Secured Obligations to the Noteholders, in the order
of priority specified in Section 3.03 hereof, and (b) to the extent received or
realized or realized after payment in full of all Secured Obligations to the
Noteholders, in the following order of priority:

               first, so much of such aggregate amount as shall be required to
               -----
          pay the Indenture Trustee all amounts then due it pursuant to Section
          9.06 shall be applied to pay the Indenture Trustee such amounts; and

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

          Section 3.08. Application of Payments. Each payment of principal or
                        -----------------------
and interest or other amounts due on each Equipment Note shall, except as
otherwise provided herein, be applied, first, to the payment of interest on such
                                       -----
Equipment Note due and payable to

                                       39
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

the date of such payment, as provided in such Equipment Note, as well as any
interest on overdue principal, Make-Whole Amount (on and after the Refinancing
Date only), if any, premium (prior to the Refinancing Date only), if any, and,
to the extent permitted by law, interest and other amounts due thereunder,
second, to the payment of any other amount (other than the principal of such
------
Equipment Note) due hereunder to the Noteholder of such Equipment Note or under
such Equipment Note, third, to the payment of the principal of such Equipment
                     -----
Note if then due hereunder or under any such Equipment Note, and fourth, the
                                                                 ------
balance, if any remaining thereafter, to the principal of such Equipment Note
remaining unpaid (provided that such Equipment Note shall not be subject to
prepayment without the consent of the affected Noteholder except as permitted by
Section 6.01 hereof).

                                   ARTICLE 4

                          COVENANTS OF OWNER TRUSTEE

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

                  (i)    the Owner Trustee will duly and punctually pay the
principal of, Make-Whole Amount (on and after the Refinancing Date only), if
any, premium (prior to the Refinancing Date only), if any, and interest on and
other amounts due under the Equipment Notes in accordance with, and subject to,
the terms of such Equipment Notes, this Agreement and any related supplement
hereto; provided, however, that all amounts payable under the Equipment Note and
this Agreement shall be made solely from the income and proceeds of the
Indenture Estate;

                  (ii)   (A) the Owner Trustee, in its individual capacity, will
not directly or indirectly create, incur, assume or suffer to exist any Lessor
Lien attributable to it in its individual capacity with respect to any of the
properties or assets of the Indenture Estate and if any such Lessor Lien shall
nevertheless exist, it will promptly, at its own expense, take such action as
may be necessary to duly discharge such Lessor Lien; and (B) the Owner Trustee
will, in its individual capacity, perform all of its covenants and obligations
set forth in the Participation Agreement;

                  (iii)  in the event an officer in the Corporate Trust
Department 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 of such Indenture Event of Default or Indenture
Default or Event of Loss to the Indenture Trustee, the Owner Participant and the
Lessee;

                                       40
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

               (iv) except as contemplated by the Operative Documents, the Owner
Trustee will not contract for, create, incur, assume or permit to exist any
Debt, and will not guarantee (directly or indirectly or by an instrument having
the effect of assuring 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

               (v)  the Owner Trustee will not enter into any business or other
activity other than owning the Aircraft, the leasing thereof to the Lessee and
the carrying out of the transactions contemplated hereby and by the
Participation Agreement, the Trust Agreement and the other Operative Documents.

               (vi) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates and other documents furnished to the Owner
Trustee under the Lease or the Japanese Lease or any document related to the
Japanese Lease which is not required to be furnished to the Indenture Trustee
directly by the Lessee under any Operative Document.

                                   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 Agreement 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
Indenture Trustee, to remove, replace and pool Parts and to make alterations,
improvements and modifications in, and additions to, the Aircraft. The Indenture
Trustee agrees that, to the extent permitted by and as provided in the Lease,
title to any such replaced Part shall vest in the Lessee. The Indenture Trustee
shall, upon written request by the Lessee or the Owner Trustee, from time to
time execute an appropriate written instrument or instruments to confirm the
release of the security interest of the Indenture Trustee in any such replaced
Part.

                                       41
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

          (b)  Substitution Under the Lease upon an Event of Loss Occurring to
               ---------------------------------------------------------------
Airframe or Engines or upon Voluntary Termination of Lease with Respect to
--------------------------------------------------------------------------
Engines. Upon (i) the occurrence of an Event of Loss occurring to the Airframe
-------
or an Engine, or (ii) a voluntary termination of the Lease with respect to an
Engine, the Lessee, in accordance with the Lease, may, in the case of an Event
of Loss which has occurred to the Airframe, or shall, except as provided in
Section 10(b) of the Lease, in the case of an Event of Loss which has occurred
to, or termination of the Lease with respect to, an Engine, substitute an
airframe or engine, as the case may be, in which case, upon satisfaction of all
conditions to such substitution specified in Section 10 of the Lease, the
Indenture Trustee shall release all of its right, interest and Lien in and to
the Airframe or such Engine in accordance with the provisions of the following
two sentences. The Indenture Trustee shall execute and deliver to the Owner
Trustee an instrument releasing its Lien in and to the Airframe or such Engine
and shall execute for recording in public offices, such instruments in writing
as the Owner Trustee or the Lessee shall reasonably request and as shall be
reasonably acceptable to the Indenture Trustee in order to make clear upon
public records that such lien has been released under the laws of the applicable
jurisdiction.

                                   ARTICLE 6

                         REDEMPTION OF EQUIPMENT NOTES

          Section 6.01. Redemption of Equipment Notes upon Certain Events. (a)
If there shall be an Event of Loss to the Aircraft or Airframe and the Aircraft
or Airframe is not replaced pursuant to Section 10(a)(ii) of the Lease, each
outstanding Equipment Note shall be redeemed in whole at a redemption price
equal to 100% of the outstanding principal amount of such Equipment Note,
together with accrued and unpaid interest thereon to but excluding the
applicable Redemption Date. No Make-Whole Amount or premium shall be payable in
connection with a redemption under this Section 6.01(a).

          (b) If (i) the Lease shall be terminated by the Lessee at its option
pursuant to Section 9(a) or 9(b) of the Lease (unless the Lessee shall have
elected to assume the rights and obligations of the Owner Trustee hereunder to
the extent and as provided for in Section 9(b) of the Lease) or (ii) the Owner
Trustee or the Owner Participant shall have given notice of redemption or
purchase to the Indenture Trustee pursuant to Section 8.03(e)(ii), each
outstanding Equipment Note shall be redeemed or purchased in whole on the
Redemption Date and at the Redemption Price determined pursuant to Section 6.02
below. The Redemption Date for Equipment Notes to be redeemed or purchased (X)
pursuant to clause (i) of this Section 6.01(b) shall be (A) in the case of a
termination of the Lease pursuant to Section 9(a) or 9(b) thereof, the third
Business Day following the Lease Termination Date, if any, and (Y) pursuant to
clause (ii) of this Section 6.01(b), shall be the date specified in the notice
given by the Owner Trustee or the Owner Participant to the Indenture Trustee
pursuant to Section 8.03(e)(ii). If the Owner Trustee

                                       42
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

elects to purchase the Equipment Notes under Section 8.03(e)(ii), nothing
herein, including use of the terms "Redemption Date" and "Redemption Price"
shall be deemed to result in a redemption of the Equipment Notes.

          (c) All the outstanding Equipment Notes may be redeemed if the Lessee
shall have requested the Owner Trustee and the Owner Participant to effect a
redemption thereof pursuant to Section 17 of the Participation Agreement as part
of a refunding or refinancing, and if all the conditions to such refunding or
refinancing set forth in such Section 17 of the Participation Agreement shall
have been satisfied. In such event, each outstanding Equipment Note may be so
redeemed at a Redemption Price specified in Section 6.02; provided, however,
that the applicable Redemption Date for Equipment Notes to be redeemed pursuant
to this Section 6.01(c) shall be the applicable Refinancing Date under Section
17 of the Participation Agreement.

          Section 6.02. Redemption Price. (a) So long as the Existing Equipment
                        ----------------
Notes are Outstanding, upon the occurrence of an Event of Loss to the Aircraft
if the Aircraft is not replaced pursuant to Section 10(a)(ii) of the Lease, each
Outstanding Existing Equipment Note shall be redeemed in whole at a Redemption
Price equal to 100% of the principal amount of such Existing Equipment Note plus
accrued and unpaid interest thereon to but excluding the applicable Redemption
Date. The Redemption Date for Existing Equipment Notes to be redeemed pursuant
to this Section 6.01(a) shall be the date on which payment of Stipulated Loss
Value is made by Lessee pursuant to Section 10(a)(i) of the Lease.

          So long as the Existing Equipment Notes are Outstanding, upon (1)
termination by Lessee, at its option, of the Lease pursuant to Section 9(a) of
the Lease or upon the purchase of the Aircraft by Lessee at its option pursuant
to Section 9(b) of the Lease (unless Lessee shall have elected to assume all of
the rights and obligations of the Owner Trustee hereunder as provided for in
clause (2)(A) of Section 9(b) of the Lease), or (2) the Owner Trustee giving
notice of redemption to the Indenture Trustee pursuant to Section 8.03(e)(ii),
at any time after one or more Lease Events of Default shall have occurred and
shall have continued for 180 days or more but less than one year and no
acceleration has occurred, each Outstanding Existing Equipment Note shall be
redeemed in whole at a Redemption Price as determined below. Such Redemption
Price shall, subject to the second immediately succeeding sentence, be equal to
the greater of (i) the unpaid principal amount of such Existing Equipment Note
and (ii) the present value on the first Business Day immediately preceding the
Redemption Date of all remaining scheduled principal and interest payments due
on such Existing Equipment Note on or prior to the first day of the immediately
succeeding Funding Period (as adjusted for the assumption that all principal
payments payable after the first day of the immediately succeeding Funding
Period would be paid on such first day) discounted to the Redemption Date at the
Prepayment Discount Rate plus 30 basis points, plus in each case accrued and
unpaid interest on the principal of such Existing Equipment Note to but
excluding the applicable Redemption Date. Any excess of

                                       43
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

(ii) over (i) shall be deemed premium. In the event of a redemption of the
Existing Equipment Notes on a date which is the first day immediately following
the end of a Funding Period, the unpaid principal amount of each Existing
Equipment Note shall become due and payable, without premium, together with
accrued and unpaid interest on the principal of such Existing Equipment Note to
but excluding the applicable Redemption Date. The Redemption Date for Existing
Equipment Notes to be redeemed pursuant to the foregoing clause (1) shall be the
Lease Termination Date and the Redemption Date for Existing Equipment Notes to
be redeemed pursuant to the foregoing clause (2) shall be the same date as if
the redemption had occurred pursuant to Section 6.02.

          (b) On and after the issuance of the Pass Through Equipment Notes, if
the Equipment Notes are to be redeemed or purchased pursuant to Section 6.01 or
8.03(e)(ii), each outstanding Equipment Note shall be redeemed or purchased in
whole at a Redemption Price equal to 100% of its principal amount plus (except
in connection with a redemption or purchase under Section 6.01(a) or 8.03(e)(ii)
when no Make-Whole Amount is payable) Make-Whole Amount (on and after the
Refinancing Date only), if any, plus accrued and unpaid interest thereon to but
excluding the applicable Redemption Date.

          Section 6.03. Notice of Redemption to Noteholders. Notice of
                        -----------------------------------
redemption or purchase pursuant to Section 6.01 or 6.02 shall be given by first-
class mail, postage prepaid, mailed not less than 26 nor more than 60 days prior
to the Redemption Date, to each Noteholder of Equipment Notes to be redeemed or
purchased, at such Noteholder's address appearing in the Register; provided,
                                                                   --------
that such notice shall become irrevocable 26 days prior to the applicable
Redemption Date; provided that, in the case of a redemption pursuant to Section
                 --------
6.01(b)(i) related to Lessee's exercise of its option pursuant to Section 9(b)
of the Lease, such notice shall be revocable and shall be deemed revoked in the
event the Lease does not in fact terminate on the related Lease Termination
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 interest on Equipment
       Notes shall cease to accrue on and after such Redemption Date,

          (4)  an estimate of the amount of Make-Whole Amount (on and after the
       Refinancing Date only), if any, and premium (prior to the Refinancing
       Date only), if any, that will be payable with respect to such redemption,
       and

                                       44
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (5)      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 or purchased
shall be given by the Indenture Trustee.

                  Section 6.04.  Deposit of Redemption Price. 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 or purchased on the Redemption Date shall not
then be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 11:00 a.m., Chicago time, in
immediately available funds the Redemption Price of the Equipment Notes to be
redeemed or purchased on the Redemption Date.

                  Section 6.05.  Equipment Notes Payable on Redemption Date.
                                 ------------------------------------------
Notice of redemption or purchase having been given as aforesaid (and not deemed
revoked as contemplated in the proviso to Section 6.03), the Equipment Notes
shall, on the applicable Redemption Date, become due and payable at the
Corporate Trust Department of the Indenture Trustee or at any office or agency
maintained for such purposes pursuant to Section 2.03, and from and after such
Redemption Date (unless there shall be a default in the deposit of the
Redemption Price pursuant to Section 6.04) any Equipment Notes then outstanding
shall cease to bear interest or be deemed to be outstanding for any other
purpose. Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice such Equipment Note shall be paid at the Redemption
Price.

                  If any Equipment Note called for redemption or purchase shall
not be so paid upon surrender thereof for redemption or purchase, the principal
amount thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Equipment Note.

                  Section 6.06.  No Prepayment or Redemption. Except as
                                 ---------------------------
expressly provided in this Article 6 or as expressly provided in any supplement
to this Agreement, the Equipment Notes may not be redeemed or prepaid, in whole
or in part, prior to the respective maturities thereof.

                                       45
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                                   ARTICLE 7

                         MATTERS CONCERNING THE LESSEE

                  Section 7.01.  Repayment of Monies for Equipment Note Payments
                                 -----------------------------------------------
Held by the Indenture Trustee. Any money held by the Indenture Trustee or any
-----------------------------
Paying Agent in trust for any payment of the principal of, Make-Whole Amount (on
and after the Refinancing Date only), if any, premium (prior to the Refinancing
Date only), if any, or interest on any Equipment Note, including without
limitation any money deposited pursuant to Section 6.03 or Article 10 and
remaining unclaimed for two years after the due date for such payment, shall be
paid to the Owner Trustee. The Noteholders of any outstanding Equipment Notes
shall thereafter, as unsecured general creditors, look only to the Lessee on
behalf of the Owner Trustee for payment thereof, and all liability of the
Indenture Trustee or any such Paying Agent with respect to such trust money
shall thereupon cease; provided that the Indenture Trustee or such Paying Agent,
                       --------
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 7.02.  Change in Registration. So long as no Default
                                 ----------------------
under Section 14(a), (b), (f) or (g) of the Lease or any Indenture Event of
Default shall have occurred and be continuing and the Lien of this Indenture
shall not have been discharged, the Indenture Trustee shall, upon the request of
the Lessee and compliance with the applicable provisions of the next two
paragraphs, consent to the deregistration of the Aircraft under the laws of the
jurisdiction in which it is at the time registered and the registration of the
Aircraft under the laws of (i) any country listed on Exhibit G to the Lease with
which the United States then maintains normal diplomatic relations or, if
Taiwan, the United States then maintains diplomatic relations at least as good
as those in effect on the Closing Date (a "Scheduled Country"), or (ii) any
other country, in each case subject to the provisions hereof and subject to the
provisions of Section 7(a)(3) of the Lease and Section 8(e) of the Participation
Agreement..

                  Prior to any such re-registration under the laws of a
Scheduled Country, the Indenture Trustee shall have received a favorable opinion
of counsel addressed to it to the effect that (i) the laws of the new country of
registration will recognize the Owner Trustee's right of ownership with respect
to the Aircraft and will give effect to the priority of the Lien and security
interest created by this Indenture, (ii) this Indenture and the Indenture
Trustee's Lien and right to repossession thereunder is valid and enforceable
under the laws of such country and (iii) the terms (including, without
limitation, the governing-law, service-of-process and jurisdictional- submission
provisions thereof) of the Indenture are legal, valid, binding and enforceable
in such jurisdiction.

                                       46
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  Prior to any such re-registration under the laws of any
country other than the U.S. or a Scheduled Country, the Indenture Trustee shall
have received (x) a favorable opinion of counsel in the new jurisdiction of
registry covering the matters set forth in the preceding paragraph and to the
effect that (A) it is not necessary for the Indenture Trustee to register or
qualify to do business in such jurisdiction, (B) that there is no tort liability
of the lender of an aircraft not in possession thereof under the laws of such
jurisdiction other than tort liability which might have been imposed on such
lender under the laws of the United States or any state thereof (it being
understood that, such opinion shall be waived if insurance reasonably
satisfactory to Indenture Trustee is provided, at Lessee's expense, to cover
such risk), and (C) (unless Lessee shall have agreed to provide insurance
covering the risk of requisition of use or title of the Aircraft by the
government of such jurisdiction so long as the Aircraft is registered under the
laws of such jurisdiction) that the laws of such jurisdiction require fair
compensation by the government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use or title of the Aircraft in the
event of the requisition by such government of such use or title and (y)
assurances (A) to the effect that the insurance or self-insurance provisions of
the Indenture have been complied with after giving effect to such change of
registry, (B) to the effect that the original indemnities (and any additional
indemnities for which the Lessee is then willing to enter into a binding
agreement to indemnify) in favor of the Indenture Trustee under the Indenture,
afford each such party substantially the same protection as provided prior to
such change of registry.

                  Section 7.03.  Assumption of Obligations of Owner Trustee by
                                 ---------------------------------------------
the Lessee. In the event that the Lessee shall have elected to assume all of the
----------
rights and obligations of the Owner Trustee under this Agreement and the
Equipment Notes in connection with the purchase by the Lessee of the Aircraft
pursuant to Section 9(b) of the Lease and, if on or prior to the Purchase Option
Date:

                  (a) the Lessee shall have paid to the Owner Trustee all
amounts required to be paid to the Owner Trustee pursuant to Section 19(b) of
the Lease in connection with such purchase and assumption and shall have
delivered to the Indenture Trustee an Officer's Certificate to such effect;

                  (b) the Indenture Trustee shall have received an opinion or
opinions of counsel for the Lessee (which may be Lessee's General Counsel),
dated the Purchase Option Date, which (subject to customary qualifications)
shall be to the effect that, after giving effect to the indenture supplement
referred to below:

                      (i) this Agreement, as supplemented by the indenture
         supplement described in clause (c) below, constitutes the legal, valid
         and binding obligation of the Lessee, enforceable against the Lessee in
         accordance with its terms, except as the same may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or

                                       47
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         similar laws affecting the rights of creditors generally and by general
         principles of equity, and except as limited by applicable laws which
         may affect the remedies provided for in this Agreement, which laws,
         however, do not in the opinion of such counsel make the remedies
         provided for in this Agreement inadequate for the practical realization
         of the rights and benefits provided for in this Agreement;

                           (ii)    the Aircraft is duly registered in
         compliance with applicable law;

                           (iii)   the indenture supplement described in clause
         (c) below has been duly filed with the FAA and is in due form for
         recording with the FAA, the Lien on the Aircraft constitutes a fully
         perfected Lien and all other filing, recording or other action
         (specifying the same) necessary to perfect and protect the Lien of this
         Agreement has been accomplished;

                           (iv)    the Indenture Trustee would be entitled to
         the benefits of Section 1110 of the Bankruptcy Code with respect to the
         Aircraft; provided that such opinion may contain qualifications of the
                   --------
         tenor contained in the opinion of special counsel for the Lessee
         delivered pursuant to Section 3(a)(vii) in the Note Purchase Agreement;

                           (v)     no Noteholder will be required to recognize
         income, gain or loss for tax purposes in connection with such
         assumption;

                  (c) the Lessee shall have executed and delivered an indenture
supplement hereto, dated the Purchase Option Date, whereby, among other things:

                                   (i)   the Lessee shall assume all of the
                  obligations of the Owner Trustee with respect to the Equipment
                  Notes as full recourse obligations of the Lessee;

                                   (ii)  the Lessee shall reaffirm that it has
                  acquired the Aircraft and the Indenture Estate subject to the
                  liens and security interests granted pursuant to the Indenture
                  with respect to the Indenture Estate;

                                   (iii) the Lessee shall warrant and covenant
                  to defend its title to the Indenture Estate and the validity,
                  perfection and priority of the Lien granted pursuant to this
                  Agreement, as supplemented by the indenture supplement
                  executed and delivered by the Lessee;

                                   (iv)  the Lessee shall covenant to: (A) (1)
                  register, maintain, use and operate, reregister, possess and
                  place appropriate insignia on the Aircraft only

                                       48
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  as would be permitted pursuant to Section 7 of the Lease, (2)
                  maintain insurance coverage as and to the extent as would be
                  required by Section 11 of the Lease, (3) apply insurance and
                  requisition proceeds in the manner as would be required by
                  Section 10 of the Lease, and (4) make any replacements,
                  pooling arrangements, alterations, modifications, and
                  additions as would be permitted by Section 8 of the Lease, in
                  each case, with such changes as may be appropriate to reflect
                  the ownership of the Aircraft by the Lessee and the
                  termination of the Lease, (B) not directly or indirectly
                  create, incur, assume, permit or suffer to exist any Liens
                  with respect to the Indenture Estate other than Permitted
                  Liens, and (C) pay all taxes, fees and charges in connection
                  with its purchase of the Aircraft, termination of the Lease
                  and assumption of the Equipment Notes, including, without
                  limitation, in connection with the maintenance and perfection
                  of the Indenture Trustee's security interest in the Aircraft
                  and the Indenture Estate;

                                    (v)  additional Indenture Events of Default
                  will be added substantially equivalent to, and consistent
                  with, the Lease Events of Default contained in Section 14 of
                  the Lease; and

                                    (vi) such terms, covenants, conditions and
                  provisions of this Agreement shall be deleted as reasonably
                  requested by the Indenture Trustee and such terms, covenants,
                  conditions and provisions of the Lessee shall be added
                  substantially equivalent to, and consistent with, the
                  obligations of the Lessee under the Operative Documents;

                  (d) after giving effect to the indenture supplement described
in clause (c) above, no Indenture Event of Default or Indenture Default under
Section 8.01(a), (f) or (g) shall have occurred and be continuing immediately
subsequent to such purchase and assumption and the Indenture Trustee shall have
received an officer's certificate from the Lessee, dated the Purchase Option
Date, to such effect;

                  (e) the purchase and assumption shall comply in all material
respects with all applicable laws, including, without limitation, securities
laws;

                  (f) after giving effect to such purchase and assumption, no
Lien other than Permitted Liens shall exist upon the Indenture Estate and the
Indenture Trustee shall have received evidence of the insurances required to be
maintained by the Lessee as set forth in the indenture supplement described in
clause (c) above; and

                  (g) the Indenture Trustee shall have received evidence of all
filings, recordings and other actions referred to in the opinions of counsel
described above.

                                       49
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         then, automatically and without the requirement of further action by
         any Person, effective as of the Purchase Option Date, the Owner Trustee
         shall be released from all of its obligations under the Agreement in
         respect of the Equipment Notes or otherwise (other than any obligations
         or liabilities of the Owner Trustee in its individual capacity incurred
         on or prior to the Purchase Option Date or arising out of or based upon
         events occurring on or prior to the Purchase Option Date, which
         obligations and liabilities shall remain the sole responsibility of the
         Owner Trustee).

                  If, concurrent with an assumption pursuant to this Section
7.03, the Aircraft is being reregistered the Lessee must comply with the
provisions of Section 7.02 hereof.

                  Section 7.04.  Selection of Funding Period. With respect to
                                 ---------------------------
Existing Equipment Notes only:

                  (a) The election by Lessee of each Funding Period shall be
subject to the provisions of this Section 7.04. Within two Business Days of the
announcement of the applicable Debt Rate for the new Funding Period, Owner
Participant shall deliver to Lessee and the Indenture Trustee a certificate of
an authorized representative of Owner Participant (the "Funding Period Equipment
Note") setting forth the proposed revised schedules of Basic Rent, Stipulated
Loss Value percentages and Termination Value percentages. Within one Business
Day of its receipt of the Funding Period Equipment Note, Lessee may demand a
verification, pursuant to Exhibit E of the Original Lease, of the information
set forth in the Funding Period Equipment Note. Upon the acceptance by Lessee of
the accuracy of the information set forth in the Funding Period Equipment Notes
or the determination pursuant to such verification procedures of such
information, Owner Participant and Lessee will execute an amendment to the Lease
setting forth the new Basic Rent, Stipulated Loss Value percentages and
Termination Value percentages, and, Owner Participant will exchange new Annex A
attachments to the Existing Equipment Notes containing revised amortization
schedules for the Annex A attachments to the Existing Equipment Notes
outstanding immediately prior to such revisions.

                  (b) In connection with adjustments of Basic Rent, and
Stipulated Loss Value percentages and Termination Value percentages pursuant to
this Section 7.04 and Section 3(c) of the Lease, (i) the Indenture Trustee will
agree to changes in the Amortization Schedule of the Existing Equipment Notes
and (ii) each Existing Equipment Note Holder will exchange the Annex A attached
to its Existing Equipment Notes for new Annex A attachments containing revised
Amortization Schedules; provided, that such changes do not (X) change the final
                        --------
maturity of any Existing Equipment Notes or (Y) reduce Basic Rent or the
Stipulated Loss Value or Termination Value percentages below the amount
necessary (together with all other amounts simultaneously payable by Lessee) to
permit payment of all amounts payable pursuant to the Existing Equipment Notes
or (Z) increase or decrease by more than six months the weighted average lives
of the Existing Equipment Notes as of the date of their original issuance.

                                       50
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (c) The Lessee shall pay, on a net after-tax basis, all of the
reasonable  expenses  of all  parties  to such  adjustments,  including  without
limitation, the reasonable fees and expenses of such parties' counsel.

                                   ARTICLE 8

                             DEFAULTS AND REMEDIES

                  Section 8.01.  Indenture Events of Default. Subject to Section
                                 ---------------------------
2.11(b), the following events shall constitute "Indenture Events of Default"
under this Agreement (whether any 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):

                  (a)  Owner Trustee shall fail to pay (i) any amount of
principal, Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), if any, or interest on any
Equipment Note when due and payable by the Owner Trustee under such Equipment
Note (whether upon redemption or purchase, final maturity, acceleration or
otherwise) and such failure shall continue unremedied for 10 days after such
amount shall have become due and payable by the Owner Trustee under such
Equipment Note or (ii) any other amount payable by Owner Trustee hereunder or
under the Participation Agreement to any Noteholder or any Indenture Indemnitee
when due and payable and such failure shall continue unremedied for 15 days
after receipt by Owner Trustee of written notice from the Indenture Trustee;
provided that, in each case, if such failure to pay results from a Lease Default
or Lease Event of Default, then such failure to pay shall for all purposes of
this Indenture be an Event of Default under Section 8.01(e) and not this Section
8.01(a); or

                  (b)  any Lien or encumbrance required to be discharged by the
Owner Trustee, in its individual capacity or by the Owner Participant pursuant
to Section 8(g) of the Participation Agreement shall remain undischarged for a
period of 30 calendar days after notice thereof has been given by the Indenture
Trustee to the Owner Trustee and the Owner Participant; or

                  (c)  other than as provided in paragraphs (a) or (b) above,
any failure by the Owner Trustee, in its individual capacity or as Owner
Trustee, to observe or perform any other covenant or obligation of the Owner
Trustee for the benefit of the Noteholders or any Indenture Indemnitee contained
in this Agreement, any Equipment Note, or the Participation Agreement or any
failure by the Owner Participant to observe or perform any other covenant or
obligation of the Owner Participant for the benefit of the Noteholders or any
Indenture Indemnitee contained in the Participation Agreement which failure is
not remedied within a period of 30 days after

                                       51
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

there has been given to the Owner Trustee and the Owner Participant by
registered or certified mail, a written notice specifying such failure and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder, by the Indenture Trustee or, subject to Section 2.6 of the
Intercreditor Agreement, by the Noteholders of at least 25% in principal amount
of outstanding Equipment Notes; provided, however, that, if the Owner Trustee,
                                --------  -------
in its individual capacity or as Owner Trustee, or the Owner Participant shall
have undertaken to cure any such failure and, notwithstanding the reasonable
diligence of any of them in attempting to cure such failure, such failure is not
cured within said 30 day period but is curable with future due diligence, there
shall exist no Indenture Event of Default as a consequence of such failure so
long as the Owner Trustee in its individual capacity or as Owner Trustee or the
Owner Participant is proceeding with due diligence to cure such failure, there
exists no adverse effect on the Lien of this Agreement and such failure is in
fact cured within a further period of 90 days; or

                  (d) any representation or warranty made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by the Owner Participant
under the Participation Agreement, or by the Owner Trustee hereunder, or by the
Owner Trustee, in its individual capacity or as Owner Trustee, or by the Owner
Participant in any document or Equipment Note furnished to the Indenture Trustee
in connection herewith or therewith or pursuant hereto or hereto, shall prove at
any time to have been incorrect in any material respect as of the date made and
such incorrectness shall remain material at the date of the notice referred to
below and such incorrectness shall continue unremedied for a period of 30 days
after there has been given to the Owner Trustee and the Owner Participant by
registered or certified mail, a written notice specifying such incorrectness and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder, by the Indenture Trustee or, subject to Section 2.6 of the
Intercreditor Agreement, by the Noteholders of at least 25% in principal amount
of outstanding Equipment Notes; or

                  (e) there shall be a Lease Event of Default other than any
such Lease Event of Default arising by reason of nonpayment of any Excluded
Payments when due; or

                  (f) either the Trust Estate or the Owner Trustee with respect
thereto (and not in its individual capacity) or the Owner Participant or the
Owner Participant Guarantor, if any, 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 appointment of a custodian, receiver, trustee or other officer
with similar powers of itself or any substantial part of its property; provided
                                                                       --------
that an event referred to in this Section 8.01(f) with respect to the Owner
Participant or Owner Participant Guarantor shall not constitute an Indenture
Event of Default if, within 30 days, an order, judgment or decree shall be
entered in a proceeding by a court or a trustee, custodian, receiver or
liquidator which is either final and non-appealable or has not been

                                       52
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

stayed pending any appeal, to the effect that no part of the Trust Estate
created by the Trust Agreement (except for the Owner Participant's beneficial
interest in such Trust Estate) and no right, title or interest under the
Indenture Estate shall be included in, or be subject to, any declaration or
adjudication of, or proceedings with respect to the bankruptcy, insolvency or
liquidation of the Owner Participant or Owner Participant Guarantor referred to
in this Section 8.01(f); or

                  (g) 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) or the Owner Participant or the Owner Participant Guarantor, if any,
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) or the
Owner Participant or the Owner Participant Guarantor, if any, 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; provided that an event referred to in this Section 8.01(g) with
          --------
respect to the Owner Participant shall not constitute an Indenture Event of
Default if, within 30 days, an order, judgment or decree shall be entered in a
proceeding by a court or a trustee, custodian, receiver or liquidator which is
either final and non-appealable or has not been stayed pending an appeal, to the
effect that no part of the Trust Estate created by the Trust Agreement (except
for the Owner Participant's beneficial interest in such Trust Estate) and no
right, title or interest under the Indenture Estate shall be included in, or be
subject to, any declaration or adjudication of, or proceedings with respect to,
the bankruptcy, insolvency or liquidation of the Owner Participant or Owner
Participant Guarantor referred to in this Section 8.01(g).

                  Section 8.02.  Acceleration; Rescission and Annulment. If an
                                 --------------------------------------
Indenture Event of Default under Section 8.01(f) or 8.01(g) or a Lease Event of
Default under Section 14(f) or 14(g) of the Lease shall have occurred and is
continuing, then the principal of the Equipment Notes, together with accrued but
unpaid interest thereon, and all other amounts due thereunder and hereunder
shall immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived, and if any other Indenture Event of
Default occurs and is continuing, either the Indenture Trustee, by notice to the
Lessee and the Owner Trustee or, subject to Section 2.6 of the Intercreditor
Agreement, Noteholders of at least 25% in principal amount of outstanding
Equipment Notes, by notice to the Lessee, the Indenture Trustee, the Owner
Trustee and the Owner Participant, may declare the principal of all the
Equipment Notes to be immediately due and payable. 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, but without

                                       53
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Make-Whole Amount or premium, shall be immediately due and payable without
presentment, demand, protest or other notice, all of which are hereby waived. At
any time after such declaration and prior to the sale or disposition of the
Indenture Estate, a Majority-in-Interest of Noteholders, by notice to the
Indenture Trustee, the Lessee, the Owner Trustee and the Owner Participant, may
rescind such a declaration and thereby annul its consequences if (i) an amount
sufficient to pay all principal on any Equipment Notes which have become due
otherwise than by such declaration and any interest thereon and interest due or
past due, if any, and all sums due and payable to the Indenture Trustee have
been deposited with the Indenture 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 Agreement 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 such rescission shall affect
any subsequent default or impair any right consequent thereon.

                  Section 8.03. Other Remedies Available to Indenture Trustee.
                                ---------------------------------------------
(a) After an Indenture Event of Default shall have occurred and so long as such
Indenture Event of Default shall be continuing, then and in every such case the
Indenture Trustee, as trustee of an express trust and as assignee hereunder of
the Lease or as holder of a security interest in the Aircraft or Engines or
otherwise, may, and when required pursuant to the provisions of Article 9 shall,
exercise, subject to Sections 8.03(b), 8.03(e), 8.03(f) and 8.03(h), any or all
of the rights and powers and pursue any and all of the remedies accorded to the
Owner Trustee pursuant to Section 15 of the Lease and this Article 8, may
recover judgment in its own name as Indenture Trustee against the Indenture
Estate and may take possession of all or any part of the Indenture Estate and
may exclude the Owner Trustee and the Owner Participant and all Persons claiming
under any of them wholly or partly therefrom.

                  (b) After an Indenture Event of Default shall have occurred
and so long as such Indenture Event of Default shall be continuing, subject to
Sections 8.03(e), 8.03(f) and 8.03(h), the Indenture Trustee may, if at the time
such action may be lawful and always subject to compliance with any mandatory
legal requirements, either with or without taking possession, and either before
or after taking possession and without instituting any legal proceedings
whatsoever, and having first given notice of such sale, assignment, transfer
and/or delivery by registered mail to the Owner Trustee, the Owner Participant
and the Lessee at least 30 days prior to the date of such sale, and any other
notice which may be required by law, sell, assign, transfer, deliver and dispose
of the Indenture Estate, or any part thereof, or interest therein, at public
auction or private sale, in one lot as an entirety or in separate lots, and
either for cash or on credit and on such terms as the Indenture Trustee may
determine, and at any place (whether or not it be the location of the Indenture
Estate or any part thereof) and time designated in the notice above referred to;
provided, however, that, notwithstanding any provision herein to the contrary,
--------  -------
the Indenture Trustee may not provide the notice provided for above of its
intention to sell, assign, transfer or deliver any of the Indenture Estate,
exercise remedies under the Lease or exercise other remedies

                                       54
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

against the Indenture Estate seeking to deprive the Owner Trustee or the Owner
Participant of its rights therein unless a declaration of acceleration has been
made pursuant to Section 8.02 or the Equipment Notes have otherwise theretofore
become due and payable through redemption or otherwise. Any such sale or sales
may be adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned sale or sales,
without further notice, and the Indenture Trustee and the Noteholder or
Noteholders of any Equipment Notes, or any interest therein, may bid and become
the purchaser at any such sale and each Noteholder shall be entitled at any sale
to credit against any purchase price bid at such sale by such Noteholder all or
any part of the unpaid Secured Obligations owing to such Noteholder secured by
the Lien of this Indenture. No such sale may be consummated if the Owner Trustee
or the Owner Participant shall, prior to the consummation thereof, have given
notice pursuant to and made the deposit required by, and in accordance with,
Section 8.03(e)(ii). The Indenture Trustee may exercise such right without
possession or production of the Equipment Notes or proof of ownership thereof,
and as representative of the Noteholders may exercise such right without notice
to the Noteholders or including the Noteholders as parties to any suit or
proceeding relating to foreclosure of any property in the Indenture Estate. The
Owner Trustee hereby irrevocably constitutes the Indenture Trustee the true and
lawful attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee
or otherwise) for the purpose of effectuating any sale, assignment, transfer or
delivery for enforcement of the lien created under this Agreement, whether
pursuant to foreclosure or power of sale or otherwise, to execute and deliver
all such bills of sale, assignments and other instruments as the Indenture
Trustee may consider necessary or appropriate, with full power of substitution,
the Owner Trustee hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. Nevertheless, if so requested by
the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture 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.

                  (c) Subject to Sections 8.03(b), 8.03(e), 8.03(f) and 8.03(h)
if an Indenture Event of Default has occurred and is continuing, the Owner
Trustee shall, at the request of the Indenture Trustee, promptly execute and
deliver to the Indenture Trustee such instruments of title or other documents as
the Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Indenture Estate. If the Owner
Trustee shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee, the Indenture Trustee
shall be entitled, in a proceeding to which the Owner Trustee will be a
necessary party, to a judgment for specific performance of the covenants
contained in the foregoing sentence, conferring upon the Indenture Trustee the
right to immediate possession and requiring the Owner Trustee to execute and
deliver such instruments and documents to the Indenture Trustee. The Indenture
Trustee shall also be entitled to pursue all or any part of the

                                       55
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Indenture Estate wherever it may be found and may enter any of the premises of
the Owner Trustee or any other Person wherever the Indenture Estate may be or be
supposed to be and search for the Indenture Estate and take possession of any
item of the Indenture Estate pursuant to this Section 8.03(c). The Indenture
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 Indenture Estate, as it
may deem proper. In each such case, the Indenture Trustee shall have the right
to maintain, use, insure, operate, store, lease, control or manage the Indenture
Estate, and to carry on business and exercise all rights and powers of the Owner
Trustee relating to the Indenture Estate as the Indenture Trustee shall deem
appropriate, including the right to enter into any and all such agreements with
respect to the maintenance, use, insurance, operation, storage, leasing, control
or management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, revenues and other income of the
Indenture Estate and every part thereof, without prejudice, however, to the
right of the Indenture Trustee under any provision of this Agreement to collect
and receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder. In accordance with the terms of this Section 8.03(c), such
tolls, rents (including Rent), issues, profits, products, revenues and other
income shall be applied to pay the expenses of using, operating, storing,
leasing, controlling or managing the Indenture Estate, and of all maintenance,
insurance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee and, to the extent permitted by the Lease, the
Lessee), and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Agreement, including this Section
8.03(c), as well as just and reasonable compensation for the services of the
Indenture Trustee, and of all persons properly engaged and employed by the
Indenture Trustee.

                  If an Indenture Event of Default occurs and is continuing and
the Indenture Trustee shall have obtained possession of or title to the
Aircraft, the Indenture Trustee shall not be obligated to use or operate the
Aircraft or cause the Aircraft to be used or operated directly or indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of the Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its discretion
to protect the Indenture Estate and the Indenture Trustee, as trustee and
individually, against any and all liability for loss or damage to the Aircraft
and for public liability and property damage resulting from use or operation of
the Aircraft and (ii) funds are available in the Indenture Estate to pay for all
such insurance or, in lieu of such insurance, the Indenture Trustee is furnished
with indemnification from the Noteholders or any other Person upon terms and in
amounts satisfactory to the Indenture Trustee in its discretion to protect the

                                       56
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all such liabilities.

                  (d)  Subject to Sections 8.03(b), 8.03(e), 8.03(f) and
8.03(h), the Indenture Trustee may proceed to protect and enforce this Agreement
and the Equipment Notes by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted;
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the Indenture Estate or any part thereof, or for the recovery of judgment
for the indebtedness secured by the Lien created under this Agreement or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.

                  (e)  (i) If the Lessee shall fail to make any payment of Basic
Rent under the Lease within 15 days after the same shall become due, and if such
failure of the Lessee to make such payment of Basic Rent shall not constitute
the fourth consecutive such failure or the seventh cumulative such failure, then
as long as no Indenture Event of Default (other than arising from such failure
to pay Basic Rent) shall have occurred and be continuing, the Owner Participant
or the Owner Trustee may (but need not) pay to the Indenture Trustee, at any
time prior to the expiration of a period of 15 days (the "15-Day Cure Period")
after the later to occur of (x) the expiration of the 15-day period during which
the Lessee failed to make such payment of Basic Rent and (y) the exercise of any
remedies by the Indenture Trustee pursuant to Section 15 of the Lease or under
this Agreement (prior to the expiration of the 15-Day Cure Period the Indenture
Trustee shall not declare the Lease in default pursuant to Section 15 thereof or
exercise any of the rights, powers or remedies pursuant to such Section 15 or
this Article 8), an amount equal to the full amount of such payment of Basic
Rent, together with any interest due thereon on account of the delayed payment
thereof, and such payment by the Owner Participant or the Owner Trustee shall be
deemed to cure any Indenture Event of Default which arose from such failure of
the Lessee (but such cure shall not relieve the Lessee of any of its
obligations). If the Lessee shall fail to perform or observe any other covenant,
condition or agreement to be performed or observed by it under the Lease other
than with respect to Excluded Payments, and if (but only if) the performance or
observance thereof can be effected by the payment of money alone (it being
understood that actions such as the obtaining of insurance and the procurement
of maintenance services can be so effected), then as long as no other Indenture
Event of Default shall have occurred and be continuing, the Owner Participant or
the Owner Trustee may (but need not) pay to the Indenture Trustee (or to such
other person as may be entitled to receive the same), at any time prior to the
expiration of a period of 15 days after the expiration of the grace period, if
any, provided with respect to such failure on the part of the Lessee in Section
14 of the Lease (prior to the expiration of which 15-day period the Indenture
Trustee shall not declare the Lease in default pursuant to Section 15 thereof or
exercise any of the rights, powers or remedies pursuant to such Section 15 or
this Article 8), all sums necessary to effect the performance or observance of
such covenant or agreement of the Lessee, together with any interest due thereon

                                       57
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

on account of the delayed payment thereof, and such payment by the Owner
Participant or the Owner Trustee shall be deemed to cure any Indenture Event of
Default which arose from such failure of the Lessee (but such cure shall not
relieve the Lessee of any of its obligations). Upon any payment of Basic Rent by
the Owner Participant or the Lessor in accordance with the first sentence of
this Section 8.03(e)(i), or upon any payment of any other sums by the Owner
Participant or the Owner Trustee in accordance with the second sentence of this
Section 8.03(e)(i), the Owner Participant or the Owner Trustee shall, to the
extent of their respective payments, be subrogated, in the case of any such
payment, in accordance with such first sentence, to the rights of the Indenture
Trustee, as assignee hereunder of the Owner Trustee, or, in the case of any such
payment in accordance with such second sentence, to the rights of the Indenture
Trustee (but shall have no rights as secured party hereunder) or such other
person, as the case may be, which actually received such payment, to receive
such payment of Basic Rent or such other payment, as the case may be (and any
interest due thereon on account of the delayed payment thereof), and shall be
entitled to receive such payment upon its receipt by the Indenture Trustee or
such other person, as aforesaid (but in each case only if all amounts of
principal, Make-Whole Amount, if any, and interest at the time due and payable
on the Equipment Notes shall have been paid in full); provided that neither the
                                                      --------
Owner Participant nor the Owner Trustee shall attempt to recover any such amount
paid by it on behalf of the Lessee pursuant to this Section 8.03(e)(i) except by
demanding of the Lessee payment of such amount or by commencing an action
against the Lessee to require the payment of such amount.

                           (ii) In the event that (A) at any time one or more
         Lease Events of Default shall have occurred and be continuing for a
         period of 120 days or more, or (B) the Equipment Notes shall have
         become due and payable pursuant to Section 8.02 or (C) Owner
         Participant has received notice from the Indenture Trustee that the
         Indenture Trustee intends to foreclose the Lien of this Indenture or to
         exercise any other dispossessory remedy specified in Sections 8.02 or
         8.03 hereof or Section 15 of the Lease, the Owner Trustee or the Owner
         Participant may, at its option, give at least 26 days' prior
         irrevocable notice to the Indenture Trustee that the Owner Trustee or
         the Owner Participant will redeem or purchase all Equipment Notes then
         outstanding on the date specified in such notice and, concurrently with
         such notice, the Owner Trustee or the Owner Participant will deposit
         with the Indenture Trustee an amount sufficient to redeem or purchase
         at the applicable Redemption Price determined consistently with the
         applicable provisions of Article 6 all Equipment Notes then Outstanding
         and to pay the Indenture Trustee all amounts then due it hereunder,
         which funds shall be held by the Indenture Trustee as provided in
         Section 9.04. Upon the giving of such notice and the receipt by the
         Indenture Trustee of such deposit, the Indenture Trustee shall (y) deem
         all instructions received from the Owner Trustee as having been given
         by the Noteholders of 100% of the outstanding principal amount of
         Equipment Notes for all purposes of this Indenture and (z) shall not
         declare the Lease in default pursuant to Section 15 thereof or exercise
         any of the rights, powers or remedies pursuant to such Section 15 or
         this

                                       58
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         Article 8 prior to the occurrence of the applicable Redemption Date. If
         such notice is given, the Owner Trustee further agrees that it will
         deposit or cause to be deposited with the Indenture Trustee, on or
         prior to the Business Day preceding the applicable Redemption Date,
         whether or not an Indenture Event of Default is then continuing, funds
         sufficient, when added to the funds already held by the Indenture
         Trustee for such purpose, to redeem or purchase at the applicable
         Redemption Price on such Redemption Date all Equipment Notes then
         outstanding and to pay the Indenture Trustee all amounts then due it
         hereunder. No Make-Whole Amount shall be payable by the Owner Trustee
         or the Owner Participant in connection with a redemption or purchase of
         the Equipment Notes under this Section 8.03(e)(ii).

                           (iii)  Anything in this Agreement to the contrary
         notwithstanding, the Indenture Trustee shall not be entitled to
         exercise any remedy hereunder as a result of an Indenture Event of
         Default which arises solely by reason of one or more events or
         circumstances which constitute a Lease Event of Default unless the
         Indenture Trustee as security assignee of the Owner Trustee shall have
         exercised or concurrently be exercising one or more of the
         dispossessory remedies provided for in Section 15(a)-(f) of the Lease
         with respect to the Aircraft; provided, however, that such requirement
                                       --------  -------
         to exercise one or more of such remedies under the Lease shall not
         apply in circumstances where the Indenture Trustee is, and has been,
         for a continuous period in excess of 60 days as specified in Section
         1110(a)(l)(A) of the Bankruptcy Code (such 60-day 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, however, 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 (A) 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 cures any default (other than a default of a kind specified in
         Section 365(b)(2) of the Bankruptcy Code) within the applicable time
         period specified in Section 1110(a)(2)(B) of the Bankruptcy Code or (B)
         is an extension of the Section 1110 Period with the consent of the
         Indenture Trustee pursuant to Section 1110(b) of the Bankruptcy Code or
         (C) is the consequence of the Indenture Trustee's own failure to give
         any requisite notice to any person (unless the Indenture Trustee is
         stayed or otherwise precluded by applicable law from giving such
         notice). References in this subsection (iii) to particular sections of
         the Bankruptcy Code as in effect on the date of the amendment and
         restatement of this Indenture shall include any substantially similar
         successor provisions.

                                       59
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (f)  Notwithstanding any provision of this Agreement to the
contrary, including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d),
as long as no Lease Event of Default shall have occurred and be continuing,
neither the Indenture Trustee nor the Owner Trustee shall take any action in
violation of the Lessee's rights under the Lease, including, without limitation,
(x) the right to receive all monies due and payable to it in accordance with the
provisions of the Lease and (y) the Lessee's rights to possession and use of,
and of quiet enjoyment of, the Aircraft.

                  (g)  Each and every right, power and remedy herein given to
the Indenture Trustee specifically or otherwise in this Agreement 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 in
such order as may be deemed expedient by the Indenture 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 Indenture Trustee in the
exercise of any right, remedy or power or in pursuing 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.

                  (h)  Notwithstanding anything contained herein to the
contrary, so long as the Subordination Agent (acting on behalf of the Pass
Through Trustees) or any Pass Through Trustee is a Noteholder, the Indenture
Trustee is not authorized or empowered to acquire title to the Indenture Estate,
or to take any action with respect to any of the Indenture Estate so acquired by
it, if such acquisition or action would cause any Pass Through Trust to fail to
qualify as a "grantor trust" for federal income tax purposes.

                  Section 8.04. Waiver of Owner Trustee. To the extent now or at
                                -----------------------
any time hereafter enforceable under applicable law, the Owner Trustee covenants
that it will not at any time insist upon or plead, or in any manner whatsoever
claim or take any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisal of the Indenture Estate or any
part thereof, prior to any sale or sales thereof to be made pursuant to any
provision herein contained, or prior to any applicable decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Owner Trustee acquiring any interest
in or title to the Indenture Estate or any part thereof subsequent to the date
of this Agreement, all benefit and advantage of any such law or laws, and
covenants that it will not invoke or utilize any such law or laws, but will
suffer and permit the execution of every such power as though no such law or

                                       60
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

laws had been made or enacted. Nothing in this Section 8.04 shall be deemed to
be a waiver by the Owner Trustee of its rights under Section 8.03(e).

                  The Indenture Trustee may maintain such a pleading, or, in any
manner whatsoever, claim or take any benefit or advantage of or from any law now
or hereafter in force even if it does not possess any of the Equipment  Notes or
does not  produce  any of them in the  proceeding.  A delay or  omission  by the
Indenture  Trustee or any Noteholder in exercising any right or remedy  accruing
upon an Indenture  Event of Default  under this  Agreement  shall not impair the
right or remedy or  constitute  a waiver of or  acquiescence  in such  Indenture
Event of Default.

                  Section  8.05.  Waiver of Existing Defaults. The Majority in
                                  ---------------------------
Interest of Noteholders by notice to the Indenture Trustee may waive on behalf
of the Noteholders an existing Indenture Default or Indenture Event of Default
and its consequences except (i) an Indenture Default or Indenture Event of
Default in the payment of the principal of or interest on any Equipment Note or
(ii) in respect of a covenant or provision hereof which pursuant to Section
11.02 cannot be amended or modified without the consent of each Noteholder
affected thereby.

                  Section  8.06.  Control by Majority. (a) Except as otherwise
                                  -------------------
expressly provided herein, the Majority in Interest of Noteholders may direct
the time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee or exercising any trust or power conferred on it by
this Agreement. However, the Indenture Trustee may refuse to follow any
direction that conflicts with law or this Agreement, that is unduly prejudicial
to the rights of the Noteholders so affected, or that would subject the
Indenture Trustee to personal liability.

                  (b)  The Owner Trustee may pursuant to the direction and
instruction of the Owner Participant by delivery of written notice to the
Indenture 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 purpose of determining whether Noteholders
holding the requisite percentage of 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

                                       61
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Agreement not later than one year after the
record date.

                  Section 8.07.  Rights of Noteholders to Receive Payment.
                                 ----------------------------------------
Notwithstanding any other provision of this Agreement the right of any
Noteholder to receive payment of principal of, Make-Whole Amount, if any, and
interest on such Equipment Note on or after the respective due dates expressed
in such Equipment Note, or 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.

                  Section 8.08.  Indenture Trustee May File Proofs of Claim. The
                                 ------------------------------------------
Indenture Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee and of the Noteholders allowed in any judicial proceedings relating to
any obligor on the Equipment Notes, its creditors, or its property.

                                   ARTICLE 9

                               INDENTURE TRUSTEE

                  Section 9.01.  Duties of Indenture Trustee. (a) The Indenture
                                 ---------------------------
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.

                  (b) Subject to the provisions of Sections 2.08 and 9.04, the
Indenture Trustee shall not be liable for interest on any money received except
as otherwise provided in any other Operative Document. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to the
extent required by law.

                  Section 9.02.  Rights of Indenture Trustee. (a) The Indenture
                                 ---------------------------
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.

                  (b)  Before the Indenture Trustee acts or refrains from
acting, it may consult with counsel or require an officer's certificate or an
opinion of counsel from the Lessee or the Owner Trustee after which it will take
such action or refrain from acting as it deems appropriate. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith and in accordance herewith in reliance on a resolution of the Board of
Directors of the Lessee, the written advice of counsel acceptable to the Owner
Trustee, the Lessee and the Indenture Trustee, officer's certificate or opinions
of counsel provided by the Lessee or the Owner Trustee.

                                       62
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (c)  The Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any such agent appointed
with due care; provided that, no such agents shall be appointed by the Indenture
               --------
Trustee without the consent of the Lessee and the Owner Trustee, which consent
shall, in each case, not be unreasonably withheld.

                  (d)  The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.

                  (e)  If an Indenture Event of Default under this Agreement has
occurred and is continuing, the Indenture Trustee shall exercise its rights and
powers under this Agreement, and shall use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.

                  Section 9.03.  Individual Rights of Indenture Trustee. The
                                 --------------------------------------
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Equipment Notes and may otherwise deal with the Owner Trustee, the
Lessee or an Affiliate of the Owner Trustee or the Lessee or a subsidiary of the
Owner Trustee or the Lessee with the same rights it would have if it were not
the Indenture Trustee. Any Agent may do the same with like rights.

                  Section 9.04.  Funds May Be Held by Indenture Trustee or
                                 -----------------------------------------
Paying Agent; Investments. Any monies (including, without limitation for purpose
-------------------------
of this Section 9.04, Permitted Investments constituting the proceeds of the
maturity, sale or other disposition of any Permitted Investment) held by the
Indenture Trustee or the Paying Agent hereunder as part of the Indenture Estate,
until paid out by the Indenture Trustee or the Paying Agent as herein provided,
(i) subject to clause (ii) below, may be carried by the Indenture Trustee or the
Paying Agent on deposit with itself or on deposit to its account with any bank,
trust company or national banking association incorporated or doing business
under the laws of the United States of America or one of the States thereof
having combined capital and surplus and retained earnings of at least
$75,000,000, and neither the Indenture Trustee nor the Paying Agent shall have
any liability for interest upon any such monies except as otherwise agreed in
writing or (ii) 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 Indenture 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 Indenture Trustee in trust as part of the Indenture Estate
until so sold; provided that the Lessee pursuant to Section 22 of the Lease, on
               --------
behalf of the Owner Trustee, as agent of the Owner Trustee, shall upon demand
pay to the Indenture 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

                                       63
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

entitled to receive from the Indenture Trustee, and the Indenture 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 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 shall be held as
part of the Indenture Estate and shall be applied by the Indenture 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. The Indenture
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
9.04. All Permitted Investments held by the Indenture Trustee or the Paying
Agent pursuant to this Section 9.04 shall either be (a) registered in the name
of, payable to the order of, or, specially indorsed to, the Indenture Trustee or
the Paying Agent, as the case may be, or (b) held in an Eligible Account. For
purposes of this Section 9.04, "Eligible Account" means an account established
by and with an Eligible Institution at the request of the Indenture Trustee or
the Paying Agent, as the case may be, which institution agrees, for all purposes
of the applicable Uniform Commercial Code ("UCC") including Article 8 thereof,
that (a) such account shall be a "securities account" (as defined in Section 8-
501 of the UCC), (b) all property (other than cash) credited to such account
shall be treated as a "financial asset" (as defined in Section 8-102(9) of the
UCC), (c) the Indenture Trustee or the Paying Agent, as the case may be, shall
be the "entitlement holder" (as defined in Section 8-102(7) of the UCC) in
respect of such account, (d) the Eligible Institution will comply with all
entitlement orders issued by the Indenture Trustee or the Paying Agent, as the
case may be, to the exclusion of the Lessee and the Owner Trustee, and (e) the
"securities intermediary jurisdiction" (under Section 8-110(e) of the UCC) shall
be the State of Illinois. For purposes of this Section 9.04, "Eligible
Institution" means the corporate trust department of (a) State Street Bank and
Trust Company of Connecticut, National Association, acting solely in its
capacity as a "securities intermediary" (as defined in Section 8-102(14) of the
UCC), or (b) a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any U.S. branch of a foreign bank), which has a long-term unsecured debt
rating from Moody's and Standard & Poor's of at least A-3 or its equivalent.

                  Section 9.05.  Notice of Defaults. If an Indenture Default or
                                 ------------------
Indenture Event of Default under this Agreement occurs and is continuing and the
Indenture Trustee has actual knowledge of same, the Indenture Trustee shall (i)
promptly send written notice thereof to the Lessee, the Owner Trustee and the
Owner Participant and (ii) within 90 days after the occurrence of an Indenture
Event of Default, mail to each Noteholder notice of all uncured Indenture Events
of Default under this Agreement. Except in the case of a default in the payment
of the principal of, Make-Whole Amount (on and after the Refinancing Date only),
if any, premium (prior to the Refinancing Date only), if any, or interest on any
Equipment Note, the Indenture Trustee shall be

                                       64
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

protected in withholding the notice required under clause (ii) above if and so
long as the executive committee or trust committee of directors of the Indenture
Trustee and/or responsible officers thereof in good faith determines that
withholding such notice is in the interest of the Noteholders. In addition, if
an Indenture Default under this Agreement occurs and is continuing and if the
Indenture Trustee has actual knowledge of same, the Indenture Trustee shall
promptly send written notice thereof by telecopier to the Lessee, the Owner
Trustee and the Owner Participant.

                  Section 9.06.  Compensation and Indemnity. (a) The Owner
Trustee shall pay to the Indenture Trustee from time to time (i) reasonable
compensation for its services, which compensation shall not be limited by any
law on compensation of a trustee of an express trust, (ii) reimbursement for all
reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement (including
the reasonable compensation and expenses of the Indenture Trustee's counsel and
any agent appointed in accordance with Section 9.02(c)), and (iii)
indemnification against any loss or liability incurred by it arising out of or
in connection with its acceptance or administration of the trust or trusts
hereunder except (A) as such expenses or loss or liability might result from the
negligence or willful misconduct of the Indenture Trustee or the inaccuracy of
any representation or warranty of the Indenture Trustee in its individual
capacity in Section 8 of the Participation Agreement, (B) as otherwise provided
in Section 9.10 hereof and (C) as otherwise excluded by the terms of Sections
7(b) and 7(c) of the Participation Agreement from the Lessee's indemnities under
said Sections; provided that the Indenture Trustee shall not make any claim
under this Section 9.06(a) for any claim or expense indemnified against by the
Lessee under the Participation Agreement without first making demand on the
Lessee for payment of such claim or expense. The Indenture Trustee shall notify
the Owner Trustee and the Lessee promptly of any claim for which it is entitled
to be indemnified hereunder. Subject to the conditions and procedures equivalent
to those set forth in Sections 7(b) and 7(c) of the Participation Agreement, the
Owner Trustee shall defend the claim and the Indenture Trustee shall cooperate
in the defense. The Indenture Trustee may have separate counsel and the Owner
Trustee shall pay the reasonable fees and expenses of such counsel. The Owner
Trustee need not pay for any settlement made without its and the Lessee's
consent.

                  (b) To secure the payment obligations of the Owner Trustee
pursuant to this Section 9.06, the Indenture Trustee shall have a Lien prior to
that of the Noteholders of the Equipment Notes on all money or property held or
collected by the Indenture Trustee, except that held in trust to pay the
principal of and interest, and Make-Whole Amount (on and after the Refinancing
Date only), if any, or premium (prior to the Refinancing Date only), if any, on
the Equipment Notes.

                  Section 9.07.  Replacement of Indenture Trustee. (a) The
                                 --------------------------------
resignation or removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee shall become

                                       65
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

effective only upon the successor Indenture Trustee's acceptance of appointment
as provided in this Section.

                  (b)  The Indenture 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 Indenture Trustee by giving at least 30
days' prior written notice to the Indenture Trustee, the Owner Trustee and the
Lessee and may appoint a successor Indenture Trustee for such Equipment Notes
with the Owner Trustee's and (so long as no Lease Event of Default is
continuing) the Lessee's consent. The Owner Trustee may remove the Indenture
Trustee if:

                  (1)  the Indenture Trustee fails to comply with Section 9.09;

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

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

                  (4)  the Indenture Trustee becomes incapable of acting.

                  (c)  If a vacancy exists in the office of Indenture Trustee
for any reason, the Owner Trustee shall promptly appoint a successor Indenture
Trustee which will (so long as no Lease Event of Default is continuing) be
approved by the Lessee.

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

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

                  (f)  A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Lessee
and to the Owner Trustee. Thereupon, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
for which the successor Indenture Trustee is to be acting as Indenture Trustee
under this Agreement. The retiring Indenture Trustee shall promptly transfer all
property and all books and records relating to the administration of the
Indenture Estate held by it as Indenture Trustee to the successor Indenture
Trustee subject to the Lien provided for in Section 9.06. The Lessee shall give
notice of each appointment of a successor Indenture Trustee if there are

                                       66
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Equipment Notes outstanding, by mailing written notice of such event by first-
class mail to the Noteholders.

                  (g)  All provisions of this Section 9.07 except subparagraphs
(b)(l) and (e) and the words "subject to the lien provided for in Section 9.06"
in subparagraph (f) shall apply also to any Paying Agent.

                  Section 9.08.  Successor Indenture Trustee, Agents by Merger,
                                 ----------------------------------------------
etc. If the Indenture Trustee or any Agent 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 Indenture Trustee or Agent, as the case may be.

                  Section 9.09.  Eligibility; Disqualification. This Agreement
                                 -----------------------------
shall at all times have an Indenture Trustee which (i) shall have a combined
capital and surplus of at least $75,000,000 or (ii) shall have a combined
capital and surplus in excess of $7,500,000 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, and which, in any
case, shall be a Citizen of the United States. 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 9.09, 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 Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.09, the Indenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07.

                  Section 9.10.  Trustee's Liens. The Indenture 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 Indenture Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.

                                       67
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                                  ARTICLE 10

                        TERMINATION OF TRUST INDENTURE

                  Section 10.01.   Termination of Indenture. Subject to Section
                                   ------------------------
10.02, upon (or at any time after):

                  (x)  payment in full of the outstanding principal amount of,
         Make-Whole Amount (on and after the Refinancing Date only), if any,
         premium (prior to the Refinancing Date only), if any, and interest on
         and all other amounts due under all Equipment Notes and provided that
         all other Secured Obligations due to the Noteholders and the Indenture
         Indemnitees shall have been satisfied or paid in full; or

                  (y)  at any time after the Owner Trustee has irrevocably
         deposited (except as provided in Section 10.04) with the Indenture
         Trustee as funds in trust, specifically pledged as security for, and
         dedicated solely to, the benefit of the Noteholders, (1) money in an
         amount, or (2) Permitted Investments which, through the payment of
         interest and principal in respect thereof in accordance with their
         terms, will provide (not later than one Business Day before the due
         date of any payment referred to below in this paragraph) money in an
         amount, or (3) a combination of money and Permitted Investments
         referred to in the foregoing clause (2), sufficient, in the opinion of
         a nationally recognized firm of independent certified public
         accountants expressed in a written certification thereof delivered to
         the Indenture Trustee, to pay in full the outstanding principal amount
         of, Make-Whole Amount (on and after the Refinancing Date only), if any,
         premium (prior to the Refinancing Date only), if any, and interest on
         the Equipment Notes on the dates such amounts are due (including as a
         result of redemption in respect of which irrevocable notice has been
         given to the Indenture Trustee on or prior to the date of such
         deposit); provided, however, that

                           (A)  upon the making of the deposit referred to above
                  in this clause (y), the right of the Owner Trustee or the
                  Lessee to cause the redemption of Equipment Notes (except a
                  redemption in respect of which irrevocable notice has
                  theretofore been given) shall terminate;

                           (B)  the Lessee on behalf of the Owner Trustee has
                  delivered to the Indenture Trustee an officer's certificate
                  and an opinion of counsel to the effect that there has been
                  published by the Internal Revenue Service a ruling to the
                  effect that Noteholders will not recognize income, gain or
                  loss for Federal income tax purposes as a result of the
                  exercise by the Owner Trustee of its option under Clause (y)
                  of this Section 10.01 and will be subject to Federal income
                  tax on the

                                       68
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  same amount and in the same manner and at the same times, as
                  would have been the case if such option had not been
                  exercised;

                           (C)  all amounts then due and payable hereunder have
                  been paid; and

                           (D)  the Lessee on behalf of the Owner Trustee has
                  delivered to the Indenture Trustee an officer's certificate
                  and an opinion of counsel, each stating that all conditions
                  precedent provided for relating to the satisfaction and
                  discharge of this Agreement contemplated by this Section 10.01
                  have been complied with;

the Owner Trustee shall direct the Indenture Trustee to execute and deliver to
or as directed in writing by the Owner Trustee an appropriate instrument
releasing the Aircraft and the Engines and all other property or proceeds
constituting part of the Indenture Estate from the Lien of this Agreement and
the Indenture Trustee shall execute and deliver such instrument as aforesaid;
provided, however, that this Agreement and the trusts created hereby shall
earlier terminate and this Agreement shall be of no further force or effect upon
any sale or other final disposition by the Indenture Trustee of all property
constituting part of the Indenture Estate and the final distribution by the
Indenture Trustee of all monies or other property or proceeds constituting part
of the Indenture Estate in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.

                  Section 10.02.  Survival of Certain Obligations.
                                  -------------------------------
Notwithstanding the provisions of Section 10.01, the obligations of the
Indenture Trustee contained in Sections 2.01 through 2.08, Section 7.01, Section
9.10, Section 10.03 and Section 10.04 and the other rights, duties, immunities
and privileges hereunder of the Indenture Trustee shall survive.

                  Section 10.03.  Monies to Be Held in Trust. All moneys and
                                  --------------------------
Permitted Investments deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Equipment Notes and this Agreement, to the payment either
directly or through any Paying Agent, as the Indenture Trustee may determine, to
the Noteholders, of all sums due and to become due thereon for principal, Make-
Whole Amount (on and after the Refinancing Date only), if any, premium (prior to
the Refinancing Date only), if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.

                  Section 10.04.  Monies to Be Returned to Owner Trustee. The
                                  --------------------------------------
Indenture Trustee and any Paying Agent shall promptly pay or return to the Owner
Trustee upon request of the Owner Trustee any money or Permitted Investments
held by them at any time that are not required for the payment of the amounts
described above in Section 10.03 on the Equipment Notes for which money or
Permitted Investments have been deposited pursuant to Section 10.01.

                                       69
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                                  ARTICLE 11

                            AMENDMENTS AND WAIVERS

                  Section 11.01.  Amendments to this Agreement Without Consent
                                  --------------------------------------------
of Noteholders. The Owner Trustee and the Indenture Trustee may enter into one
--------------
or more agreements supplemental hereto without the consent of any Noteholder for
any of the following purposes:

                  (1) to correct any mistake or cure any ambiguity, defect or
         inconsistency herein or in the Equipment Notes or to make any change
         not inconsistent with the provisions hereof; provided that such change
                                                      --------
         does not adversely affect the interests of any Noteholder;

                  (2) 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;

                  (3) to convey, transfer, assign, mortgage or pledge any
         property to or with the Indenture Trustee or to make any other
         provisions with respect to matters or questions arising hereunder so
         long as such action shall not adversely affect the interests of the
         Noteholders;

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

                  (5) 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 or the Owner Participant;

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

                                       70
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (7) to provide for the assumption by the Lessee of the
         obligations of the Owner Trustee hereunder in accordance with the terms
         and conditions applicable thereto specified in Section 7.03; or

                  (8) to provide for compliance with applicable law, including,
         without limitation, to include on the Equipment Notes any legend as may
         be required by applicable law.

                  Section 11.02.  Amendments to this Agreement with Consent of
                                  --------------------------------------------
Noteholders. (a) (1) With respect to the Existing Equipment Notes, with the
-----------
written consent of the holders of a majority of the aggregate principal amount
of the Outstanding Existing Equipment Notes, the Lessee, the Owner Trustee and
the Indenture Trustee may enter into such supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Agreement or of
any such supplemental agreements or to modify the rights of the holders;
provided, however, without the consent of each Certificate Holder affected
--------  -------
thereby, an amendment under this Section 11.02 may not:

                      (i)   change the final maturity of the principal of,
         premium, if any, or any installment of interest on, any Existing
         Equipment Note; or

                      (ii)  create any Lien on the Trust Indenture Estate prior
         to or pari passu with the Lien thereon under this Agreement except such
               ---- -----
         as are permitted by this Agreement, or deprive any Certificate Holder
         of the benefit of the Lien on the Trust Indenture Estate created by
         this Agreement; or

                      (iii) reduce the percentage in principal amount of the
         Outstanding Existing Equipment Note, 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 Agreement or of certain defaults hereunder or their
         consequences) provided for in this Agreement; or

                      (iv)  make any change in Section 8.05 or 8.08 or this
         Section 11.02(a).

                  (2) It is not necessary under this Section 11.02 for the
         Certificate Holders to consent to the particular form of any proposed
         supplemental agreement, but it is sufficient if they consent to the
         substance thereof.

                  (3) Promptly after the execution by the Owner Trustee, the
         Lessee and the Indenture Trustee of any supplemental agreement pursuant
         to the provisions of this Section 11.02, the Lessee shall transmit by
         first-class mail a notice, setting forth in general terms the substance
         of such supplemental agreement, to all Certificate Holders, as

                                       71
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         the names and addresses of such holders appear on the Register. Any
         failure of the Lessee to mail such notice, or any defect therein, shall
         not, however, in any way impair or affect the validity of any such
         supplemental agreement.

                  (b) (1) With the written consent of a Majority in Interest of
Noteholders, the Owner Trustee and the Indenture Trustee may enter into such
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Agreement or of any such supplemental agreements or to modify
the rights of the Noteholders; provided, however, that, on and after the
                               --------  -------
Refinancing Date only, an amendment under this Section 11.02 may not without the
consent of each of the Noteholders of the applicable Series of Equipment Notes
and in the case of the Series A-1, Series B or Series C-2 Pass Through Equipment
Notes, the applicable Liquidity Provider:

                      (i)   reduce the principal amount of, Make-Whole Amount
         (on and after the Refinancing Date only), if any, premium (prior to the
         Refinancing Date only), if any, or any installment of interest on, such
         Series of Equipment Notes; or

                      (ii)  change the date on which any principal amount of,
         any Amortization Amount payable with respect to, Make-Whole Amount (on
         and after the Refinancing Date only), if any, premium (prior to the
         Refinancing Date only), if any, or interest on such Series of Equipment
         Notes, is due or payable; or

                      (iii) with respect to each Series of Equipment Notes,
         create any Lien on the Indenture Estate prior to or pari passu with the
                                                             ---- -----
         Lien thereon under this Agreement except such as are permitted by this
         Agreement, or deprive any Noteholder of the benefit of the Lien on the
         Indenture Estate created by this Agreement; or

                      (iv)  with respect to such Series of Equipment Notes,
         reduce the percentage in principal amount of the outstanding Equipment
         Notes, the consent of whose Noteholders is required to take or approve
         any action under this Agreement; or

                      (v)   make any change in Article 3 or Article 6 or
         Sections 8.01 (except to add Indenture Events of Default) 8.05, 8.08 or
         Section 11.02(a).

                  (2) It is not necessary under this Section 11.02 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.

                  (3) Promptly after the execution by the Owner Trustee and the
         Indenture Trustee of any supplemental agreement pursuant to the
         provisions of this Section 11.02, the Indenture Trustee shall transmit
         by first-class mail a notice, setting forth in general

                                       72
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         terms the substance of such supplemental agreement, to all Noteholders,
         as the names and addresses of such Noteholders appear on the Register.
         Any failure of the Indenture Trustee to mail such notice, or any defect
         therein, shall not, however, in any way impair or affect the validity
         of any such supplemental agreement.

                  Section 11.03.  Revocation and Effect of Consents. Until an
                                  ---------------------------------
amendment or waiver becomes effective, a consent to it by a Noteholder is a
continuing consent by the Noteholder and every subsequent Noteholder, even if
notation of the consent is not made on any Equipment Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to his Equipment
Note if the Indenture Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Noteholder affected by such amendment or waiver.

                  Section 11.04.  Notation on or Exchange of Equipment Notes.
                                  ------------------------------------------
The Indenture Trustee may place an appropriate notation about an amendment or
waiver on any Equipment Note thereafter executed. The Indenture Trustee in
exchange for such Equipment Notes may execute new Equipment Notes that reflect
the amendment or waiver.

                  Section 11.05.  Indenture Trustee Protected.  The Indenture
                                  ---------------------------
Trustee need not sign any supplemental agreement that adversely affects its
rights.

                  Section 11.06.  Amendments, Waivers, etc. of Other Operative
                                  --------------------------------------------
Documents.
---------

                  (a)  Subject to Section 11.01, without the consent of a
Majority in Interest of Noteholders, the Owner Trustee (acting on instructions
from the Owner Participant) and the Indenture Trustee may not modify, amend or
supplement any of the Operative Documents, 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 respective parties thereunder;
provided, however, that the actions specified in subsection (b) of this Section
--------  -------
11.06 may be taken without the consent of the Indenture Trustee or any
Noteholder.

                  (b)  Subject to the provisions of subsection (c) of this
Section 11.06, the Owner Trustee (acting on instructions from the Owner
Participant) and the Indenture Trustee at any time and from time to time without
the consent of the Indenture Trustee or of any Noteholder may:

                  (1)  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 11.06 the parties to the Lease shall not modify, amend or

                                       73
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         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 date hereof:
         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
         maturity date of any Equipment Notes), Section 3(c)(iv), Section 3(d)
         (except to the extent such Section relates to amounts payable (whether
         directly or pursuant to the Indenture) to Persons other than
         Noteholders, the Liquidity Providers (on and after the Refinancing Date
         only) and the Indenture Trustee in its individual capacity), Section
         3(e) (except insofar as it relates to the address or account
         information of the Owner Trustee or the Indenture Trustee) (other than
         as such Sections 3(a), 3(d) and 3(e) may be amended pursuant to Section
         3(c) of the Lease in effect on the date hereof), Section 4, Section 6,
         Section 7(a), Sections 9(b) through (d) (except that further
         restrictions may be imposed on the Lessee), Section 10 (except that
         additional requirements may be imposed on the Lessee), Section 11
         (except for Section 11(e) 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, Section 14 (except to impose additional or
         more stringent Lease Events of Default), Section 15 (except to impose
         additional remedies), Section 16 (except to impose additional
         requirements on the Lessee), Section 18, Section 19 (to the extent such
         modification, amendment or supplement affects the rights and interests
         of the Owner Trustee or the Indenture Trustee under Section 1110 of the
         Bankruptcy Code), Section 20, Section 22 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
         Indenture 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 written consent of the Owner Trustee, and whether or not an
         Indenture Event of Default shall have occurred and be continuing, no
         such action (including a consent to an assignment by the Lessee under
         Section 13 of the Lease) shall be taken 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 provision), 3(c), 4, 5, 6 (to the extent
         such action would reduce the Lessee's obligations), 7, 8, 9, 10, 11,
         12, 13, 14, 15, 16 (insofar as it relates to the Lessor), 18, 19, 21
         and 23 of the Lease, or with respect to any other Section of the Lease
         to the extent such action with respect to such other Section shall
         affect the amount or timing of any amounts payable by the Lessee under
         the Lease as in effect on the date hereof (or as subsequently modified
         with the consent of the Owner

                                       74
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

         Trustee (acting on instructions from the Owner Participant)) which,
         absent the occurrence and continuance of an Indenture Event of Default,
         will be distributable to the Owner Trustee under Article 3; and
         provided further that the parties to the Lease may take any such action
         -------- -------
         without the consent of the Indenture 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, Excluded Payments;

                  (2)  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;

                  (3)  modify, amend or supplement the Participation Agreement,
         or give any consent, waiver, authorization or approval with respect
         thereto, except that without compliance with subsection (a) of this
         Section 11.06 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 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:
         Section 1(b), Section 7 (insofar as such Section 7 relates to the
         Indenture Trustee, any Liquidity Provider (on and after the Refinancing
         Date only) and the Noteholders), Section 8, Section 11, Section 17 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); and

                  (4)  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 Agreement, or to make any other
         provision with respect to matters or questions arising thereunder or
         under this Agreement which shall not be inconsistent with the
         provisions of this Agreement, provided the making of any such other
         provision shall not adversely affect the interests of the Noteholders.

                  (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 11.06 and anything in such subsections or elsewhere in this
Agreement to the contrary notwithstanding, shall, without the consent of the
holder of each outstanding Equipment Note affected thereby,

                                       75
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  (1)  modify, amend or supplement the Lease in such a way as to
         extend the time of payment of Basic Rent, Termination Value, Stipulated
         Loss Value or any other Rents assigned to the Indenture Trustee
         hereunder or any other amounts payable to the Indenture Trustee for its
         own account or for the account of the Noteholders (subject in any event
         to clause (iv) of Section 3(c) of the Lease) upon the occurrence of an
         Event of Loss or Termination Value and any other amounts payable to the
         Indenture Trustee for its own account or for the account of the
         Noteholders (subject in any event to clause (iii) of Section 3(c) of
         the Lease) upon termination of the Lease with respect to the Aircraft,
         payable under, or as provided in, the Lease as in effect on the date
         hereof, release or reduce the amount of any installment of Basic Rent
         or Supplemental Rent so that the same is less than the payment of
         principal of, Make-Whole Amount (on and after the Refinancing Date
         only), if any, premium (prior to the Refinancing Date only), 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, 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 date hereof
         upon the occurrence of an Event of Loss so that the same is less than
         the accrued interest on and the principal as of the Lease Loss Payment
         Date, and Make- Whole Amount (on and after the Refinancing Date only),
         if any, or premium (prior to the Refinancing Date only), 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 date hereof 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 (on and after the Refinancing Date only), if any, or
         premium (prior to the Refinancing Date only), if any, of Equipment
         Notes at the time outstanding, or

                  (2)  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 or Supplemental
         Rent, or Stipulated Loss Value and any other amounts payable to the
         Indenture Trustee for its own account or the account of the Noteholders
         (subject in any event to clause (iii) of Section 3(c) of the Lease), or
         on or after the Refinancing Date only, any Liquidity Provider upon the
         occurrence of an Event of Loss, or Termination Value and any other
         amounts payable to the Indenture Trustee for its own account or the
         account of the Noteholders (subject in any event to clause (iii) of
         Section 3(c) of the Lease) of the Lease with respect to the Aircraft,
         payable under, or as provided in, the Lease as in effect on the date
         hereof except for any such assignment pursuant to Section 8(u) of the
         Participation Agreement, and except as provided in the Lease as in
         effect on the date hereof.

                  Section 11.07.  Notices to Liquidity Providers. On and after
                                  ------------------------------
the Refinancing Date only, any request made to any Noteholder for consent to any
amendment or supplement pursuant

                                       76
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

to this Article 11 shall be promptly furnished by the Indenture Trustee to each
Liquidity Provider at its address set forth in the Intercreditor Agreement.

                                  ARTICLE 12

                                 MISCELLANEOUS

                  Section 12.01.  Notices. (a) Unless otherwise specifically
                                  -------
provided for herein, all notices required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice may be given
by hand-delivery, overnight courier service, mail, or telecopier (to be
confirmed by hand delivery, overnight courier service or mail) addressed as
indicated below and any such notice shall be effective, in the case of hand-
delivery, when delivered, in the case of overnight courier service, one Business
Day after delivery with charges paid to a courier service with instructions for
overnight delivery, in the case of mail, three Business Days after delivery to
the postal service with certified or registered mail charges paid, and, in the
case of telecopier, upon confirmed transmittal:

                  if to the Lessee, to:

                      United Air Lines, Inc.
                      P.O. Box 66100
                      Chicago, Illinois 60666
                      Attention:  Vice President and Treasurer
                      Telecopier:  (847) 700-7117

                  or if by overnight courier, to:

                      1200 East Algonquin Road
                      Elk Grove Township, Illinois 60007
                      Attention:  Vice President and Treasurer
                      Telecopier:  (847) 700-7117

                  if to the Indenture Trustee, to:

                      State Street Bank and Trust Company
                      of Connecticut, National Association
                      225 Asylum Street, Goodwin Square
                      Hartford, CT 06103
                      Attention:  Corporate Trust Department
                      Telecopier:   (860) 244-1889
                      Confirmation: (860) 244-1800

                                       77
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  if to the Owner Trustee, to:

                      P.O. Box 778
                      Boston, MA 02102-0778
                      Attention: Corporate Trust Department

                  or if by overnight courier to:

                      2 Avenue de Lafayette
                      Boston, MA 02111-1724
                      Attention:  Corporate Trust Department
                      Telecopier:   (617) 662-1458
                      Confirmation: (617) 662-1704

                      with a copy to the Owner Participant

                  if to the Owner Participant, to its address set forth in the
Participation Agreement.

                  (b)  The Lessee, the Owner Trustee, the Indenture Trustee or
the Owner Participant by notice to the others may designate additional or
different addresses for subsequent notices or communications.

                  (c)  Any notice or communication to the Noteholders shall be
mailed by first- class mail to the respective addresses for the Noteholders
shown on the Register kept by the Registrar and to addresses filed with the
Indenture Trustee for other Noteholders. Failure so to mail a notice or
communication or any defect in such notice or communication shall not affect its
sufficiency with respect to other Noteholders of such Equipment Notes of that or
any other Series entitled to receive notice.

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

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

                  Section 12.02.  GOVERNING LAW. THIS AGREEMENT AND THE
                                  -------------
EQUIPMENT NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS OF THE STATE OF ILLINOIS.

                  Section 12.03.  No Recourse Against Others. No director,
                                  --------------------------
officer, employee or stockholder, as such, of the Lessee, the Owner Trustee or
the Owner Participant, as the case may

                                       78
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

be, shall have any liability for any obligations of the Lessee, the Owner
Trustee or the Owner Participant, as the case may be, under this Agreement or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder by accepting an Equipment Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Equipment Notes.

                  Section 12.04.  Execution in Counterparts. This Agreement may
                                  -------------------------
be executed in any number of counterparts, each of which shall be an original
but such counterparts shall together constitute but one instrument.

                  Section 12.05.  Section 1110. It is the intention of the
                                  ------------
parties that the Owner Trustee, as lessor under the Lease (and the Indenture
Trustee as assignee of the Owner Trustee's rights hereunder), shall be entitled
to the benefits of Section 1110 of the Bankruptcy Code with respect to the right
to take possession of the Aircraft, Airframe, Engines and Parts as provided in
the Lease in the event of a case under Chapter 11 of the Bankruptcy Code in
which Lessee is a debtor, and in any instance where more than one construction
is possible of the terms and conditions hereof or of any other pertinent
Operative Document, each such party agrees that a construction which would
preserve such benefits shall control over any construction which would not
preserve such benefits.

                  Section 12.06.  Effectiveness. As of July 20, 2000, this
                                  -------------
Agreement shall amend and restate the Original Indenture in its entirety, and
the Original Indenture, except as expressly provided herein, shall be superseded
in its entirety by this Agreement.

                                *      *      *

                                       79
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                  IN WITNESS WHEREOF, the Owner Trustee and the Indenture
Trustee have caused this Trust Indenture and Security Agreement to be duly
executed by their respective officers thereunto duly authorized.

                                      STATE STREET BANK AND TRUST
                                      COMPANY, not in its individual
                                      capacity, except as expressly
                                      provided herein, but solely as
                                      Owner Trustee

                                      By: _____________________________
                                          Name:
                                          Title:

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

                                      By: _____________________________
                                          Name:
                                          Title:

                                       80
<PAGE>

                                                             Exhibit A-1 to
                                                             Trust Indenture and
                                                             Security Agreement

                        Form of Existing Equipment Note
                        -------------------------------

                                                                February 6, 1990

$_______________                                                No.____________

                  1989 EQUIPMENT TRUST CERTIFICATE, SERIES A

                             DUE FEBRUARY 15, 2014

                     STATE STREET BANK AND TRUST COMPANY,
                 Not in its  Individual  Capacity  but solely
                   as Owner Trustee under the First Amended
                       and Restated Trust Indenture and
                       Security Agreement (1989 I) dated
                              as of July 20, 2000

                                     with

              STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT
                             NATIONAL ASSOCIATION,
                        Not in its Individual Capacity
                     but Solely as Indenture Trustee Under
                        the First Amended and Restated
                    Trust Indenture and Security Agreement
                      (1989 I) dated as of July 20, 2000

                                      and

                       UNITED AIR LINES, INC., as Lessee

          State Street Bank and Trust Company, not in its individual capacity
but solely as the Owner Trustee (the "Owner Trustee") under the First Amended
and Restated Trust Indenture and Security Agreement (1989 I) dated as of July
20, 2000 between State Street Bank and Trust Company, as Owner Trustee, and
State Street Bank and Trust Company of Connecticut, National Association, as
Indenture Trustee, for value received, hereby promises to pay to _____________,
or registered assigns, the principal sum of __________________ Dollars and to
pay interest thereon at the Debt Rate (as defined below) from February 6, 1990
or from the most recent date to which interest has been paid or duly provided
for, semi-annually, on February 15 and August 15 in each year, commencing
February 15, 1990, until the principal hereof is paid or made available for
payment. The original principal sum of this Series A Certificate shall be
payable in installments on the dates set forth in Annex A hereto equal to the
corresponding percentage of the Original Amount (all terms used herein which are
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

defined in the Trust Indenture and Security Agreement are used herein as so
defined) of this Series A Certificates set forth in Annex A hereto. The interest
so payable, and punctually paid or duly provided for, on any such Interest
Payment Date will, as provided in the Trust Indenture and Security Agreement, be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the February 1 or August 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder hereof on such Record Date (or to
the Person in whose name this Certificate is registered upon issuance) and may
be paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a special record date
for the payment of such Defaulted Interest to be fixed by the Indenture Trustee,
notice whereof shall be given to the Holders not less than 10 days prior to such
special record date, all as more fully provided in the Trust Indenture and
Security Agreement.

          As used herein Debt Rate shall mean 10.43% per annum for the initial
Funding Period and thereafter shall be for each Funding Period the Applicable
Treasury Note Yield plus 2.00 percentage points. The Lessee on behalf of the
Owner Trustee shall specify the length of each Funding Period (other than the
initial Funding Period) by delivering written notice to the Indenture Trustee
and the Owner Trustee not less than sixty (60) nor more than one hundred twenty
(120) days prior to the commencement of such Funding Period. If Lessee on behalf
of the Owner Trustee fails to give the notice contemplated by this paragraph,
the Funding Period shall be for a period of one year (subject to provisions (i)
and (ii) of the definition of "Funding Period"). The Lessee shall promptly
notify the Indenture Trustee and the Owner Trustee of the determination of such
Debt Rate. Upon receipt of such notice, the Indenture Trustee shall promptly
notify each Series A Certificate Holder as to the length of each new Funding
Period and the applicable Debt Rate.

          Any amount not paid when due under this Certificate shall bear
interest, payable on demand, at a rate equal to 1.00% per annum in excess of the
Debt Rate applicable in respect of this Certificate (the "Past Due Rate").

          Except as otherwise expressly provided in the Trust Indenture and
Security Agreement, all amounts payable by the Indenture Trustee and the Owner
Trustee hereunder and under the Trust Indenture and Security Agreement shall be
made only from the income and proceeds of the Trust Indenture Estate. Each
Holder hereof, by its acceptance of this Certificate, agrees that (a) it will
look solely to the income and proceeds of the Trust Indenture Estate for payment
of such amounts, to the extent available for distribution to the Holder hereof
as provided in the Trust Indenture and Security Agreement, and (b) neither the
Owner Trustee nor the Indenture Trustee is or shall be personally liable to the
Holder hereof for any amount payable hereunder or under the Trust Indenture and
Security Agreement or, except as provided in the Trust Indenture and Security
Agreement in the case of the Indenture

                                      A-2
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Trustee and the Owner Trustee, for any liability under the Trust Indenture and
Security Agreement.

     Payment of the principal of, premium, if any, and interest on this
Certificate will be made in immediately available funds at the principal
corporate trust office of the Indenture Trustee, or the office or agency
maintained by the Indenture Trustee for such purpose, or as otherwise provided
in the Trust Indenture and Security Agreement, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Each such payment shall be made on the date such
payment is due and without any presentment or surrender of this Certificate,
except that in the case of any final payment with respect to this Certificate,
the Certificate shall be surrendered promptly thereafter by the Indenture
Trustee to the Owner Trustee for cancellation. Payments otherwise due on a day
which is not a Business Day shall be due on the immediately succeeding Business
Day without adjustment in the amount due.

     State Street Bank and Trust Company is not acting in its individual
capacity hereunder, but solely as Owner Trustee under the Trust Indenture and
Security Agreement.

     State Street Bank and Trust Company of Connecticut, National Association is
not acting individually hereunder, but solely as Indenture Trustee under the
Trust Indenture and Security Agreement.

     Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all Purposes have the same
effect as if set forth at this place.

     This Certificate shall not be entitled to any benefit under the Trust
Indenture and Security Agreement or be valid or obligatory for any purpose
unless this Certificate has been executed by the Owner Trustee, and
authenticated in the manner specified in Section 2.02 of the Trust Indenture and
Security Agreement.

     This Certificate is one of the 1989 Equipment Trust Certificates, Series A
issued pursuant to the Trust Indenture and Security Agreement.

                                      A-3
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

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

                                                STATE STREET BANK AND TRUST
                                                COMPANY

                                                By:____________________________
                                                Name:__________________________
                                                Title:_________________________

          This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement,
designated as 1989 Equipment Trust Certificate, Series A limited in aggregate
principal amount to $94,416,264.24.

          Reference is made to the Trust Indenture and Security Agreement and
all supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its principal corporate trust office) for a complete
statement of the terms and provisions thereof, including a statement of the
properties thereby conveyed, pledged and assigned, the nature and extent of the
security, the respective rights thereunder of the Owner Trustee, Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
are, and are to be, executed and delivered, as well as for a statement of the
terms and conditions of the trust created by the Trust Indenture and Security
Agreement, to all of which terms and conditions in the Trust Indenture and
Security Agreement each Holder hereof agrees by its acceptance of this
Certificate.

          As more fully provided in the Trust Indenture and Security Agreement,
the Certificates are subject to redemption, under the following circumstances,
at a redemption price equal to the unpaid principal amount thereof, premium, if
any, plus accrued interest thereon to the Redemption Date:

          (a)  in whole at any time upon the occurrence of an Event of Loss to
the Aircraft if such Aircraft is not replaced;

          (b)  in the event of a termination by Lessee, at its option, of the
Lease with respect to the Aircraft, if the Lease shall be terminated pursuant to
Section 9(a) thereof;

          (c)  in whole, if Lessee purchases the Aircraft pursuant to Section
9(b) of the Lease;

                                      A-4
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

          (d)  in whole at any time on or after February 15, 1995, if Lessee
shall have requested the Owner Trustee, and the Owner Trustee shall have
consented to such request, to effect a redemption pursuant to Section 17 of the
Participation Agreement;

          (e)  in whole, in the event that the Owner Trustee gives notice of
redemption to the Indenture Trustee pursuant to Section 8.03(e)(ii) of the Trust
Indenture and Security Agreement: (i) at any time after one or more Events of
Default shall have occurred and shall have continued for a period of 180 days or
more but less than one year, during which period the Certificates shall not have
been accelerated; or (ii) at any time after acceleration of the Certificates, or
at any time after one or more Lease Events of Default shall have occurred and
shall have continued for a period of one year or more, during which period the
Certificates shall not have been accelerated.

          If an Indenture Event of Default shall occur and be continuing, the
principal of the Certificates may be declared due and in the manner and with the
effect provided in the Trust Indenture and Security Agreement. If, and only if,
such Indenture Event of Default constitutes a Lease Event of Default, the
Indenture Trustee may, subject to Section 8.03 of the Trust Indenture and
Security Agreement declare the Lease to be in default, and may, to the exclusion
of the Owner Trustee, exercise one or more of the remedies of the Owner Trustee
provided in the Lease. Such remedies include the right to repossess and use or
operate the Aircraft, to sell or relet the Aircraft free and clear of Lessee's
rights and retain the proceeds and to require Lessee to pay as liquidated
damages (i) any unpaid Lease Rent plus an amount equal to the excess of the
Termination Value of the Aircraft over the discounted fair market rental value
thereof for the remainder of the term for the Aircraft, (ii) any unpaid Lease
Rent plus the excess of the Termination Value of the Aircraft over the fair
market sales value thereof or (iii) if the Aircraft has been sold, any unpaid
Lease Rent plus the excess of the Termination Value thereof over the net sales
proceeds.

          The Owner Trustee may cure any default by Lessee under the Lease
arising from the failure of Lessee to make payments of Basic Rent under the
Lease, provided that such failure of Lessee is not the fourth consecutive such
failure, or the seventh or subsequent cumulative such failure. The Owner Trustee
may cure any other default by Lessee in the performance of its obligations under
the Lease which can be cured by the payment of money, by making such payment on
behalf of Lessee.

          The right of the Holder of this Certificate to institute action for
any remedy under the Trust Indenture and Security Agreement, including the
enforcement of payment of any amount due hereon, is subject to certain
restrictions specified in the Trust Indenture and Security Agreement.

          In addition, the Owner Trustee and the Indenture Trustee will be
discharged from their respective obligations in respect of the Certificates
(except for certain obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates,

                                      A-5
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Trust Indenture Estate
from the Lien of the Trust Indenture and Security Agreement, if (a) the Owner
Trustee or Lessee deposits or causes to be deposited irrevocably with the
Indenture Trustee, in trust, money or U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay principal of,
premium, if any, and interest on the Outstanding Certificates on the dates such
payments are due in accordance with the terms of the Certificates and (b)
certain other conditions are satisfied, including the receipt of either a
private ruling issued by the Internal Revenue Service or an opinion of counsel,
based on a ruling published by the Internal Revenue Service after the date
hereof, in either case to the effect that the deposit and related defeasance
would not cause the Holders to recognize income, gain or loss for Federal income
tax purposes.

          As provided in the Trust Indenture and Security Agreement and subject
to certain limitations therein set forth, this Certificate is transferable, and
upon surrender of this Certificate for registration of transfer at the principal
corporate trust office of the Registrar, or at the office or agency maintained
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by, the Holder or
his attorney duly authorized in writing, one or more new Certificates of the
same maturity and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.

          The Certificates are issuable only as registered Certificates without
coupons. As provided in the Trust Indenture and Security Agreement and subject
to certain limitations therein set forth, Certificates are exchangeable for a
like aggregate principal amount of Certificates of the same maturity and of
authorized denominations, as requested by the Holder surrendering the same, upon
presentation thereof for such purpose at the principal corporate trust office of
the Registrar, or at an office or agency maintained for such purpose.

          No service charge shall be made for any such registration of transfer
or exchange, but the Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

          Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, any Paying Agent, the
Registrar and Lessee may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever, whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, any Paying Agent, the
Registrar nor Lessee shall be affected by notice to the contrary.

          AS PROVIDED IN THE TRUST INDENTURE AND SECURITY AGREEMENT, THE TRUST
INDENTURE AND SECURITY AGREEMENT AND THIS

                                      A-6
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF ILLINOIS.

                         CERTIFICATE OF AUTHENTICATION

          This is one of the Certificates referred to in the within-mentioned
Trust Indenture and Security Agreement.

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

                                           By:________________________________
                                           Name:______________________________
                                           Title:_____________________________

THIS CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, THIS CERTIFICATE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE
ACT AND SUCH APPLICABLE STATE LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.

                                      A-7
<PAGE>

                                                             Exhibit A-2 to
                                                             Trust Indenture and
                                                             Security Agreement

                      Form of Pass Through Equipment Note
                      -----------------------------------

          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.  ACCORDINGLY, THIS EQUIPMENT
          NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT
           AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH
                          REGISTRATION IS AVAILABLE.

                     STATE STREET BANK AND TRUST COMPANY,
                          NOT INDIVIDUALLY BUT SOLELY
                               AS OWNER TRUSTEE

        SERIES [______] EQUIPMENT NOTE DUE [_____] ISSUED IN CONNECTION
         WITH THE BOEING MODEL 747-422 AIRCRAFT BEARING UNITED STATES
                          REGISTRATION NUMBER N171UA.

No.______                                Date: [___________,____]

Original Principal Amount                      Maturity Date
                                               -------------

$________________________                      _____________

          STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company,
not individually but solely as Owner Trustee (herein, in such capacity, the
"Owner Trustee") for value received, hereby promises to pay to STATE STREET BANK
AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as Subordination Agent
as nominee for the Pass Through Trustee under the Intercreditor Agreement, or
registered assigns, the principal sum of __________ Dollars ($________) in
installments, one such installment to be due and payable on each Payment Date,
each such installment to be in an amount equal to the amount set forth in
Schedule I hereto, together with interest on the unpaid principal amount hereof
from time to time outstanding from and including the date hereof until such
principal amount is paid in full. Interest shall accrue with respect to each
Interest Period at the Debt Rate (calculated on the basis of a year of 360 days
consisting of twelve (12) thirty-day months) in effect for such Interest Period
and shall be payable in arrears on each Interest Payment Date and on the date
this Equipment Note is paid in full. Interest shall be payable with respect to
the first but not the last day of each Interest Period. 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.
Notwithstanding anything to the contrary contained herein, if any date on
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

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 and if such payment is made on
such next succeeding Business Day, interest at the Debt Rate shall accrue on the
amount of such payment during such extension.

          For purposes hereof, the term "Indenture" means the Amended and
Restated Trust Indenture and Security Agreement (1989 I), dated as of July 20,
2000 between the Owner Trustee and State Street Bank and Trust Company of
Connecticut, National Association (the "Indenture Trustee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.

          This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days consisting of
twelve (12) thirty-day months) on any overdue principal amount, Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).

          All payments of principal, Make-Whole Amount, if any, interest and
other amounts, if any, to be made by the Owner Trustee hereunder and under the
Indenture shall be made only from the income and proceeds from the Indenture
Estate and only to the extent that the Indenture Trustee shall have sufficient
income or proceeds from the Indenture Estate to make such payments. 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 Trustee, the Indenture Trustee and the Owner Participant is or
shall be 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 for
any liability under this Equipment Note or the Indenture or, except as provided
in Section 2.09 of the Indenture, under the Participation Agreement or the other
Operative Documents; provided, however, that, nothing herein contained shall
limit, restrict or impair the right of the Indenture Trustee, subject always to
the terms and provisions of the Indenture, to accelerate the maturity of this
Equipment Note upon an Indenture Event of Default under 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.

          This Equipment Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose unless this Equipment Note
has been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02 of
the Indenture.

                                      A-9
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

          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. Reference is made to the Indenture and all
supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its Corporate Trust Department) for a more complete
statement of the terms and provisions thereof, including a statement of the
properties thereby conveyed, pledged and assigned, the nature and extent of the
security, the respective rights thereunder of the Owner Trustee, the Indenture
Trustee and the Noteholders of the Equipment Notes, and the terms upon which the
Equipment Notes are, and are to be, executed and delivered, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture each Noteholder hereof agrees
by its acceptance of this Equipment Note.

          This Equipment Note is subject to redemption as provided in Article 6
of the Indenture but not otherwise.

          If an Indenture Event of Default shall occur and be continuing, the
principal amount remaining unpaid on this Equipment Note may be declared due and
payable in the manner and with the effect provided in the Indenture.

          As provided in the Indenture, in certain circumstances this Equipment
Note is transferable, and upon surrender of this Equipment Note for registration
of transfer at the principal corporate trust office of the Registrar, or at the
office or agency maintained for such purpose, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Registrar duly
executed by, the Noteholder or his attorney duly authorized in writing, one or
more new Equipment Notes of the same maturity and type and of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.

          The Equipment Notes are issuable only as registered Equipment Notes.
As provided in the Indenture and subject to certain limitations therein set
forth, Equipment Notes are exchangeable for a like aggregate principal amount of
Equipment Notes of the same series, maturity and type and of authorized
denominations, as requested by the Noteholder surrendering the same, upon
presentation thereof for such purpose at the principal corporate trust office of
the Registrar, or at an office or agency maintained for such purpose. No service
charge shall be made for any such registration of transfer or exchange, but the
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

          Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee, the Indenture Trustee, the Paying Agent and
the Registrar may deem and treat the person in whose name this Equipment Note is
registered as the absolute owner hereof for the purpose of receiving payment of
the principal of and interest on this Equipment Note and for all other purposes
whatsoever whether or not this Equipment Note be overdue, and neither the

                                     A-10
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

Owner Trustee, the Indenture Trustee, the Paying Agent nor the Registrar shall
be affected by notice to the contrary.

          [The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the 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]/1/ [Series A-1 and
Series B Equipment Notes]/2/ and this Equipment Note is issued subject to such
provisions]/3/ . The Noteholder of this Equipment Note, by accepting the same,
(a) agrees to and shall be bound by such provisions and each other provision
applicable to it in the Indenture, the Participation Agreement, the Note
Purchase Agreement and each other Operative Document and Pass Through Document,
(b) authorizes and directs the Indenture Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Indenture Trustee its
attorney-in-fact for such purpose.

          AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS EQUIPMENT NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE
OF ILLINOIS.

                                  *    *    *

_________________

     /1/  To be inserted in the case of a Series B Equipment Note.

     /2/  To be inserted in the case of a Series C-2 Equipment Note.

     /3/  To be inserted for each Equipment Note other than any Series A-1
          Equipment

Note.

                                     A-11
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

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

                             STATE STREET BANK AND TRUST
                             COMPANY, not in its individual capacity but solely
                             as Owner Trustee

                             By:_______________________________________________
                                 Name:
                                 Title:

                                     A-12
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

               INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

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

                                           By:__________________________________
                                              Authorized officer and signatory

                                     A-13
<PAGE>

                                     [First Amended and Restated Trust Indenture
                                                and Security Agreement (1989 I)]

                                  SCHEDULE I

                             AMORTIZATION SCHEDULE

         SCHEDULE I TO THE FIRST AMENDED AND RESTATED TRUST INDENTURE AND
         SECURITY AGREEMENT (1989 I) HAS BEEN INTENTIONALLY OMITTED FROM THE
         FIRST AMENDED AND RESTATED TRUST INDENTURE AND SECURITY AGREEMENT
         (1989 I) ON FILE WITH THE FAA

                                     A-14
<PAGE>

                               [Trust Indenture and Security Agreement (1989 I)]

                                   EXHIBIT B
                                   ---------

                    TRUST AGREEMENT AND TRUST INDENTURE AND
                         SECURITY AGREEMENT SUPPLEMENT

                                   (1989 I)

     This TRUST AGREEMENT AND TRUST INDENTURE AND SECURITY AGREEMENT SUPPLEMENT
(1989 I), dated (herein called the "Trust Supplement") of STATE STREET BANK AND
TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee
(herein called the "Owner Trustee"), under the Trust Agreement (1989 I), dated
as of July 20, 2000 (as amended to date herein called the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.

                                  WITNESSETH:

     WHEREAS, the Trust Agreement provides for the execution and delivery of one
or more, supplements thereto substantially in the form hereof, which shall
particularly describe the Aircraft (such term and other terms defined in the
Indenture referred to below used herein as therein defined) included in the
property covered by the Trust Agreement;

     WHEREAS, the Amended and Restated Trust Indenture and Security Agreement
(1989 I) dated as of July 20, 2000 (herein called the "Indenture"), between the
Owner Trustee and STATE STREET BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as
Indenture Trustee (herein called the "Indenture Trustee"), provides for the
execution and delivery of a supplement thereto substantially in the form hereof,
which shall particularly describe the Aircraft, and shall specifically mortgage
such Aircraft to the Indenture Trustee; and

     WHEREAS, each of the Trust Agreement and Indenture relates to the Airframe
and Engines described below, and a counterpart of the Indenture is attached
hereto and made a part hereof and this Trust Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date hereof
with the Federal Aviation Administration as one document;

     NOW, THEREFORE, this Trust Supplement Witnesseth, subject to Section
2.11(b) of the Indenture that, to secure the prompt payment by the Owner
Trustee, as and when required under the Indenture or the Equipment Notes, of the
principal of, Make-Whole Amount (on and after the Refinancing Date only), if
any, premium (prior to the Refinancing Date only), if any, and interest on, and
all other amounts due with respect to, all Equipment Notes from time to time
outstanding under the Indenture and to secure the performance and observance by
the Owner Trustee of all the agreements, covenants and provisions contained in
the Indenture and in the
<PAGE>

                               [Trust Indenture and Security Agreement (1989 I)]

other Operative Documents to which it is a party (other than the Note Purchase
Agreement), for the benefit of the Noteholders and each of the Indenture
Indemnitees, and the prompt payment of any and all amounts from time to time
owing under the Indenture, under the Lease and under the Participation Agreement
by the Owner Trustee, the Owner Participant or the Lessee to the Noteholders and
the Indenture Indemnitees (such obligations being collectively referred to
herein as the "Secured Obligations") and for the uses and purposes and subject
to the terms and provisions of the Indenture, and in consideration of the
premises and of the covenants contained in the Indenture, and of the acceptance
of the Equipment Notes by the Noteholders and of other good and valuable
consideration the receipt and adequacy whereof are 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 Indenture 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
the following described property:

                                   AIRFRAME

                      One Airframe Identified as follows:

                                            FAA
                                        Registration       Manufacturer's
     Manufacturer          Model           Number           Serial Number
     ------------          -----           ------           -------------
The Boeing Company

together with all Parts which are from time to time incorporated or installed in
or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.

                               AIRCRAFT ENGINES

          Two aircraft engines, each such engine having 750 or more rated take-
off horsepower or the equivalent thereof, whether or not such engines shall be
installed in or attached to the Airframe or any other airframe, identified as
follows:

                                                           Manufacturer's
          Manufacturer                Model                Serial Numbers

                                      B-2
<PAGE>

                               [Trust Indenture and Security Agreement (1989 I)]

in each case, together with all Parts which are from time to time incorporated
or installed in or attached thereto or which have been removed therefrom, but
where title to which remains vested in the Owner Trustee in accordance with the
Lease.

          As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee hereby confirms that the Lien of
the Indenture over the Trust Indenture Estate includes the Lease Supplement of
even date herewith covering the property described above.

          Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.

          TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the Indenture Trustee the Noteholders from time to time without,
except as provided in Section 2.10 and Article 3 of the Indenture, any
preference, distinction or priority of any one Equipment Note over any other by
reason of series, priority of time of issue, sale or negotiation, date of
maturity or otherwise for any reason whatsoever, and for the uses and purposes
and subject to the terms and provisions set forth in the Indenture.

          This Trust Supplement shall be construed as supplemental to the
Indenture and to the Trust Agreement and shall form a part of each, and the
Trust Agreement and the Indenture are each hereby incorporated by reference
herein and each is hereby ratified, approved and confirmed.

                                  *    *    *

                                      B-3
<PAGE>

                               [Trust Indenture and Security Agreement (1989 I)]

          IN WITNESS WHEREOF, the Owner Trustee has caused this Trust Supplement
to be duly executed by one of its officers, thereunto duly authorized, on the
day and year first above written.

                                       STATE STREET BANK AND TRUST
                                       COMPANY, not in its individual capacity
                                       but solely as Owner Trustee

                                       By:___________________________________
                                          Title:

                                      B-4

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