Document:

<PAGE>

                                                                    EXHIBIT 4.10
________________________________________________________________________________

                            INTERCREDITOR AGREEMENT

                           Dated as of July 31, 2000

                                    between

                      STATE STREET BANK AND TRUST COMPANY
                     OF CONNECTICUT, NATIONAL ASSOCIATION,
                         not in its individual capacity
                        but solely as Trustee under the
                 United Airlines 2000-1A-1 Pass Through Trust,
                 United Airlines 2000-1A-2 Pass Through Trust,
                  United Airlines 2000-1B Pass Through Trust,
                 United Airlines 2000-1C-1 Pass Through Trust,
                 United Airlines 2000-1C-2 Pass Through Trust,

                   LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
                        as Class A-1 Liquidity Provider,
                       Class A-2 Liquidity Provider, and
                          Class B Liquidity Provider,

                                      and

                      STATE STREET BANK AND TRUST COMPANY
                     OF CONNECTICUT, NATIONAL ASSOCIATION,
                     not in its individual capacity except
                       as expressly set forth herein but
                   solely as Subordination Agent and Trustee

________________________________________________________________________________
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
                                       ARTICLE I

                                      DEFINITIONS

<S>                                                                                 <C>
1.1  Definitions................................................................     2

                                       ARTICLE II

                           TRUST ACCOUNTS; CONTROLLING PARTY

2.1  Agreement to Terms of Subordination; Payments from Monies Received Only....    26
2.2  Trust Accounts.............................................................    27
2.3  Deposits to the Collection Account and Special Payments Account............    28
2.4  Distributions of Special Payments..........................................    28
2.5  Designated Representatives.................................................    31
2.6  Controlling Party..........................................................    32

                                      ARTICLE III

                        RECEIPT, DISTRIBUTION AND APPLICATION OF
                                    AMOUNTS RECEIVED

3.1  Written Notice of Distribution.............................................    33
3.2  Distribution of Amounts on Deposit in the Collection Account...............    36
3.3  Distribution of Amounts on Deposit Following a Triggering Event............    37
3.4  Other Payments.............................................................    39
3.5  Payments to the Trustee and the Liquidity Providers........................    40
3.6  Liquidity Facilities.......................................................    40

                                       ARTICLE IV

                                  EXERCISE OF REMEDIES

4.1  Directions from the Controlling Party......................................    47
4.2  Remedies Cumulative........................................................    49
4.3  Discontinuance of Proceedings..............................................    49
4.4  Right of Certificateholders to Receive Payments Not to Be Impaired.........    49
4.5  Undertaking for Costs......................................................    49

                                       ARTICLE V

                           DUTIES OF THE SUBORDINATION AGENT;
                              AGREEMENTS OF TRUSTEES, ETC

5.1  Notice of Indenture Default or Triggering Event............................    50
5.2  Indemnification............................................................    50
5.3  No Duties Except as Specified in Intercreditor Agreement...................    51
5.4  Notice from the Liquidity Providers and Trustee............................    51

                                       ARTICLE VI

                                THE SUBORDINATION AGENT

6.1  Acceptance of Trusts and Duties............................................    51
6.2  Absence of Duties..........................................................    51
6.3  No Representations or Warranties as to Documents...........................    52
6.4  No Segregation of Monies; No Interest......................................    52
</TABLE>
                                       i
<PAGE>

<TABLE>
<S>                                                                                          <C>
6.5      Reliance; Agents; Advice of Counsel........................................       52
6.6      Capacity in Which Acting...................................................       53
6.7      Compensation...............................................................       53
6.8      May Become Certificateholder...............................................       53
6.9      Subordination Agent Required; Eligibility..................................       53
6.10     Money to Be Held in Trust..................................................       53

                                            ARTICLE VII

                                            [Reserved]

                                           ARTICLE VIII

                                 SUCCESSOR SUBORDINATION AGENT

8.1      Replacement of Subordination Agent; Appointment of Successor...............       54

                                             ARTICLE IX

                                     SUPPLEMENTS AND AMENDMENTS

9.1      Amendments, Waivers, etc...................................................       55
9.2      Subordination Agent Protected..............................................       57
9.3      Effect of Supplemental Agreements..........................................       57
9.4      Copy to Rating Agencies....................................................       57

                                             ARTICLE X

                                           MISCELLANEOUS

10.1     Termination of Intercreditor Agreement.....................................       58
10.2     Intercreditor Agreement for Benefit of Trustee, Liquidity Providers and
         Subordination Agent........................................................       58
10.3     Notices.........................................................................  58
10.4     Severability....................................................................  59
10.5     No Oral Modifications or Continuing Waivers.....................................  59
10.6     Successors and Assigns..........................................................  59
10.7     Headings........................................................................  60
10.8     Counterpart Form................................................................  60
10.9     Subordination...................................................................  60
10.10    GOVERNING LAW...................................................................  61
10.11    Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Indemnity...........  61
</TABLE>

Schedule 1        -        Indentures

                                      ii
<PAGE>

                            INTERCREDITOR AGREEMENT

          This INTERCREDITOR AGREEMENT, dated as of July 31, 2000, between STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association ("State Street"), not in its individual capacity but solely
                      ------------
as Trustee of each Trust (each as defined below), LANDESBANK HESSEN-THURINGEN
GIROZENTRALE, a public-law banking institution organized under the laws of
Germany, as the Class A-1 Liquidity Provider, the Class A-2 Liquidity Provider
and the Class B Liquidity Provider and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity except as
expressly set forth herein, but solely as Subordination Agent hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII, the
                                                            ------------
"Subordination Agent").
--------------------

          WHEREAS, all capitalized terms used and not otherwise defined herein
shall have the respective meanings referred to in Article I;
                                                  ---------

          WHEREAS, pursuant to each Owned Aircraft Indenture with respect to the
six Airbus 320-232 aircraft, one Boeing 757-222 aircraft, two Boeing 767-322
aircraft and four Boeing 777-222 aircraft owned by United (the "Owned
                                                                -----
Aircraft"), United proposes to issue on a recourse basis four series of United
Equipment Notes to refinance its current indebtedness originally incurred to
finance the Owned Aircraft (and, pursuant to the related Indenture, may in the
future issue on a recourse basis a fifth series of United Equipment Notes);

          WHEREAS, pursuant to each Leased Aircraft Indenture with respect to
the six Boeing 757-222 aircraft that have been leased to United pursuant to the
related Lease (collectively, the "Leased Aircraft"), (i) the related Owner
                                  ---------------
Trustees have issued on a nonrecourse basis Leased Equipment Notes and the
current holders of such notes propose to sell such notes to AFE Trust and (ii)
AFE Trust proposes to issue on a nonrecourse basis four series of AFE Notes to
refinance the current indebtedness originally incurred to finance the purchase
of the Leased Aircraft;

          WHEREAS, pursuant to the 747 Leased Aircraft Indenture with respect to
the one Boeing 747-422 aircraft (the "747 Leased Aircraft"), the related Owner
                                      -------------------
Trustee proposes to issue on a nonrecourse basis three series of 747 Leased
Equipment Notes to refinance its current indebtedness originally incurred to
finance the 747 Leased Aircraft;

          WHEREAS, pursuant to the United Equipment Note Purchase Agreement,
each Trust will acquire those United Equipment Notes having an interest rate
equal to the interest rate applicable to the Certificates to be issued by such
Trust;
<PAGE>

          WHEREAS, pursuant to the AFE Note Purchase Agreement, each Trust will
acquire those AFE Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;

          WHEREAS, pursuant to the 747 Leased Equipment Note Purchase Agreement,
each Trust will acquire those 747 Leased Equipment Notes having an interest rate
equal to the interest rate applicable to the Certificates to be issued by such
Trust;

          WHEREAS, pursuant to each Trust Agreement executed and delivered from
time to time, the Trust created thereby proposes to issue a single class of
Certificates (each, a "Class"), designated as either Class A-1 Certificates,
                       -----
Class A-2 Certificates, Class B Certificates, Class C-1 Certificates or Class C-
2 Certificates, bearing the interest rate and having the final distribution date
described in such Trust Agreement on the terms and subject to the conditions set
forth therein;

          WHEREAS, pursuant to the Underwriting Agreement, on the Closing Date
the Underwriters propose to purchase the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates issued by the related Trust in the
aggregate face amount set forth opposite the name of such Trust on Schedule I
thereto on the terms and subject to the conditions set forth therein;

          WHEREAS, on the Closing Date, pursuant to the Class C-1 Certificate
Purchase Agreement, Four Star Leasing, Inc. proposes to purchase the Class C-1
Certificates issued by the Class C-1 Trust in the aggregate amount set forth
therein;

          WHEREAS, on the Closing Date, pursuant to the Class C-2 Certificate
Purchase Agreement, Four Star Leasing, Inc. proposes to purchase the Class C-2
Certificates issued by the Class C-2 Trust in the aggregate amount set forth
therein;

          WHEREAS, the Class A-1 Liquidity Provider proposes to enter into a
revolving credit agreement relating to the Class A-1 Certificates, the Class A-2
Liquidity Provider proposes to enter into a revolving credit agreement relating
to the Class A-2 Certificates and the Class B Liquidity Provider proposes to
enter into a revolving credit agreement relating to the Class B Certificates
(each, a "Liquidity Facility"), in each case with the Subordination Agent, as
          ------------------
agent for the Trustee of the Class A-1 Trust, the Class A-2 Trust or the Class B
Trust, as applicable, for the benefit of the Certificateholders of each such
Trust; and

          WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement.
<PAGE>

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

                                   ARTICLE I

                                  DEFINITIONS

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

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

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

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

          (4) the term "including" means "including without limitation".

          "747 Leased Aircraft" has the meaning assigned to such term in the
           -------------------
     preliminary statements of this Agreement.

          "747 Leased Aircraft Assignment and Assumption Agreement" has the
           -------------------------------------------------------
     meaning assigned to such term in the Lease referred to in the 747 Leased
     Aircraft Indenture.

          "747 Leased Aircraft Indenture" means, with respect to the 747 Leased
           -----------------------------
     Equipment Notes, the trust indenture and security agreement or trust
     indenture and mortgage or similar agreement described on Schedule 1
     attached hereto, as such indenture may be amended or supplemented in
     accordance with its terms.

          "747 Leased Aircraft Owner Participant Guaranty Agreement" has the
           --------------------------------------------------------
     meaning assigned to such term in the Lease referred to in the 747 Leased
     Aircraft Indenture.

                                       3
<PAGE>

          "747 Leased Aircraft Participation Agreement" means, with respect to
           -------------------------------------------
     the Equipment Note Indenture pertaining to the 747 Leased Aircraft, the
     "Participation Agreement" referred to therein.

          "747 Leased Aircraft Trust Agreement" has the meaning assigned to such
           -----------------------------------
     term in the Lease referred to in the 747 Leased Aircraft Indenture.

          "747 Leased Equipment Note Purchase Agreement" means the Note Purchase
           --------------------------------------------
     Agreement, dated as of July 31, 2000, between the Owner Trustee under the
     747 Leased Aircraft Indenture, the Owner Participant thereunder, the
     Subordination Agent and the Trustee, relating to the 747 Leased Equipment
     Notes in respect of the 747 Leased Aircraft.

          "747 Leased Equipment Notes" means, at any time, the Series A-1 747
           --------------------------
     Leased Equipment Notes, the Series B 747 Leased Equipment Notes and the
     Series C-2 747 Leased Equipment Notes, collectively, and in each case, any
     747 Leased Equipment Notes issued in exchange therefor or replacement
     thereof pursuant to the terms of the Equipment Note Indentures.

          "Acceleration" means, with respect to the amounts payable in respect
           ------------
     of the Equipment Notes issued under any Indenture, such amounts to be
     immediately due and payable by declaration or otherwise.  "Accelerate,"
                                                                ----------
     "Accelerated" and "Accelerating" have meanings correlative to the
     ------------       ------------
     foregoing.

          "Additional Payment" means a payment of Make-Whole Amount and/or Break
           ------------------
     Amount, if any.

          "Adjusted Expected Distributions" means, with respect to the
           -------------------------------
     Certificates of any Trust on any Current Distribution Date, the sum of (x)
     accrued and unpaid interest on such Certificates and (y) the greater of:

               (A)  the difference between (x) the Pool Balance of such
                    Certificates as of the preceding Distribution Date (or, if
                    the Current Distribution Date is the first Distribution
                    Date, the original aggregate face amount of the Certificates
                    of such Trust) and (y) the Pool Balance of such Certificates
                    as of the Current Distribution Date calculated on the basis
                    that (i) the principal of the Non-Performing Equipment Notes
                    and the AFE Notes (as to which there has been a payment
                    default) held in such Trust has been paid in full and such
                    payments have been distributed to the holders of such
                    Certificates and (ii) the principal of the Performing
                    Equipment Notes and the AFE Notes (as to which there has not
                    been a payment default) held in such Trust has been paid
                    when due (but without giving effect to any Acceleration of
                    any

                                       4
<PAGE>

                    thereof) and such payments have been distributed to the
                    holders of such Certificates; and

               (B)  the amount of the excess, if any, of (i) the Pool Balance of
                    such Class of Certificates as of the preceding Distribution
                    Date (or, if the Current Distribution Date is the first
                    Distribution Date, the original aggregate face amount of the
                    Certificates of such Trust), over (ii) the Aggregate LTV
                    Collateral Amount for such Class of Certificates for the
                    Current Distribution Date;

          provided, however, that, until the date of the initial LTV Appraisals,
          --------  -------
          clause (B) shall not apply.
          ----------

     For purposes of calculating Adjusted Expected Distributions with respect to
     the Certificates of any Trust, any Additional Payment paid on the Trust
     Owned Notes held in such Trust that has not been distributed to the
     Certificateholders of such Trust (other than such Additional Payment or a
     portion thereof applied to the payment of interest on the Certificates of
     such Trust or the reduction of the Pool Balance of such Trust) shall be
     added to the amount of Adjusted Expected Distributions.

          "Advance" means, with respect to any Liquidity Facility, any Advance
           -------
     as defined in such Liquidity Facility.

          "AFE Indenture" means, with respect to the AFE Notes, the trust
           -------------
     indenture and security agreement described on Schedule 1 attached to this
     Agreement between AFE as debtor and State Street as Indenture Trustee (the
     "AFE Indenture Trustee") and secured party, as such indenture may be
     amended or supplemented in accordance with its terms.

          "AFE Indenture Trustee" means State Street Bank and Trust Company of
           ---------------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the AFE Indenture, together with any successor
     trustee appointed pursuant thereto.

          "AFE Investors" means the Persons owning AFE Trust Certificates.
           -------------

          "AFE Note Purchase Agreement" means the Note Purchase Agreement
           ---------------------------
     relating to the AFE Notes in respect of the Leased Aircraft, dated as of
     July 31, 2000, between AFE Trust, the Indenture Trustee under the AFE
     Indenture, United, the Subordination Agent  and the Trustees.

          "AFE Notes" means, at any time, the Series A-1 AFE Notes, the Series
           ---------
     A-2 AFE Notes, the Series B AFE Notes and the Series C-1 AFE Notes,
     collectively, and in each case,

                                       5
<PAGE>

     any AFE Notes issued in exchange therefor or replacement thereof pursuant
     to the terms of the AFE Indenture.

          "AFE Trust" means AFE Trust, a Delaware business trust.
           ---------

          "AFE Trust Certificates" means the certificates representing
           ----------------------
     beneficial interests in AFE Trust.

          "AFE Trustee" means Wilmington Trust Company, not in its individual
     capacity but solely as trustee of AFE Trust, together with any successor
     trustee.

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

          "Aggregate LTV Collateral Amount" for any Class of Certificates for
           -------------------------------
     any Distribution Date means the product of (A)(i) the sum of the applicable
     LTV Collateral Amounts for all Aircraft, minus (ii) the Pool Balance for
     each Class of Certificates, if any, senior to such Class, after giving
     effect to any distribution of principal on such Distribution Date with
     respect to such senior Class or Classes, multiplied by (B)(i) in the case
     of the Class A-1 Certificates or Class A-2 Certificates, a fraction the
     numerator of which equals the Current Pool Balance for the Class A-1
     Certificates or Class A-2 Certificates, as the case may be, and the
     denominator of which equals the aggregate Current Pool Balance for the
     Class A-1 Certificates and Class A-2 Certificates, (ii), in the case of the
     Class C-1 Certificates or the Class C-2 Certificates, a fraction the
     numerator of which equals the Current Pool Balance for the Class C-1
     Certificates or Class C-2 Certificates, as the case may be, and the
     denominator of which equals the aggregate Current Pool Balance for the
     Class C-1 Certificates and Class C-2 Certificates and (iii) in the case of
     the Class B Certificates, 1.0.

          "Aircraft" means, with respect to each Indenture, the "Aircraft"
           --------
     referred to therein.

          "Appraisal" means a fair market value appraisal (which may be a
           ---------
     "desktop" appraisal) performed by any Appraiser or any other nationally
     recognized appraiser on the basis of an arm's-length transaction between an
     informed and willing purchaser under no compulsion to buy and an informed
     and willing seller under no compulsion to sell and both having knowledge of
     all relevant facts.

          "Appraised Current Market Value" of any Aircraft means the lower of
           ------------------------------
     the average and the median of the most recent three Appraisals of such
     Aircraft.

                                       6
<PAGE>

          "Appraisers" means, collectively, Aircraft Information Services, Inc.,
           ----------
     Morten Beyer and Agnew, Inc. and AvSolutions Inc.

          "Available Amount" means, with respect to any Liquidity Facility on
           ----------------
     any drawing date, subject to the proviso contained in the first sentence of
     Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
     Liquidity Facility at such time, less (b) the aggregate amount of each
                                      ----
     Interest Drawing honored by the Liquidity Provider under such Liquidity
     Facility on or prior to such date that has not been reimbursed or
     reinstated as of such date; provided, however, that, following a Downgrade
                                 --------  -------
     Drawing, a Non-Extension Drawing or a Final Drawing under such Liquidity
     Facility, the Available Amount of such Liquidity Facility shall be zero.

          "Bankruptcy Code" has the meaning assigned to such term in the
           ---------------
     definition of "Performing Equipment Note" in this Section 1.1.
                                                       -----------

          "Basic Pass Through Trust Agreement" with respect to any Trust, means
           ----------------------------------
     the Pass Through Trust Agreement, dated as of July 31, 2000, between United
     and State Street, as the same may from time to time be supplemented,
     amended or modified, but does not include any Trust Supplement.

          "Break Amount" means the breakage costs under any of the Indentures.
           ------------

          "Business Day" means any day (i) other than a Saturday or Sunday or a
           ------------
     day on which commercial banks are required or authorized to close in
     Chicago, Illinois, New York, New York or the city and state in which any
     Trustee, the Subordination Agent or any Indenture Trustee maintains its
     Corporate Trust Office or receives and disburses funds, and (ii) that,
     solely with respect to draws under any Liquidity Facility, also is a
     "Business Day" as defined in such Liquidity Facility.

          "Cash Collateral Account" means the Class A-1 Cash Collateral Account,
           -----------------------
     the Class A-2 Cash Collateral Account or the Class B Cash Collateral
     Account, as applicable.

          "Certificate" means a Class A-1 Certificate, a Class A-2 Certificate,
           -----------
     a Class B Certificate, a Class C-1 Certificate or a Class C-2 Certificate,
     as applicable.

          "Certificateholder" means any holder of one or more Certificates.
           -----------------

          "Class" has the meaning assigned to such term in the preliminary
           -----
     statements to this Agreement.

                                       7
<PAGE>

          "Class A-1 Cash Collateral Account" means an Eligible Deposit Account
           ---------------------------------
     in the name of the Subordination Agent maintained at an Eligible
     Institution, which shall be the Subordination Agent if it shall so qualify,
     into which all amounts drawn under the Class A-1 Liquidity Facility
     pursuant to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
                 --------------  ------    ------

          "Class A-1 Certificateholder" means, at any time, any holder of one or
           ---------------------------
     more Class A-1 Certificates.

          "Class A-1 Certificates" means the certificates issued by the Class A-
           ----------------------
     1 Trust, substantially in the form of Exhibit A to the Class A-1 Trust
     Agreement, and authenticated by the Class A-1 Trustee, representing
     fractional undivided interests in the Class A-1 Trust, and any certificates
     issued in exchange therefor or replacement thereof pursuant to the terms of
     the Class A-1 Trust Agreement.

          "Class A-1 Liquidity Facility" means, initially, the Revolving Credit
           ----------------------------
     Agreement, dated as of July 31, 2000, between the Subordination Agent, as
     agent and trustee for the Class A-1 Trust, and the initial Class A-1
     Liquidity Provider relating to the Class A-1 Certificates, and, from and
     after the replacement of such Revolving Credit Agreement pursuant hereto,
     the Replacement Liquidity Facility therefor, if any, in each case as
     amended, supplemented or otherwise modified from time to time in accordance
     with its terms.

          "Class A-1 Liquidity Provider" means Landesbank Hessen-Thuringen
           ----------------------------
     Girozentrale or any Replacement Liquidity Provider or Replacement Liquidity
     Providers that have issued a Replacement Liquidity Facility to replace the
     Class A-1 Liquidity Facility pursuant to Section 3.6(c) or 3.6(e).
                                              --------------    ------

          "Class A-1 Trust" means United Airlines 2000-1A-1 Pass Through Trust
           ---------------
     created and administered pursuant to the Class A-1 Trust Agreement.

          "Class A-1 Trust Agreement" means the Class A-1 Trust Supplement,
           -------------------------
     dated as of July 31, 2000, between United and State Street, together with
     the Basic Pass Through Trust Agreement, as each may be amended,
     supplemented or otherwise modified from time to time in accordance with its
     terms.

          "Class A-1 Trust Supplement" shall mean a Trust Supplement that (i)
           --------------------------
     creates a separate Trust for the benefit of the Holders of the Class A-1
     Certificates, (ii) authorizes the issuance of the Class A-1 Certificates
     and (iii) establishes the terms of the Class A-1 Certificates.

          "Class A-1 Trustee" means State Street Bank and Trust Company of
           -----------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the Class A-1 Trust Agreement, together with any
     successor trustee appointed pursuant thereto.

                                       8
<PAGE>

          "Class A-2 Cash Collateral Account" means an Eligible Deposit Account
           ---------------------------------
     in the name of the Subordination Agent maintained at an Eligible
     Institution, which shall be the Subordination Agent if it shall so qualify,
     into which all amounts drawn under the Class A-2 Liquidity Facility
     pursuant to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
                 --------------  ------    ------

          "Class A-2 Certificateholder" means, at any time, any holder of one or
           ---------------------------
     more Class A-2 Certificates.

          "Class A-2 Certificates" means the certificates issued by the Class A-
           ----------------------
     2 Trust, substantially in the form of Exhibit A to the Class A-2 Trust
     Agreement, and authenticated by the Class A-2 Trustee, representing
     fractional undivided interests in the Class A-2 Trust, and any certificates
     issued in exchange therefor or replacement thereof pursuant to the terms of
     the Class A-2 Trust Agreement.

          "Class A-2 Liquidity Facility" means, initially, the Revolving Credit
           ----------------------------
     Agreement, dated as of July 31, 2000, between the Subordination Agent, as
     agent and trustee for the Class A-2 Trust, and the initial Class A-2
     Liquidity Provider relating to the Class A-2 Certificates, and, from and
     after the replacement of such Revolving Credit Agreement pursuant hereto,
     the Replacement Liquidity Facility therefor, if any, in each case as
     amended, supplemented or otherwise modified from time to time in accordance
     with its terms.

          "Class A-2 Liquidity Provider" means Landesbank Hessen-Thuringen
           ----------------------------
     Girozentrale or any Replacement Liquidity Provider or Replacement Liquidity
     Providers that have issued a Replacement Liquidity Facility to replace the
     Class A-2 Liquidity Facility pursuant to Section 3.6(c) or 3.6(e).
                                              --------------    ------

          "Class A-2 Trust" means United Airlines 2000-1A-2 Pass Through Trust
           ---------------
     created and administered pursuant to the Class A-2 Trust Agreement.

          "Class A-2 Trust Agreement" means the Class A-2 Trust Supplement,
           -------------------------
     dated as of July 31, 2000, between United and State Street, together with
     the Basic Pass Through Trust Agreement, as each may be amended,
     supplemented or otherwise modified from time to time in accordance with its
     terms.

          "Class A-2 Trust Supplement" shall mean a Trust Supplement that (i)
           --------------------------
     creates a separate Trust for the benefit of the Holders of the Class A-2
     Certificates, (ii) authorizes the issuance of Class A-2 Certificates and
     (iii) establishes the terms of the Class A-2 Certificates.

          "Class A-2 Trustee" means State Street Bank and Trust Company of
           -----------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the Class A-2 Trust Agreement, together with any
     successor trustee appointed pursuant thereto.

                                       9
<PAGE>

          "Class B Cash Collateral Account" means an Eligible Deposit Account in
           -------------------------------
     the name of the Subordination Agent maintained at an Eligible Institution,
     which shall be the Subordination Agent if it shall so qualify, into which
     all amounts drawn under the Class B Liquidity Facility pursuant to Section
                                                                        -------
     3.6(c), 3.6(d) or 3.6(i) shall be deposited.
     ------  ------    ------

          "Class B Certificateholder" means, at any time, any holder of one or
           -------------------------
     more Class B Certificates.

          "Class B Certificates" means the certificates issued by the Class B
           --------------------
     Trust, substantially in the form of Exhibit A to the Class B Trust
     Agreement, and authenticated by the Class B Trustee, representing
     fractional undivided interests in the Class B Trust, and any certificates
     issued in exchange therefor or replacement thereof pursuant to the terms of
     the Class B Trust Agreement.

          "Class B Liquidity Facility" means, initially, the Revolving Credit
           --------------------------
     Agreement, dated as of July 31, 2000, between the Subordination Agent, as
     agent of the Trustee, and the initial Class B Liquidity Provider relating
     to the Class B Certificates, and, from and after the replacement of such
     Revolving Credit Agreement pursuant hereto, the Replacement Liquidity
     Facility therefor, if any, in each case as amended, supplemented or
     otherwise modified from time to time in accordance with its terms.

          "Class B Liquidity Provider" means Landesbank Hessen-Thuringen
           --------------------------
     Girozentrale or any Replacement Liquidity Provider or Replacement Liquidity
     Providers that have issued a Replacement Liquidity Facility to replace the
     Class B Liquidity Facility pursuant to Section 3.6(c) or 3.6(e).
                                            --------------    ------

          "Class B Trust" means United Airlines 2000-1B Pass Through Trust
           -------------
     created and administered pursuant to the Class B Trust Agreement.

          "Class B Trust Agreement" means the Class B Trust Supplement, dated as
           -----------------------
     of July 31, 2000, between United and State Street, together with the Basic
     Pass Through Trust Agreement, as each may be amended, supplemented or
     otherwise modified from time to time in accordance with its terms.

          "Class B Trust Supplement" shall mean a Trust Supplement that (i)
           ------------------------
     creates a separate Trust for the benefit of the Holders of the Class B
     Certificates, (ii) authorizes the issuance of Class B Certificates and
     (iii) establishes the terms of the Class B Certificates.

          "Class B Trustee" means State Street Bank and Trust Company of
           ---------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the Class B Trust Agreement, together with any
     successor trustee appointed thereto.

                                       10
<PAGE>

          "Class C-1 Certificateholder" means, at any time, any holder of one or
           ---------------------------
     more Class C-1 Certificates.

          "Class C-1 Certificate Purchase Agreement" means the Class C-1
           ----------------------------------------
     Certificate Purchase Agreement, dated as of July 31, 2000, between the
     Class C-1 Trustee and Four Star Leasing, Inc., as amended, supplemented or
     otherwise modified from time to time in accordance with its terms.

          "Class C-1 Certificates" means the certificates issued by the Class C-
           ----------------------
     1 Trust, substantially in the form of Exhibit A to the Class C-1 Trust
     Agreement, and authenticated by the Class C-1 Trustee, representing
     fractional undivided interests in such Class C-1 Trust, and any
     certificates issued in exchange therefor or in replacement thereof pursuant
     to the terms of such Class C-1 Trust Agreement.

          "Class C-1 Trust" means United Airlines 2000-1C-1 Pass Through Trust
           ---------------
     created and administered pursuant to the Class C-1 Trust Agreement.

          "Class C-1 Trust Agreement" means the Class C-1 Trust Supplement,
           -------------------------
     dated as of July 31, 2000, between United and State Street, together with
     the Basic Pass Through Trust Agreement, as each may be amended,
     supplemented or otherwise modified from time to time in accordance with its
     terms.

          "Class C-1 Trust Supplement" shall mean a Trust Supplement that (i)
           --------------------------
     creates a separate Trust for the benefit of the Holders of the Class C-1
     Certificates, (ii) authorizes the issuance of Class C-1 Certificates and
     (iii) establishes the terms of the Class C-1 Certificates.

          "Class C-1 Trustee" means State Street Bank and Trust Company of
           -----------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the Class C-1 Trust Agreement, together with any
     successor trustee appointed thereto.

          "Class C-2 Certificateholder" means, at any time, any holder of one or
           ---------------------------
     more Class C-2 Certificates.

          "Class C-2 Certificate Purchase Agreement" means the Class C-2
           ----------------------------------------
     Certificate Purchase Agreement, dated as of July 31, 2000, between the
     Class C-2 Trustee and Four Star Leasing, Inc., as amended, supplemented or
     otherwise modified from time to time in accordance with its terms.

          "Class C-2 Certificates" means the certificates issued by the Class C-
           ----------------------
     2 Trust, substantially in the form of Exhibit A to the Class C-2 Trust
     Agreement, and authenticated by the Class C-2 Trustee, representing
     fractional undivided interests in such Class C-2 Trust,

                                       11
<PAGE>

     and any certificates issued in exchange therefor or in replacement thereof
     pursuant to the terms of such Class C-2 Trust Agreement.

          "Class C-2 Trust" means United Airlines 2000-1C-2 Pass Through Trust
           ---------------
     created and administered pursuant to the Class C-2 Trust Agreement.

          "Class C-2 Trust Agreement" means the Class C-2 Trust Supplement,
           -------------------------
     dated as of July 31, 2000, between United and State Street, together with
     the Basic Pass Through Trust Agreement, as each may be amended,
     supplemented or otherwise modified from time to time in accordance with its
     terms.

          "Class C-2 Trust Supplement" shall mean a Trust Supplement that (i)
           --------------------------
     creates a separate Trust for the benefit of the Holders of the Class C-2
     Certificates, (ii) authorizes the issuance of Class C-2 Certificates and
     (iii) establishes the terms of the Class C-2 Certificates.

          "Class C-2 Trustee" means State Street Bank and Trust Company of
           -----------------
     Connecticut, National Association, not in its individual capacity but
     solely as trustee under the Class C-2 Trust Agreement, together with any
     successor trustee appointed thereto.

          "Class D Certificates" means any pass through certificates issued by
           --------------------
     any Class D Trust, representing fractional undivided interests in the Class
     D Trust, and any certificates issued in exchange therefor or in replacement
     thereof pursuant to the terms of a Class D Trust Supplement and basic pass
     through trust agreement executed in connection therewith.

          "Class D Trust" means the United Airlines Pass Through Trust 2000-1D,
           -------------
     if and when created.

          "Class D Trust Supplement" shall mean a Trust Supplement that (i)
           ------------------------
     creates a separate trust for the benefit of the Holders of the Class D
     Certificates, (ii) authorizes the issuance of Class D Certificates and
     (iii) establishes the terms of the Class D Certificates.

          "Closing Date" means July 31, 2000.
           ------------

          "Code" means the Internal Revenue Code of 1986, as amended from time
           ----
     to time, and Treasury Regulations promulgated thereunder.

          "Collection Account" means the Eligible Deposit Account established by
           ------------------
     the Subordination Agent pursuant to Section 2.2(a) into and from which the
                                         --------------
     Subordination Agent shall make deposits and withdrawals in accordance with
     this Agreement.

          "Confirmation", with respect to any Transaction, means the
           ------------
     Confirmation, dated as of July 31, 2000, between AFE Trust and United
     evidencing such Transaction and incorporating therein the terms and
     conditions of the Swap Agreement.

                                       12
<PAGE>

          "Consent Notice" has the meaning specified in Section 3.6(d).
           --------------

          "Consent Period" has the meaning specified in Section 3.6(d).
           --------------

          "Controlling Party" means the Person entitled to act as such pursuant
           -----------------
     to the terms of Section 2.6.
                     -----------

          "Corporate Trust Office" means, with respect to any Trustee, the
           ----------------------
     Subordination Agent or any Indenture Trustee, the office of such Person in
     the city at which, at any particular time, its corporate trust business
     shall be principally administered.

          "Current Distribution Date" means a Distribution Date specified as a
           -------------------------
     reference date for calculating the Expected Distributions or the Adjusted
     Expected Distributions with respect to the Certificates of any Trust as of
     such Distribution Date.

          "Current Pool Balance" means the amount described in clause (B)(i) of
           --------------------                                -------------
     the definition of "Adjusted Expected Distributions."

          "Designated Representatives" means the Subordination Agent
           --------------------------
     Representatives, the Trustee Representatives and the LP Representatives
     identified under Section 2.5.
                      -----------

          "Distribution Date" means a Regular Distribution Date or a Special
           -----------------
     Distribution Date.

          "Dollars" means United States dollars.
           -------

          "Downgrade Drawing" has the meaning assigned to such term in Section
           -----------------                                           -------
     3.6(c).
     ------

          "Downgraded Facility" has the meaning assigned to such term in Section
           -------------------                                           -------
     3.6(c).
     ------

          "Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
           -------
     Drawing or a Downgrade Drawing, as the case may be.

          "Eligible Deposit Account" means either (a) a segregated account with
           ------------------------
     an Eligible Institution or (b) a segregated trust account with the
     corporate trust department of 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), having
     corporate trust powers and acting as trustee for funds deposited in such
     account, so long as any of the securities of such depository institution
     has a long-term unsecured debt rating from each Rating Agency of at least
     "A-3" or its equivalent.  An Eligible Deposit Account may be maintained
     with a Liquidity Provider so long as such Liquidity Provider is an Eligible
     Institution; provided, however, that such Liquidity Provider shall have
                  --------  -------
     waived

                                       13
<PAGE>

     all rights of set-off and counterclaim with respect to such account; and
     provided, further, that each institution at which any Eligible Deposit
     --------  -------
     Account is maintained shall agree, for all purposes of the applicable 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
     credited to such account shall be treated as a "financial asset" (as
     defined in Section 8-102(9) of the UCC), (c) the Subordination Agent shall
     be the "entitlement holder" (as defined in Section 8-102(7) of the UCC) in
     respect of such account, (d) such institution shall comply with all
     entitlement orders issued by the Subordination Agent to the exclusion of
     any other Person and (e) the "securities intermediary jurisdiction" (under
     Section 8-110(e) of the UCC) shall be the State of Illinois.

          "Eligible Institution" means (a) the corporate trust department of the
           --------------------
     Subordination Agent or any Trustee, as applicable, so long as it has a long
     term unsecured debt rating from each Rating Agency of at least "A-3" or its
     equivalent, 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 each Rating Agency of at least "A-3" or its
     equivalent.

          "Eligible Investments" means each of (i) obligations of, or guaranteed
           --------------------
     by, the United States Government, (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-1" or its equivalent by Moody's and at
     least "A-1" or its equivalent by Standard & Poor's, (iii) certificates of
     deposit, time deposits 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 having a combined capital
     and surplus in excess of $500,000,000 which banks or their holding
     companies have a rating of "A" or its equivalent by Moody's or Standard &
     Poor's; 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) or any subsidiary thereof and
                                      ------------
     (v) repurchase agreements with any financial institution having combined
     capital and surplus of at least $500,000,000 with any of the obligations
     described in clauses (i) through (iv) as collateral; provided that all
                  -----------         ----                --------
     Eligible Investments held pursuant to this Agreement must be held in an
     Eligible Deposit Account.

          "Equipment Note Indenture" means, with respect to the Equipment Notes,
           ------------------------
     each of the one or more separate trust indenture and security agreements or
     trust indentures and mortgages or similar agreements described on Schedule
     I attached to this Agreement, as each such indenture may be amended or
     supplemented in accordance with its respective terms.

          "Equipment Notes" means, collectively, the Leased Equipment Notes, the
           ---------------
     747 Leased Equipment Notes and the United Equipment Notes.

                                       14
<PAGE>

          "Eurodollar Rate" has the meaning assigned to such term in the AFE
           ---------------
     Indenture.

          "Expected Distributions" means, with respect to the Certificates of
           ----------------------
     any Trust on any Current Distribution Date, the sum of (x) accrued and
     unpaid interest on such Certificates and (y) the difference between (A) the
     Pool Balance of such Certificates as of the preceding Distribution Date
     (or, if the Current Distribution Date is the first Distribution Date, the
     original aggregate face amount of the Certificates of such Trust) and (B)
     the Pool Balance of such Certificates as of the Current Distribution Date,
     calculated on the basis that (i) the principal of the Trust Owned Notes
     held in such Trust and any related Leased Equipment Notes has been paid
     when due (whether at stated maturity, upon redemption, prepayment, purchase
     or Acceleration or otherwise) and such payments have been distributed to
     the holders of such Certificates and (ii) the principal of any Trust Owned
     Notes formerly held in such Trust that have been sold pursuant to the terms
     hereof has been paid in full and such payments have been distributed to the
     holders of such Certificates.  For purposes of calculating Expected
     Distributions, any Additional Payment paid on the Trust Owned Notes held in
     any Trust which has not been distributed to the Certificateholders of such
     Trust (other than such Additional Payment or a portion thereof applied to
     the payment of interest on the Certificates of such Trust or the reduction
     of the Pool Balance of such Trust) shall be added to the amount of such
     Expected Distributions.

          "Expiry Date" with respect to any Liquidity Facility, shall have the
           -----------
     meaning set forth in such Liquidity Facility.

          "Fee Letter" means the Fee Letter, dated as of July 31, 2000, between
           ----------
     United, Landesbank Hessen-Thuringen Girozentrale and the Subordination
     Agent with respect to the initial Liquidity Facilities, and any fee letter
     entered into between the Subordination Agent and any Replacement Liquidity
     Provider.

          "Final Distributions" means, with respect to the Certificates of any
           -------------------
     Trust on any Distribution Date, the sum of (x) the aggregate amount of all
     accrued and unpaid interest on such Certificates and (y) the Pool Balance
     of such Certificates as of the preceding Distribution Date.  For purposes
     of calculating Final Distributions, any Additional Payment paid on the
     Trust Owned Notes held in any Trust which has not been distributed to the
     Certificateholders of such Trust (other than such Additional Payment or a
     portion thereof applied to the payment of interest on the Certificates of
     such Trust or the reduction of the Pool Balance of such Trust) shall be
     added to the amount of such Final Distributions.

          "Final Drawing" has the meaning assigned to such term in Section
           -------------                                           -------
3.6(i).
------

          "Final Maturity Date" for the Class A-1 Certificates means July 1,
           -------------------
     2015, for the Class A-2 Certificates means January 1, 2012, for the Class
B certificates means January 1, 2013.

                                       15
<PAGE>

     for the Class C-1 Certificates means January 1, 2008, and for the Class C-2
     Certificates means July 1, 2015.

          "Final Payment Date", means, with respect to any Transaction evidenced
           ------------------
     by a Confirmation, the date on which a "Final Periodic Payment" is due
     under and as defined in such Confirmation.

          "Four Star Leasing, Inc." means Four Star Leasing, Inc., a Delaware
           -----------------------
     corporation, and its successors and assigns.

          "Indenture" means the AFE Indenture, the 747 Leased Aircraft
           ---------
     Indenture, each of the Leased Aircraft Indentures and each of the Owned
     Aircraft Indentures listed on Schedule 1 hereto, as the same may be
     amended, supplemented or otherwise modified from time to time in accordance
     with its terms.

          "Indenture Default" means, with respect to any Indenture, any
           -----------------
     Indenture Event of Default (as such term is defined in such Indenture)
     thereunder.

          "Indenture Estate" means, with respect to any Indenture, the
           ----------------
     "Indenture Estate" referred to therein.

          "Indenture Trustee" means, with respect to any Indenture, the
           -----------------
     indenture trustee thereunder.

          "Interest Drawing" has the meaning assigned to such term in Section
           ----------------                                           -------
     3.6(a).
     ------

          "Investment Earnings" means investment earnings on funds on deposit in
           -------------------
     the Trust Accounts net of losses and investment expenses of the
     Subordination Agent in making such investments.

          "Junior Qualified Substitute", means, with respect to any Transaction
           ---------------------------
     evidenced by a Confirmation, the "Junior Qualified Substitute" under and as
     defined in such Confirmation.

          "Lease" means, with respect to the Equipment Note Indenture pertaining
           -----
     to each Leased Aircraft or the 747 Leased Aircraft, as applicable, the
     "Lease" referred to therein.

          "Leased Aircraft" has the meaning assigned to such term in the
           ---------------
     preliminary statements of this Agreement.

          "Leased Aircraft Indenture" means, with respect to the Leased
           -------------------------
     Equipment Notes, each of the one or more trust indenture and security
     agreements or trust indenture and mortgages

                                       16
<PAGE>

     or similar agreements described on Schedule 1 attached to this Agreement,
     as such indenture may be amended or supplemented in accordance with its
     terms.

          "Leased Aircraft Participation Agreement" means, with respect to the
           ---------------------------------------
     Equipment Note Indenture pertaining to each Leased Aircraft, the
     "Participation Agreement" referred to therein.

          "Leased Equipment Note Purchase Agreement" means the Leased Equipment
           ----------------------------------------
     Note Purchase Agreement, dated as of July 31, 2000, for the respective
     Aircraft between the Seller as defined therein and AFE Trust.

          "Leased Equipment Notes" means the notes, certificates or instruments
           ----------------------
     issued pursuant to the Leased Aircraft Indentures in respect of the Leased
     Aircraft, collectively, and in each case, any Leased Equipment Notes issued
     in exchange therefor or replacement thereof pursuant to the terms of such
     Equipment Note Indentures.

          "Lien" means any mortgage, pledge, lien, charge, claim, disposition of
           ----
     title, encumbrance, lease, sublease, or security interest of any kind,
     including any arising under any conditional sales or other title retention
     agreement.

          "Liquidity Event of Default," with respect to any Liquidity Facility,
           --------------------------
     has the meaning assigned to such term in such Liquidity Facility.

          "Liquidity Expenses" means, with respect to the Liquidity Facilities,
           ------------------
     all Liquidity Obligations other than (i) the principal amount of any
     Drawings under the Liquidity Facilities and (ii) any interest accrued on
     such Liquidity Obligations.

          "Liquidity Facility" means, at any time, the Class A-1 Liquidity
           ------------------
     Facility, the Class A-2 Liquidity Facility or the Class B Liquidity
     Facility, as applicable.

          "Liquidity Obligations" means, with respect to the Liquidity
           ---------------------
     Facilities, all principal, interest, fees and other amounts owing to the
     Liquidity Providers under the Liquidity Facilities, the AFE Note Purchase
     Agreement, the Owned Aircraft Participation Agreements, the 747 Leased
     Aircraft Participation Agreement and the Fee Letter.

          "Liquidity Provider" means the Class A-1 Liquidity Provider, the Class
           ------------------
     A-2 Liquidity Provider and/or the Class B Liquidity Provider, as
     applicable.

          "LP Incumbency Certificate" has the meaning assigned to such term in
           -------------------------
     Section 2.5(c).
     --------------

          "LP Representatives" has the meaning assigned to such term in Section
           ------------------                                           -------
     2.5(c).
     ------

                                       17
<PAGE>

          "LTV Appraisals" has the meaning assigned to such term in Section
           --------------                                           -------
     4.1(a).
     ------

          "LTV Collateral Amount" of any Aircraft for any Class of Certificates
           ---------------------
     means, as of any Distribution Date, the lesser of (i) the LTV Ratio for
     such Class of Certificates multiplied by the Appraised Current Market Value
     of such Aircraft (or with respect to any such Aircraft that has suffered an
     Event of Loss under and as defined in the relevant Lease (in the case of a
     Leased Aircraft or the 747 Leased Aircraft) or Owned Aircraft Indenture (in
     the case of an Owned Aircraft), the amount of the insurance proceeds paid
     to the related Indenture Trustee in respect thereof to the extent then held
     by such Indenture Trustee (and/or on deposit in the Special Payments
     Account) or payable to such Indenture Trustee in respect thereof) and (ii)
     the outstanding principal amount of the Equipment Notes secured by such
     Aircraft after giving effect to any principal payments of such Equipment
     Notes on or before such Distribution Date.

          "LTV Ratio" means for the Class A-1 Certificates 45.0%, the Class A-2
           ---------
     Certificates 45.0%, the Class B Certificates 60%, the Class C-1
     Certificates 70% and for the Class C-2 Certificates 70%.

          "Make-Whole Amount" shall have the meaning set forth in the
           -----------------
     Indentures.

          "Minimum Sale Price" means, with respect to any Aircraft or the
           ------------------
     Equipment Notes issued in respect of such Aircraft, at any time, the lesser
     of (a) 75% of the Appraised Current Market Value of such Aircraft and (b)
     the aggregate outstanding principal amount of such Equipment Notes, plus
     accrued and unpaid interest thereon, plus in the case of the Owned Aircraft
     or the United Equipment Notes, any Swap Termination Amount and any other
     unpaid Swap Obligation payable under the Indenture to which such Equipment
     Notes relate.

          "Moody's" means Moody's Investors Service, Inc.
           -------

          "Non-Controlling Party" means, at any time, any Trustee or Liquidity
           ---------------------
     Provider that is not the Controlling Party at such time.

          "Non-Extended Facility" has the meaning assigned to such term in
           ---------------------
     Section 3.6(d).
     --------------

          "Non-Extension Drawing" has the meaning assigned to such term in
           ---------------------
     Section 3.6(d).
     --------------

          "Non-Performing Equipment Note" means an Equipment Note issued
           -----------------------------
     pursuant to an Indenture that is not a Performing Equipment Note.

          "Note Purchase Agreements" means, collectively, the AFE Note Purchase
           ------------------------
     Agreement, the United Equipment Note Purchase Agreement, the 747 Leased
     Equipment Note Purchase Agreement and the Leased Equipment Note Purchase
     Agreement.

                                       18
<PAGE>

          "Notes" means, collectively, the Leased Equipment Notes, the 747
           -----
     Leased Equipment Notes, the AFE Notes and the United Equipment Notes.

          "Officer's Certificate" of any Person means a certification signed by
           ---------------------
     a Responsible Officer of such Person.

          "Operative Agreements" means this Agreement, the Liquidity Facilities,
           --------------------
     the Fee Letter, each Confirmation, the Indentures, the Trust Agreements,
     the Underwriting Agreement, the Note Purchase Agreements, the Class C-1
     Certificate Purchase Agreement, the Class C-2 Certificate Purchase
     Agreement, the Leases, the Participation Agreements, the Notes and the
     Certificates, together with all exhibits and schedules included with any of
     the foregoing.

          "Outstanding" means, when used with respect to each Class of
           -----------
     Certificates, as of the date of determination, all Certificates of such
     Class theretofore authenticated and delivered under the related Trust
     Agreements, except:

              (i)    Certificates of such Class theretofore canceled by the
          Registrar (as defined in such Trust Agreement) or delivered to the
          Trustee thereunder or such Registrar for cancellation;

              (ii)   Certificates of such Class for which money in the full
          amount required to make the final distribution with respect to such
          Certificates pursuant to Section 11.01 of such Trust Agreement has
          been theretofore deposited with the related Trustee in trust for the
          holders of such Certificates as provided in Section 4.01 of such Trust
          Agreement pending distribution of such money to such
          Certificateholders pursuant to such final distribution payment; and

              (iii)  Certificates of such Class in exchange for or in lieu of
          which other Certificates of like Class have been authenticated and
          delivered pursuant to such Trust Agreement;

     provided, however, that in determining whether the holders of the requisite
     --------  -------
     Outstanding amount of such Certificates have given any request, demand,
     authorization, direction, notice, consent or waiver hereunder, any
     Certificates owned by United or any of its Affiliates shall be disregarded
     and deemed not to be Outstanding, except that, in determining whether such
     Trustee shall be protected in relying upon any such request, demand,
     authorization, direction, notice, consent or waiver, only Certificates that
     such Trustee knows to be so owned shall be so disregarded.  Notwithstanding
     the foregoing, (x) if United or any of its Affiliates shall own 100% of the
     Certificates, such Certificates shall not be so disregarded and (y)
     Certificates so owned by United or any of its Affiliates that have been
     pledged in good faith may be regarded as Outstanding if the pledgee
     establishes to the satisfaction of the Trustee

                                       19
<PAGE>

     the pledgee's right so to act with respect to such Certificates and that
     the pledgee is not United or any of its Affiliates.

          "Overdue Scheduled Payment" means any Scheduled Payment that is not in
           -------------------------
     fact received by the Subordination Agent within five days after the
     Scheduled Payment Date relating thereto.

          "Owned Aircraft" has the meaning assigned to such term in the
           --------------
     preliminary statements of this Agreement.

          "Owned Aircraft Indenture" means, with respect to the United Equipment
           ------------------------
     Notes, each of the one or more trust indenture and security agreements or
     trust indenture and mortgages or similar agreements described on Schedule 1
     attached hereto, as such indenture may be amended or supplemented in
     accordance with its terms.

          "Owned Aircraft Participation Agreement" means, with respect to the
           --------------------------------------
     Indenture pertaining to each Owned Aircraft, the "Participation Agreement"
     referred to therein.

          "Owner Trustee" means, with respect to any Leased Aircraft Indenture
           -------------
     or the 747 Leased Aircraft Indenture pertaining to a Leased Aircraft or 747
     Leased Aircraft, the "Owner Trustee" (as defined therein) not in its
     individual capacity but solely as trustee under the related owner trust
     agreement, together with any successor trustee appointed pursuant to such
     owner trust agreement.

          "Participation Agreement" means any Owned Aircraft Participation
           -----------------------
     Agreement, 747 Leased Aircraft Participation Agreement or Leased Aircraft
     Participation Agreement, as applicable.

          "Performing Equipment Note" means a Leased Equipment Note, a 747
           -------------------------
     Leased Equipment Note or a United Equipment Note issued pursuant to an
     Indenture with respect to which no payment default has occurred and is
     continuing (without giving effect to any Acceleration); provided, however,
                                                             --------  -------
     that in the event of a bankruptcy proceeding under Title 11 of the United
     States Code (the "Bankruptcy Code") under which United is a debtor, any
                       ---------------
     payment default existing during the 60-day period under Section
     1110(a)(2)(A) of the Bankruptcy Code (or such longer period as may apply
     under Section 1110(b) of the Bankruptcy Code) (the "Section 1110 Period")
                                                         -------------------
     shall not be taken into consideration, unless during the Section 1110
     Period the trustee in such proceeding or United (1) fails to agree pursuant
     to Section 1110 of the Bankruptcy Code to perform its obligations under the
     Lease related to such Leased Equipment Note or 747 Leased Equipment Note
     (in the case of the Leased Aircraft or the 747 Leased Aircraft) or under
     the Owned Aircraft Indenture related to such United Equipment Note (in the
     case of the Owned Aircraft) or (2) does not  cure any such payment default
     under Section 1110(a)(2)(B) of the Bankruptcy Code before the

                                       20
<PAGE>

     expiration of the period applicable thereto as specified in Section
     1110(a)(2)(B) of the Bankruptcy Code.

          "Performing Note Deficiency" means any time that less than 65% of the
           --------------------------
     then aggregate outstanding principal amount of all Equipment Notes are
     Performing Equipment Notes.

          "Periodic Swap Payment" means, with respect to any Transaction
           ---------------------
     evidenced by a Confirmation, as of any Swap Payment Date, the "Periodic
     Swap Payment", if any, under, as defined in and payable under such
     Confirmation or the aggregate amount, if any, of any comparable periodic
     payment under any related Qualified Substitute, in either case payable to
     the Issuer on such Swap Payment Date.

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

          "Pool Balance" means, with respect to the Certificates of a Class, as
           ------------
     of any date, (i) the original aggregate face amount of the Certificates of
     such Class less (ii) the aggregate amount of all payments made in respect
                ----
     of the Certificates of such Class other than payments made in respect of
     interest or Additional Payment thereon or reimbursement of any costs and
     expenses in connection therewith.  The Pool Balance for each Class of
     Certificates as of any Distribution Date shall be computed after giving
     effect to the payment of principal, if any, on the Notes held in the
     related Trust and the distribution thereof to be made on such date.

          "Proceeding" means any suit in equity, action at law or other judicial
           ----------
     or administrative proceeding.

          "PTC Event of Default" means, with respect to the Trust Agreement of
           --------------------
     any Class, the failure to pay within 10 Business Days of the due date
     thereof: (i) the outstanding Pool Balance of the applicable Class of
     Certificates on the Final Maturity Date for such Class or (ii) interest due
     on such Certificates on any Distribution Date (unless, in the case of the
     Class A-1, Class A-2 or Class B Certificates, the Subordination Agent shall
     have made an Interest Drawing or a withdrawal from a Cash Collateral
     Account with respect thereto in an amount sufficient to pay such interest
     and shall have distributed such amount to the Trustee entitled thereto).

          "Rating Agencies" means, collectively, at any time, each nationally
           ---------------
     recognized rating agency that shall have been requested to rate the Class
     A-1 Certificates, the Class A-2 Certificates and the Class B Certificates
     and that shall then be rating such Certificates.  The initial Rating
     Agencies shall be Moody's and Standard & Poor's.

                                       21
<PAGE>

          "Ratings Confirmation" means, with respect to any action proposed to
           --------------------
     be taken, a written confirmation from each of the Rating Agencies that such
     action would not result in (i) a reduction of the rating for the Class A-1
     Certificates, the Class A-2 Certificates, the Class B Certificates or the
     AFE Trust Certificates below the then current rating for such Class of
     Certificates or the AFE Trust Certificate, as applicable,  or (ii) a
     withdrawal or suspension of the rating of the Class A-1 Certificates, the
     Class A-2 Certificates, the Class B Certificates or the AFE Trust
     Certificates.

          "Regular Distribution Dates" means each January 1 and July 1,
           --------------------------
     commencing on January 1, 2001; provided, however, that, if any such day
                                    --------  -------
     shall not be a Business Day, the related distribution for each Class of
     Certificates shall be made on the next Business Day without additional
     interest accruing at the rate applicable to such Class of Certificates.

          "Replacement Liquidity Facility" means, for any Liquidity Facility, an
           ------------------------------
     irrevocable revolving credit agreement issued by a one or more Replacement
     Liquidity Providers for the same term as the Liquidity Facility being
     replaced in substantially the form of the replaced Liquidity Facility,
     including reinstatement provisions, or in such other form (which may
     include a letter of credit, surety bond, financial insurance policy or
     guaranty) as shall permit the Rating Agencies to confirm in writing their
     respective ratings then in effect for the Class A-1 Certificates, the Class
     A-2 Certificates and the Class B Certificates (before the downgrading of
     such ratings, if any, as a result of the downgrading of the Liquidity
     Provider), in a face amount (or in an aggregate face amount) equal to the
     Required Amount for such Liquidity Facility and issued by a Replacement
     Liquidity Provider.  Without limitation of the form that a Replacement
     Liquidity Facility otherwise may have pursuant to the preceding sentence, a
     Replacement Liquidity Facility for any Class of Certificates may have a
     stated expiration date earlier than 15 days after the Final Maturity Date
     of such Class of Certificates so long as such Replacement Liquidity
     Facility provides for a Non-Extension Drawing as contemplated by Section
                                                                      -------
     3.6(d) hereof.
     ------

          "Replacement Liquidity Provider" means a Person having (i) short-term
           ------------------------------
     unsecured debt ratings issued by each Rating Agency that are equal to or
     higher than the Threshold Rating specified in clause (i) of the definition
     of Threshold Rating or (ii) if such Person does not have a short-term
     unsecured debt rating from each Rating Agency, long-term unsecured debt
     ratings issued by each Rating Agency that are equal to or higher than the
     Threshold Rating specified in clause (ii) of the definition of Threshold
     Rating.

          "Required Amount" means, with respect to each Liquidity Facility, or
           ---------------
     the Cash Collateral Account, for any Class, for any day, the sum of the
     aggregate amount of interest, calculated at the rate per annum equal to the
     Stated Interest Rate for the related Class of Certificates, that would be
     payable on such Class of Certificates on each of the three successive
     Regular Distribution Dates following such day or, if such day is a Regular
     Distribution Date, on such day and the succeeding two Regular Distribution
     Dates, in each

                                       22
<PAGE>

     case calculated on the basis of the Pool Balance of such Class of
     Certificates on such date and without regard to expected future payments of
     principal on such Class of Certificates.

          "Responsible Officer" means, (i) in the case of any Liquidity Provider
           -------------------
     that is a United States corporation, the Chairman of the Board of
     Directors, the President, the Treasurer, the Secretary, or any Vice
     President thereof, and in the case of any other Liquidity Provider, an
     officer or other duly authorized person responsible for the transactions
     contemplated by the Operative Agreements, (ii) in the case of each Trustee
     and the Subordination Agent, any officer in the Corporate Trust Department
     thereof or any other officer customarily performing functions similar to
     those performed by the persons who at the time shall be such officers or to
     whom any corporate trust matter is referred because of his knowledge of and
     familiarity with a particular subject and (iii) in any other case, an
     individual generally authorized to execute and deliver contracts on behalf
     of such entity.

          "Scheduled Payment" means, with respect to any Note, (i) any payment
           -----------------
     of principal and interest on such Note (other than an Overdue Scheduled
     Payment) due from the obligor thereon or (ii) in the case of the Class A-1
     Certificates, the Class A-2 Certificates or the Class B Certificates, any
     payment of interest on the corresponding Class of Certificates with funds
     drawn under any Liquidity Facility or withdrawn from a Cash Collateral
     Account, which payment represents the installment of principal at the
     stated maturity of such installment of principal on such Note, the payment
     of regularly scheduled interest accrued on the unpaid principal amount of
     such Note, or both; provided, however, that any payment of principal of,
                         --------  -------
     Additional Payment, if any, or interest resulting from the redemption or
     purchase of any Note shall not constitute a Scheduled Payment.

          "Scheduled Payment Date" means, with respect to any Scheduled Payment,
           ----------------------
     the date on which such Scheduled Payment is scheduled to be made.

          "Section 2.4(b) Fraction" has the meaning assigned to such term in
           -----------------------
     Section 2.4(b).
     --------------

          "Senior Qualified Substitute", means, with respect to any Transaction
           ---------------------------
     evidenced by a Confirmation, the "Senior Qualified Substitute" under and as
     defined in such Confirmation.

          "Series A-1 747 Leased Equipment Notes" means the 7.783% Series A-1
           -------------------------------------
     747 Leased Equipment Notes issued pursuant to the 747 Leased Aircraft
     Indenture by the Owner Trustee thereunder and authenticated by the
     Indenture Trustee thereunder, and any such 747 Leased Equipment Notes
     issued in exchange therefor or replacement thereof pursuant to the terms of
     such 747 Leased Aircraft Indenture.

          "Series A-1 AFE Notes" means the 7.783% Series A-1 AFE Notes issued
           --------------------
     pursuant to the AFE Indenture by AFE Trust and authenticated by the
     Indenture Trustee thereunder,

                                       23
<PAGE>

     and any such AFE Notes issued in exchange therefor or replacement thereof
     pursuant to the terms of such AFE Indenture.

          "Series A-1 Equipment Notes" means, collectively, the Series A-1 747
           --------------------------
     Leased Equipment Notes, the Series A-1 AFE Notes and the Series A-1 United
     Equipment Notes.

          "Series A-1 United Equipment Notes" means the 7.783% Series A-1 United
           ---------------------------------
     Equipment Notes issued pursuant to each Owned Aircraft Indenture by United
     in the case of the Owned Aircraft, and authenticated by the respective
     Indenture Trustee thereunder, and any such United Equipment Notes issued in
     exchange therefor or replacement thereof pursuant to the terms of such
     Owned Aircraft Indenture.

          "Series A-2 AFE Notes" means the 7.730% Series A-2 AFE Notes issued
           --------------------
     pursuant to each AFE Indenture by AFE Trust and authenticated by the
     respective Indenture Trustee thereunder, and any such AFE Notes issued in
     exchange therefor or replacement thereof pursuant to the terms of such AFE
     Indenture.

          "Series A-2 Equipment Notes" means, collectively, the Series A-2 AFE
           --------------------------
     Notes and the Series A-2 United Equipment Notes.

          "Series A-2 United Equipment Notes" means the 7.730% Series A-2 United
           ---------------------------------
     Equipment Notes issued pursuant to each Owned Aircraft Indenture by United
     in the case of the Owned Aircraft, and authenticated by the respective
     Indenture Trustee thereunder, and any such United Equipment Notes issued in
     exchange therefor or replacement thereof pursuant to the terms of such
     Owned Aircraft Indenture.

          "Series B 747 Leased Equipment Notes" means the 8.030% Series B 747
           -----------------------------------
     Leased Equipment Notes issued pursuant to the 747 Leased Aircraft Indenture
     by the Owner Trustee thereunder and authenticated by the Indenture Trustee
     thereunder, and any such 747 Leased Equipment Notes issued in exchange
     therefor or replacement thereof pursuant to the terms of such 747 Leased
     Aircraft Indenture.

          "Series B AFE Notes" means the 8.030% Series B AFE Notes issued
           ------------------
     pursuant to each AFE Indenture by AFE Trust and authenticated by the
     respective Indenture Trustee thereunder and any such AFE Notes issued in
     exchange therefor or replacement thereof pursuant to the terms of such AFE
     Indenture.

          "Series B Equipment Notes" means, collectively, the Series B 747
           ------------------------
     Leased Equipment Notes, the Series B AFE Notes and the Series B United
     Equipment Notes.

          "Series B United Equipment Notes" means the 8.030% Series B United
           -------------------------------
     Equipment Notes issued pursuant to each Owned Aircraft Indenture by United
     in the case of the Owned

                                       24
<PAGE>

     Aircraft, and authenticated by the respective Indenture Trustee thereunder,
     and any such United Equipment Notes issued in exchange therefor or
     replacement thereof pursuant to the terms of such Owned Aircraft Indenture.

          "Series C-1 AFE Notes" means the Series C-1 AFE Notes issued pursuant
           --------------------
     to each AFE Indenture by AFE Trust and authenticated by the respective
     Indenture Trustee thereunder, and any such AFE Notes issued in exchange
     therefor or replacement thereof pursuant to the terms of such AFE
     Indenture.

          "Series C-2 747 Leased Equipment Notes" means the 8.450% Series C-2
           -------------------------------------
     747 Leased Equipment Notes issued pursuant to the 747 Leased Aircraft
     Indenture by the Owner Trustee thereunder and authenticated by the
     Indenture Trustee thereunder, and any such 747 Leased Equipment Notes
     issued in exchange therefor or replacement thereof pursuant to the terms of
     such 747 Leased Aircraft Indenture.

          "Series C-2 United Equipment Notes" means the 8.450% Series C-2 United
           ---------------------------------
     Equipment Notes  issued pursuant to each Owned Aircraft Indenture by United
     and authenticated by the respective Indenture Trustee thereunder, and any
     such United Equipment Notes issued in exchange therefor or replacement
     thereof pursuant to the terms of such Owned Aircraft Indenture.

          "Series D United Equipment Notes" means equipment notes, if any,
           -------------------------------
     designated as "Series D" and issued pursuant to any Owned Aircraft
     Indenture by United and authenticated by the Indenture Trustee thereunder,
     and any such equipment notes issued in exchange therefor or replacement
     thereof pursuant to the terms of such Indenture.

          "Special Distribution Date" means, with respect to any Special
           -------------------------
     Payment, the date chosen by the Subordination Agent pursuant to Section
                                                                     -------
     2.4(a) for the distribution of such Special Payment in accordance with this
     ------
     Agreement; provided, however, that, if any such day shall not be a Business
                --------  -------
     Day, the related distribution for each Class of Certificates shall be made
     on the next Business Day with additional interest accruing at the rate
     applicable to such Class of Certificates.

          "Special Payment" means any payment (other than a Scheduled Payment)
           ---------------
     in respect of, or any proceeds of, (i) any Note or (ii) the proceeds from a
     redemption pursuant to Section 2 of the Note Purchase Agreements.

          "Special Payments Account" means the Eligible Deposit Account created
           ------------------------
     pursuant to Section 2.2 as a sub-account to the Collection Account.
                 -----------

          "Standard & Poor's" means Standard & Poor's Ratings Services, a
           -----------------
     Division of The McGraw-Hill Companies, Inc.

                                       25
<PAGE>

          "State Street" has the meaning assigned to such term in the recital of
           ------------
     parties to this Agreement.

          "Stated Amount" with respect to any Liquidity Facility, means the
           -------------
     Maximum Commitment (as defined in such Liquidity Facility) of the
     applicable Liquidity Provider thereunder.

          "Stated Interest Rate" means (i) with respect to the Class A-1
           --------------------
     Certificates, 7.783% per annum, (ii) with respect to the Class A-2
     Certificates, 7.730% per annum, (iii) with respect to the Class B
     Certificates, 8.030% per annum, (iv) with respect to the Class C-1
     Certificates, Eurodollar Rate plus 0.900% per annum, and (v) with respect
     to the Class C-2 Certificates, 8.450% per annum.

          "Subordination Agent" has the meaning assigned to such term in the
           -------------------
     recital of parties to this Agreement.

          "Subordination Agent Incumbency Certificate" has the meaning assigned
           ------------------------------------------
     to such term in Section 2.5(a).
                     --------------

          "Subordination Agent Representatives" has the meaning assigned to such
           -----------------------------------
     term in Section 2.5(a).
             --------------

          "Swap Agreement" means the ISDA Master Agreement together with the
           --------------
     schedules and addenda attached thereto, as incorporated by reference into
     each Confirmation.

          "Swap Obligation" means, with respect to any Transaction evidenced by
           ---------------
     a Confirmation, any Periodic Swap Payment or Swap Termination Amount due
     and owing by the Swap Provider under such Confirmation.

          "Swap Payment Date" means, (x) with respect to any Transaction
           -----------------
     evidenced by a Confirmation, each "Periodic Swap Payment Date" under and as
     defined in such Confirmation and (y) after the termination of such
     Transaction, in the case of any related Qualified Substitute or Swap
     Substitute Account, January 1, 2001 and each January 1 and July 1 of each
     year thereafter until such Junior Qualified Substitute, Senior Qualified
     Substitute or Swap Substitute Account terminates in full in accordance with
     its terms and, in the case of clauses (x) and (y), the Final Payment Date
     for such Transaction.

          "Swap Termination Amount", means, with respect to each Confirmation,
           -----------------------
     the sum of the Senior Swap Termination Amount and the Junior Swap
     Termination Amount  payable by United, as the swap counterparty, under such
     Confirmation.

                                       26
<PAGE>

          "Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
           ---       -----
     tariffs, imposts and other charges of any kind (together with any and all
     interest, penalties, loss, damage, liability, expense, additions to tax and
     additional amounts or costs incurred or imposed with respect thereto)
     imposed or otherwise assessed by the United States or by any state, local
     or foreign government (or any subdivision or agency thereof) or other
     taxing authority, including, without limitation: taxes or other charges on
     or with respect to income, franchises, windfall or other profits, gross
     receipts, property, sales, use, capital stock, payroll, employment, social
     security, workers' compensation, unemployment compensation or net worth and
     similar charges; taxes or other charges in the nature of excise,
     withholding, ad valorem, stamp, transfer, value added, taxes on goods and
     services, gains taxes, license, registration and documentation fees,
     customs duties, tariffs and similar charges.

          "Termination Notice" with respect to any Liquidity Facility has the
           ------------------
     meaning assigned to such term in such Liquidity Facility.

          "Threshold Rating" means, with respect to any Liquidity Provider, (i)
           ----------------
     the short-term unsecured debt rating of "P-1" by Moody's and "A-1+" by
     Standard & Poor's and (ii) for any Person which does not have a published
     short-term unsecured debt rating from each Rating Agency, the long-term
     unsecured debt rating of "Aa3" by Moody's and "AA-" by Standard & Poor's.

          "Transaction" means, with respect to any Confirmation, the
           -----------
     "Transaction" under, as defined in, and evidenced by such Confirmation.

          "Treasury Regulations" means regulations, including proposed or
           --------------------
     temporary regulations, promulgated under the Code.  References herein to
     specific provisions of proposed or temporary regulations shall include
     analogous provisions of final Treasury Regulations or other successor
     Treasury Regulations.

          "Triggering Event" means (x) the occurrence of an Indenture Default
           ----------------
     under all of the Indentures resulting in a PTC Event of Default with
     respect to the most senior Class of Certificates then Outstanding, (y) the
     Acceleration of all of the outstanding Equipment Notes or (z) the
     occurrence of a United Bankruptcy Event.

          "Trust" means any of the Class A-1 Trust, the Class A-2 Trust the
           -----
     Class B Trust, the Class C-1 Trust or the Class C-2 Trust.

          "Trust Accounts" has the meaning assigned to such term in Section
           --------------                                           -------
     2.2(a).
     ------

          "Trust Agreement" means any of the Class A-1 Trust Agreement, the
           ---------------
     Class A-2 Trust Agreement, the Class B Trust Agreement, the Class C-1 Trust
     Agreement or the Class C-2 Trust Agreement.

                                       27
<PAGE>

          "Trustee" means any of the Class A-1 Trustee, the Class A-2 Trustee,
           -------
     the Class B Trustee, the Class C-1 Trustee or the Class C-2 Trustee.

          "Trustee Incumbency Certificate" has the meaning assigned to such term
           ------------------------------
     in Section 2.5(b).
        --------------

          "Trustee Representatives" has the meaning assigned to such term in
           -----------------------
     Section 2.5(b).
     --------------

          "Trust Owned Notes" means, collectively, the AFE Notes, the United
           -----------------
     Equipment Notes and the 747 Leased Equipment Notes.

          "Trust Supplement" means an agreement supplemental to the Basic Pass
           ----------------
     Through Agreement pursuant to which (i) a separate Trust is created for the
     benefit of the Holders of the Certificates of a class, (ii) the issuance of
     the Certificates of such class representing fractional undivided interests
     in such Trust is authorized and (iii) the terms of the Certificates of such
     class are established.

          "U.C.C." means the Uniform Commercial Code in effect in the applicable
           ------
     jurisdiction.

          "Underwriting Agreement" means the Underwriting Agreement, dated as of
           ----------------------
     July 31, 2000, between the Underwriters and United, relating to the
     purchase of the Class A-1 Certificates, the Class A-2 Certificates and the
     Class B Certificates by the Underwriters, as the same may be amended,
     supplemented or otherwise modified from time to time in accordance with its
     terms.

          "Underwriters" means the several underwriters listed as such in the
           ------------
     Underwriting Agreement.

          "United" means United Air Lines, Inc., a Delaware corporation, and its
           ------
     successors and assigns.

          "United Bankruptcy Event" means the occurrence and continuation of any
           -----------------------
     of the following:

              (i)   United shall consent to the appointment of or the taking of
          possession by a receiver, trustee or liquidator of itself or of a
          substantial part of its property, or United shall admit in writing its
          inability to pay its debts generally as they come due, or does not pay
          its debts generally as they become due or shall make a general
          assignment for the benefit of creditors, or United shall file a
          voluntary petition in bankruptcy or a voluntary petition or an answer
          seeking reorganization, liquidation

                                       28
<PAGE>

          or other relief in a case under any bankruptcy laws or other
          insolvency laws (as in effect at such time) or an answer admitting the
          material allegations of a petition filed against United in any such
          case, or United shall seek relief by voluntary petition, answer or
          consent, under the provisions of any other bankruptcy or other similar
          law providing for the reorganization or winding-up of corporations (as
          in effect at such time) or United shall seek an agreement,
          composition, extension or adjustment with its creditors under such
          laws, or United's board of directors shall adopt a resolution
          authorizing corporate action in furtherance of any of the foregoing;
          or

              (ii)  an order, judgment or decree shall be entered by any court
          of competent jurisdiction appointing, without the consent of United, a
          receiver, trustee or liquidator of United or of any substantial part
          of its property, or any substantial part of the property of United
          shall be sequestered, or granting any other relief in respect of
          United as a debtor under any bankruptcy laws or other insolvency laws
          (as in effect at such time), and any such order, judgment or decree of
          appointment or sequestration shall remain in force undismissed,
          unstayed and unvacated for a period of 90 days after the date of entry
          thereof; and

              (iii) a petition against United in a case under any bankruptcy
          laws or other insolvency laws (as in effect at such time) is filed and
          not withdrawn or dismissed within 90 days thereafter, or if, under the
          provisions of any law providing for reorganization or winding-up of
          corporations which may apply to United, any court of competent
          jurisdiction assumes jurisdiction, custody or control of United or of
          any substantial part of its property and such jurisdiction, custody or
          control remains in force unrelinquished, unstayed and unterminated for
          a period of 90 days.

          "United Equipment Note Purchase Agreement" means the Note Purchase
           ----------------------------------------
     Agreement, dated as of July 31, 2000, between the Company, the
     Subordination Agent, the Indenture Trustee under the United Equipment
     Indentures, and the Trustee, relating to the United Equipment Notes in
     respect of the Owned Aircraft.

          "United Equipment Notes" means, at any time, the Series A-1 United
           ----------------------
     Equipment Notes, the Series A-2 United Equipment Notes, the Series B United
     Equipment Notes and the Series C-2 United Equipment Notes, collectively,
     and in each case, any United Equipment Notes issued in exchange therefor or
     replacement thereof pursuant to the terms of the Equipment Note Indentures.

          "United Provisions" has the meaning assigned to such term in Section
           -----------------                                           -------
     9.1(a).
     ------

          "Written Notice" means, from (i) the Trustee or any Liquidity
           --------------
     Provider, a written instrument executed by the Designated Representative of
     such Person, and (ii) the Subordination Agent, a written instrument
     executed by a Person designated in the Officer's

                                       29
<PAGE>

     Certificate of the Subordination Agent delivered on the Closing Date. An
     invoice delivered by a Liquidity Provider pursuant to Section 3.1 in
                                                           -----------
     accordance with its normal invoicing procedures shall constitute Written
     Notice under such Section.

                                  ARTICLE II

                       TRUST ACCOUNTS; CONTROLLING PARTY

     2.1  Agreement to Terms of Subordination; Payments from Monies Received
          ------------------------------------------------------------------
Only.
----

          (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination and distribution set forth in this Agreement in respect of each
Class of Certificates and agrees to enforce such provisions and cause all
payments in respect of the AFE Notes, United Equipment Notes, the 747 Leased
Equipment Notes and the Liquidity Facilities to be applied in accordance with
the terms of this Agreement.  In addition, each Trustee hereby agrees to cause
the Trust Owned Notes purchased by the related Trust to be registered in the
name of the Subordination Agent or its nominee, as agent and trustee for such
Trustee, to be held in trust by the Subordination Agent solely for the purpose
of facilitating the enforcement of the subordination and other provisions of
this Agreement.

          (b) Except as otherwise expressly provided in the next sentence of
this Section 2.1, all payments to be made by the Subordination Agent hereunder
     -----------
shall be made only from amounts received by it that constitute Scheduled
Payments, Special Payments, payments under Section 7 of the Leased Aircraft
Participation Agreements, payments under Section 5 of the Owned Aircraft
Participation Agreements, payments under Section 7 of the 747 Leased Aircraft
Participation Agreement, payments under Section 4(j) or 7 of the United
Equipment Note Purchase Agreement, payments under Section 7 of the Leased
Equipment Note Purchase Agreement, payments under Section 7 of the 747 Leased
Equipment Note Purchase Agreement, payments under Section 5(i) or 7 of the AFE
Note Purchase Agreement or payments under any Liquidity Facility, and only to
the extent that the Subordination Agent shall have received sufficient income or
proceeds therefrom to enable it to make such payments in accordance with the
terms hereof.  Each of the Trustees and the Subordination Agent hereby agrees
and, as provided in each Trust Agreement, each Certificateholder, by its
acceptance of a Certificate, and each Liquidity Provider, by entering into the
Liquidity Facility to which it is a party, has agreed to look solely to such
amounts to the extent available for distribution to it as provided in this
Agreement and that none of the Trustees, the Owner Trustees, the AFE Trustee,
the Indenture Trustees, the Owner Participants nor the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, any Liquidity Facility or such Certificate,
except (in the case of the Subordination Agent) as expressly provided herein or
(in the case of the Trustee) as expressly provided in each Trust Agreement or
(in the case of the Owner Trustees and the Indenture Trustees) as expressly
provided in any Operative Agreement.

                                       30
<PAGE>

     2.2  Trust Accounts.  (a)  Upon the execution of this Agreement, the
          --------------
Subordination Agent shall establish and maintain in its name (i) the Collection
Account as an Eligible Deposit Account, bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Trustees, the Certificateholders and the Liquidity Providers and (ii) as a sub-
account in the Collection Account, the Special Payments Account as an Eligible
Deposit Account, bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers.  The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f).  Upon such establishment and
                           --------------
maintenance under Section 3.6(f), the Cash Collateral Accounts shall, together
                  --------------
with the Collection Account, constitute the "Trust Accounts" hereunder.  Each
                                             --------------
such Trust Account shall meet the requirements of an "Eligible Deposit Account."

          (b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the Business Day preceding the Regular Distribution
Date or the date of the related distribution pursuant to Section 2.4, as the
                                                         -----------
case may be, next following the date of such investment; provided, however, that
                                                         --------  -------
upon the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in accordance with
the written instructions of the Controlling Party; and provided, further, that
                                                       --------  -------
following the making of a Non-Extension Drawing under any Liquidity Facility,
the Subordination Agent shall invest and reinvest the amounts in the Cash
Collateral Account with respect to such Liquidity Facility at the direction of
the Liquidity Provider funding such Drawing.  Unless otherwise expressly
provided in this Agreement (including Section 3.6(f)), any Investment Earnings
                                      --------------
shall be deposited in the Collection Account when received by the Subordination
Agent and shall be applied by the Subordination Agent in the same manner as the
principal amount of such investment is to be applied and any losses shall be
charged against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such investments.
The Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this Agreement
other than by reason of its willful misconduct or gross negligence.  Eligible
Investments and any other investment required to be made hereunder shall be held
to their maturities except that any such investment may be sold (without regard
to its maturity) by the Subordination Agent without instructions whenever such
sale is necessary to make a distribution required under this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.

          (c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise
expressly provided herein with respect to Investment Earnings).  The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the Trustees,
the Certificateholders and the Liquidity Providers, as the case may be.  The
Subordination Agent shall maintain "control" of the Trust

                                       31
<PAGE>

Accounts within the meaning of Section 8-106 of the U.C.C. If, at any time, any
of the Trust Accounts ceases to be an Eligible Deposit Account, the
Subordination Agent shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, to which each Rating Agency may consent) establish a
new Collection Account, Special Payments Account or Cash Collateral Account, as
the case may be, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Collection Account, Special Payments Account
or Cash Collateral Account, as the case may be. So long as State Street is an
Eligible Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.

     2.3  Deposits to the Collection Account and Special Payments Account. (a)
          ---------------------------------------------------------------
The Subordination Agent shall, upon receipt thereof, deposit in the Collection
Account all Scheduled Payments received by it.

          (b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the Trust
Owned Notes, deposit in the Special Payments Account the aggregate amount of
such Special Payments.

     2.4  Distributions of Special Payments.  (a)  Notice of Special Payment.
          ---------------------------------        -------------------------
Upon receipt by the Subordination Agent, as registered holder of the Trust Owned
Notes, of any notice of a Special Payment (or, in the absence of any such
notice, upon receipt by the Subordination Agent of a Special Payment), the
Subordination Agent shall promptly give notice thereof to the Trustee and the
Liquidity Providers.  The Subordination Agent shall promptly calculate the
amount of the redemption or purchase of the Trust Owned Notes or the amount of
any Overdue Scheduled Payment, as the case may be, comprising such Special
Payment under the applicable Indenture or Indentures or the Note Purchase
Agreements and shall promptly send to the Trustee a Written Notice of such
amount.  Such Written Notice shall also set the distribution date for such
Special Payment (a "Special Distribution Date"), which shall be the first
                    -------------------------
Business Day which follows the later to occur of (x) the 20th day after the date
of such Written Notice or (y) the date the Subordination Agent has received or
expects to receive such Special Payment.

          (b) Redemptions and Purchases of All Trust Owned Notes.  So long as no
              --------------------------------------------------
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
                                                              --------------
amounts on deposit in the Special Payments Account on account of the redemption,
purchase or refinancing (including a purchase resulting from a sale of the Trust
Owned Notes permitted by Article IV and a redemption permitted by Section 2(a)
                         ----------
or 2(c) of the Note Purchase Agreements) of all of the Trust Owned Notes issued
pursuant to an Indenture on the Special Distribution Date for such Special
Payment in the following order of priority:

          first, such amount as shall be required to pay (A) all accrued and
          -----
     unpaid Liquidity Expenses then in arrears plus (B) the product of (x) the
                                               ----
     aggregate amount of all accrued and unpaid Liquidity Expenses not in
     arrears to such Special Payment Date multiplied by (y) a
                                          ---------- --

                                       32
<PAGE>

     fraction, the numerator of which is the aggregate outstanding principal
     amount of Trust Owned Notes being redeemed (either in whole or in part),
     purchased or refinanced on such Special Distribution Date and the
     denominator of which is the aggregate outstanding principal amount of all
     Trust Owned Notes (the "Section 2.4(b) Fraction"), shall be distributed to
                             -----------------------
     the Liquidity Providers pro rata on the basis of the amount of Liquidity
     Expenses owed to each Liquidity Provider;

          second, such amount as shall be required to pay (A) all accrued and
          ------
     unpaid interest then in arrears on all Liquidity Obligations (including
     interest accrued and unpaid on any Advance (as defined in any Liquidity
     Facility)) plus (B) the product of (x) the aggregate amount of all accrued
                ----
     and unpaid interest on all Liquidity Obligations not in arrears to such
     Special Distribution Date (at the rate provided in the applicable Liquidity
     Facility) multiplied by (y) the Section 2.4(b) Fraction, shall be
               ---------- --
     distributed to the Liquidity Providers pro rata on the basis of the amount
     of Liquidity Obligations owed to each Liquidity Provider;

          third, such amount as shall be required (A) if any Cash Collateral
          -----
     Account relating to a Liquidity Facility had been previously funded as
     provided in Section 3.6(f), to fund such Cash Collateral Account up to its
                 --------------
     Required Amount shall be deposited in such Cash Collateral Account, (B) if
     any Liquidity Facility shall become a Downgraded Facility or a Non-Extended
     Facility at a time when unreimbursed Interest Drawings under such Liquidity
     Facility have reduced the Available Amount thereunder to zero, to fund the
     relevant Cash Collateral Account up to its Required Amount shall be
     deposited in such Cash Collateral Account and (C) if, with respect to any
     particular Liquidity Facility, neither subclause (A) nor subclause (B) of
                                            -------------     -------------
     this clause third are applicable, to pay or reimburse the Liquidity
          ------ -----
     Provider in respect of such Liquidity Facility, in each case in an amount
     equal to the amount of any unreimbursed Interest Drawings under the
     Liquidity Facilities shall be distributed to the Liquidity Providers, pro
     rata on the basis of the amounts of all such deficiencies and/or
     unreimbursed Interest Drawings;

          fourth, if, with respect to any particular Liquidity Facility, either
          ------
     subclause (A) or (B) of clause third above is applicable, then the
     -------------     -     ------ -----
     Liquidity Provider with respect to such Liquidity Facility shall be paid
     the excess of (x) the aggregate outstanding amount of unreimbursed Advances
     (whether or not then due) under such Liquidity Facility over (y) the
     Required Amount for the relevant Class, pro rata on the basis of such
     amounts in respect of each Liquidity Provider;

          fifth, such amount as shall be required to pay in full Expected
          -----
     Distributions to the holders of Class A-1 Certificates on such Special
     Distribution Date shall be distributed to the Class A-1 Trustee and such
     amount as shall be required to pay in full Expected Distributions to the
     holders of Class A-2 Certificates on such Special Distribution Date shall
     be distributed to the Class A-2 Trustee, pro rata on the basis of such
     amounts in respect of each such Class of Certificates;

                                       33
<PAGE>

          sixth, such amount as shall be required to pay in full Expected
          -----
     Distributions to the holders of Class B Certificates on such Special
     Distribution Date shall be distributed to the Class B Trustee;

          seventh, such amount as shall be required to pay in full Expected
          -------
     Distributions to the holders of Class C-1 Certificates on such Special
     Distribution Date shall be distributed to the Class C-1 Trustee and such
     amount as shall be required to pay in full Expected Distributions to the
     holders of Class C-2 Certificates on such Special Distribution Date shall
     be distributed to the Class C-2 Trustee, pro rata on the basis of such
     amounts in respect of each such Class of Certificates; and

          eighth, the balance, if any, of such Special Payment shall be
          ------
     distributed to the Collection Account.

For the purposes of this Section 2.4(b), clause (x) of the definition of
                         --------------  ----------
"Expected Distributions" shall be deemed to read as follows:  "(x) accrued, due
and unpaid interest on such Certificates together with (without duplication)
accrued and unpaid interest on a portion of such Certificates equal to the
outstanding principal amount of the Trust Owned Notes held in such Trust and
being redeemed, purchased or prepaid (immediately prior to such redemption,
purchase or prepayment)".

          (c) Other Special Payments.  Any amounts on deposit in the Special
              ----------------------
Payments Account other than in respect of amounts to be distributed pursuant to

Section 2.4(b) or (e) shall be distributed on the Special Distribution Date
--------------     -
therefor in accordance with Article III.
                            -----------

          (d) Investment of Amounts in Special Payments Account.  Any amounts on
              -------------------------------------------------
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b), (c) or (e) shall be invested in accordance with
            --------------  ---     -
Section 2.2(b).  Investment Earnings on such investments shall be distributed in
--------------
accordance with Section 2.4(b), (c) or (e), as the case may be.
                --------------  ---     -

          (e) Certain Payments.  Except as otherwise provided in Sections
              ----------------                                   --------
2.4(b), 3.2 and 3.3, the Subordination Agent shall distribute promptly upon
        ---     ---
receipt thereof (i) any indemnity payment received by it from United in respect
of any Trustee or any Liquidity Provider (collectively, the "Payees") and (ii)
                                                             ------
any compensation received by it from United under any Operative Agreement in
respect of any Payee, directly to the Payee entitled thereto.

     2.5  Designated Representatives.  (a)  With the delivery of this Agreement,
          --------------------------
the Subordination Agent shall furnish to each Liquidity Provider and each
Trustee, and from time to time thereafter may furnish to each Liquidity Provider
and each Trustee, at the Subordination Agent's discretion, or upon any Liquidity
Provider's or Trustee's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Subordination Agent Incumbency
                                                ------------------------------
Certificate") of a Responsible Officer of the Subordination Agent certifying as
-----------
to the incumbency and specimen signatures of the officers of the Subordination
Agent and the attorney-in-fact and

                                       34
<PAGE>

agents of the Subordination Agent (the "Subordination Agent Representatives")
                                        ------------------------------------
authorized to give Written Notices on behalf of the Subordination Agent
hereunder. Until each Liquidity Provider and Trustee receives a subsequent
Subordination Agent Incumbency Certificate, it shall be entitled to rely on the
last Subordination Agent Incumbency Certificate delivered to it hereunder.

          (b) With the delivery of this Agreement, each Trustee shall furnish to
the Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any 12-
month period), a certificate (a "Trustee Incumbency Certificate") of a
                                 ------------------------------
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "Trustee Representatives") authorized to give Written
                      -----------------------
Notices on behalf of the Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.

          (c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP Incumbency Certificate") of
                                                 -------------------------
any Responsible Officer of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
                                                                 --
Representatives" and, together with the Subordination Agent Representatives and
---------------
the Trustee Representatives, the "Designated Representatives") authorized to
                                  --------------------------
give Written Notices on behalf of such Liquidity Provider hereunder.  Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall be
entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.

     2.6  Controlling Party.  (a)  The Trustees and the Liquidity Providers
          -----------------
hereby agree that, with respect to any Indenture at any given time, the
Indenture Trustee thereunder shall be directed: (i) in taking, or refraining
from taking, any action under such Indenture or the Notes issued thereunder, so
long as no Indenture Default has occurred and is continuing thereunder, by the
holders of at least a majority of the outstanding principal amount of such Notes
provided that, for so long as the Subordination Agent is the registered holder
--------
of the Trust Owned Notes, the Subordination Agent shall act with respect to this
clause (i) in accordance with the direction of the Trustees in the case of each
----------
such Trustee, with respect to the Trust Owned Notes issued under such Indenture
and held as Trust Property of such Trust constituting, in the aggregate,
directions with respect to such principal amount of Trust Owned Notes, it being
acknowledged that under the AFE Indenture, the holders of the majority of the
outstanding principal amount of the AFE Notes shall not be entitled to direct
the Indenture Trustee under the AFE Indenture to take or refrain from taking any
action (including any vote or granting any consent, waiver or approval) with
respect to the applicable Leased Equipment Notes (and any related documents,
including the Lease of any Aircraft securing such Leased Equipment Notes) or any
Confirmation evidencing a Transaction which (in the case of

                                       35
<PAGE>

such Leased Equipment Notes) by the terms of the Leased Aircraft Indenture under
which such Leased Equipment Notes were issued requires the unanimous consent or
approval of the holders of all such Leased Equipment Notes or (in the case of
any Confirmation evidencing a Transaction) by the terms of the AFE Indenture
requires the unanimous consent or approval of the holders of all the AFE Notes,
but that any such direction to the Indenture Trustee under the AFE Indenture
shall be taken only upon the direction of the holders of all of the AFE Notes;
and (ii) after the occurrence and during the continuation of an Indenture
Default thereunder (which, in the case of an Indenture pertaining to a Leased
Aircraft, has not been cured by the Owner Trustee or the Owner Participant
thereunder, if applicable, pursuant to Section 4.3 of such Indenture or in the
case of an Indenture pertaining to the 747 Leased Aircraft, has not been cured
by the Owner Trustee or the Owner Participant thereunder, if applicable,
pursuant to Section 8.03(e) of such Indenture), in taking, or refraining from
taking, any action permitted under such Indenture or with respect to such Notes
or any Confirmation evidencing a Transaction, including exercising remedies
thereunder (including Accelerating the Notes issued thereunder (and to the
extent any event of default or termination right then exists thereunder),
terminating such Confirmation or, in the case of Equipment Notes or any
Confirmation evidencing a Transaction, foreclosing the Lien on the Aircraft
securing such Notes or such Confirmation), by the Controlling Party.

          (b) The Person who shall be the "Controlling Party" with respect to
                                           -----------------
any Owned Aircraft Indenture, AFE Indenture or the 747 Leased Aircraft Indenture
shall be: (v) initially, the Class A-1 Trustee or the Class A-2 Trustee,
whichever represents the Class with the larger Pool Balance of Certificates
Outstanding at the time such Indenture Default occurs (whether or not any other
Indenture Default shall thereafter occur so long as such initial Indenture
Default shall continue); (w) upon payment of Final Distributions to the holders
of the Certificates of such larger Class, the other of the Class A-1 Trustee or
the Class A-2 Trustee; (x) upon payment of Final Distributions to the holders of
Class A-1 Certificates and Class A-2 Certificates, the Class B Trustee; (y) upon
payment of Final Distributions to the holders of Class B Certificates, the Class
C-1 Trustee or the Class C-2 Trustee, whichever represents the Class with the
larger Pool Balance of Certificates Outstanding at the time such Indenture
Default occurs (whether or not any other Indenture Default shall thereafter
occur so long as such initial Indenture Default shall continue); and (z) upon
payment of Final Distributions to the holders of the Certificates of such larger
Class, the other of the Class C-1 Trustee or the Class C-2 Trustee.  For
purposes of giving effect to the foregoing, the Trustees (other than as the
Controlling Party) irrevocably agree (and the Certificateholders (other than the
Certificateholders represented by the Controlling Party) shall be deemed to
agree by virtue of their purchase of Certificates) that the Subordination Agent,
as record holder of the Trust Owned Notes, shall exercise its voting rights in
respect of the Trust Owned Notes as directed by the Controlling Party and any
vote so exercised shall be binding upon the Trustees and all Certificateholders.

          The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party.  Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; provided, however, that nothing herein contained
                             --------  -------
shall prevent

                                       36
<PAGE>

or prohibit any Non-Controlling Party from exercising such rights as shall be
specifically granted to such Non-Controlling Party hereunder and under the other
Operative Agreements.

          (c) Notwithstanding the foregoing, at any time after 18 months
beginning on the earliest to occur of (i) the date on which the entire Available
Amount under any Liquidity Facility shall have been drawn (for any reason other
than a Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed,
(ii) the date on which the entire amount of any Downgrade Drawing or Non-
Extension Drawing shall have become and remain "Applied Downgrade Advances" or
"Applied Non-Extension Advances", as the case may be, under and as defined in
such Liquidity Facility and (iii) the date on which all Notes shall have been
Accelerated, the Liquidity Provider with the highest outstanding amount of
Liquidity Obligations owed to it shall have the right to elect, by Written
Notice to the Subordination Agent and the Trustee, that such Liquidity Provider
will become the Controlling Party hereunder with respect to any Indenture at any
time from and including the last day of such 18-month period.

          (d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii).
                                        ------------------

          (e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.

                                  ARTICLE III

                   RECEIPT, DISTRIBUTION AND APPLICATION OF
                               AMOUNTS RECEIVED

     3.1  Written Notice of Distribution.  (a)  No later than 3:00 P.M. (New
          ------------------------------
York City time) on the Business Day preceding each Distribution Date, each of
the following Persons shall deliver to the Subordination Agent a Written Notice
setting forth the following information as at the close of business on such
Business Day:

          (i)  With respect to the Class A-1 Certificates and the Class A-2
     Certificates, if any are Outstanding, the Class A-1 Trustee and the Class
     A-2 Trustee, respectively, shall separately set forth the amounts to be
     paid in accordance with clause fifth of Section 2.4(b) or 3.2, as the case
                             ------ -----    --------------    ---
     may be (without giving effect to the pro rata sharing therein);

          (ii) With respect to the Class B Certificates, if any are Outstanding,
     the Class B Trustee shall separately set forth the amounts to be paid in
     accordance with clause sixth of Section 2.4(b) or 3.2, as the case may be;
                     ------ -----    --------------    ---

                                       37
<PAGE>

          (1)   With respect to the Class C-1 Certificates and the Class C-2
     Certificates, if any are Outstanding, the Class C-1 Trustee and the Class
     C-2 Trustee, respectively, shall separately set forth the amounts to be
     paid in accordance with clause seventh of Section 2.4(b) or 3.2 (without
                             ------ -------    --------------    ---
     giving effect to the pro rata sharing therein);

          (iv)  With respect to each Liquidity Facility, the Liquidity Provider
     thereunder shall separately set forth the amounts to be paid in accordance
     with clauses first, second, third and fourth of Section 2.4(b) or 3.2, as
          ------- -----  ------  -----     ------    --------------    ---
     the case may be; and

          (v)   Each Trustee shall set forth the amounts to be paid in
     accordance with clause eighth of Section 3.2.
                     ------ ------    -----------

The notices required under this Section 3.1(a) may be in the form of a schedule
                                --------------
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment, purchase or redemption of the
Certificates, such schedule or similar document is to remain in effect until any
substitute notice or amendment shall be given to the Subordination Agent by the
party providing such notice.

          (b)   Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent setting
forth for such Person the following information:

          (i)   With respect to the Class A-1 Certificates and the Class A-2
     Certificates, if any are Outstanding, the Class A-1 Trustee and the Class
     A-2 Trustee, respectively, shall separately set forth the amounts to be
     paid in accordance with clauses first (to reimburse payments made by the
                             ------- -----
     Class A-1 Certificateholders and the Class A-2 Certificateholders,
     respectively, pursuant to subclause (iii) of clause first of Section 3.3)
                               ---------------    ------ -----    -----------
     and seventh of Section 3.3 (without giving effect to the pro rata sharing
         -------    -----------
     therein);

          (ii)  With respect to the Class B Certificates, if any are
     Outstanding, the Class B Trustee shall separately set forth the amounts to
     be paid in accordance with clauses first (to reimburse payments made by the
                                ------- -----
     Class B Certificateholders pursuant to subclause (iii) of clause first of
                                            ---------------    ------ -----
     Section 3.3) and eighth of Section 3.3;
     ------- ---      ------    -----------

          (iii) With respect to the Class C-1 Certificates and the Class C-2
     Certificates, if any are Outstanding, the Class C-1 Trustee and the Class
     C-2 Trustee, respectively, shall separately set forth the amounts to be
     paid in accordance with clauses first (to reimburse payments made by the
                             ------- -----
     Class C-1 Certificateholders and the Class C-2 Certificateholders,
     respectively, pursuant to subclause (iii) of clause first of Section 3.3)
                               ---------------    ------ -----    -----------
     and ninth of Section 3.3 (without giving effect to the pro rata sharing
         -----    -----------
     therein);

                                       38
<PAGE>

          (iv) With respect to each Liquidity Facility, the Liquidity Provider
     thereunder shall separately set forth the amounts to be paid to it in
     accordance with subclause (iii) of clause first of Section 3.3 and clauses
                     ---------------    ------ -----    -----------     -------
     second, third, fourth and fifth of Section 3.3; and
     ------  -----  ------     -----    -----------

          (v)  Each Trustee shall set forth the amounts to be paid in accordance
     with clause sixth of Section 3.3.
          ------ -----    -----------

          (c)  At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of the Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3,
                                                       -----------  ---    ---
as applicable, and, in the case of a Liquidity Provider, its commitment under
the related Liquidity Facility shall have terminated or expired, such Person
shall, by a Written Notice, so inform the Subordination Agent and each other
party to this Agreement.

          (d)  As provided in Section 6.5, the Subordination Agent shall be
                              -----------
fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to Sections
                                                                     ---------
3.1(a) through (c) above and shall have no independent obligation to verify,
------         ---
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.

          (e)  Any Written Notice delivered by a Trustee or a Liquidity
Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c), if made
                                     --------------  ------    ------
prior to 10:00 A.M. (New York City time) on any Business Day shall be effective
on the date delivered (or if delivered later on a Business Day or if delivered
on a day which is not a Business Day shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; provided, however,
                                                           --------  -------
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.

          (f)  If the Subordination Agent shall not receive from any Person any
information set forth in Section 3.1(a) or (b) above which is required to enable
                         --------------    ---
the Subordination Agent to make a distribution to such Person pursuant to
Sections 2.4(b), 3.2 or 3.3, the Subordination Agent shall request such
---------------  ---    ---
information and, failing to receive any such information, the Subordination
Agent shall not make such distribution(s) to such Person.  In such event, the
Subordination Agent shall make distributions pursuant to clauses first through
                                                         ------- -----
eighth of Section 2.4(b), clauses first through ninth of Section 3.2 and clauses
------    --------------  ------- -----         -----    -----------     -------
first through ninth of Section 3.3 to the extent it shall have sufficient
-----         -----    -----------
information to enable it to make such distributions, and shall continue to hold
any funds remaining, after making such distributions, until the Subordination
Agent shall receive all necessary information to enable it to distribute any
funds so withheld.

          (g)  On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, but in any event automatically
at the end of each calendar quarter, the

                                       39
<PAGE>

Subordination Agent shall send to such party a written statement reflecting all
amounts on deposit with the Subordination Agent pursuant to Section 3.1(f).
                                                            --------------

     3.2  Distribution of Amounts on Deposit in the Collection Account.  Except
          ------------------------------------------------------------
as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and 3.6(b), amounts on
                         ------------  ------  ---  ---     ------
deposit in the Collection Account (or, in the case of any amount described in
Section 2.4(c), on deposit in the Special Payments Account) shall be promptly
--------------
distributed on each Regular Distribution Date (or in the case of any amount
described in Section 2.4(c), on the Special Distribution Date thereof) in the
             --------------
following order of priority and in accordance with the information provided to
the Subordination Agent pursuant to Section 3.1(a):
                                    --------------

          first, such amount as shall be required to pay all accrued and unpaid
          -----
     Liquidity Expenses owed to each Liquidity Provider shall be distributed to
     the Liquidity Providers pro rata on the basis of the amount of Liquidity
     Expenses owed to each Liquidity Provider;

          second, such amount as shall be required to pay in full the aggregate
          ------
     amount of interest accrued on all Liquidity Obligations (at the rate
     provided in the applicable Liquidity Facility) shall be distributed to the
     Liquidity Providers pro rata on the basis of the amount of Liquidity
     Obligations owed to each Liquidity Provider;

          third, such amount as shall be required (A) if any Cash Collateral
          -----
     Account relating to a Liquidity Facility had been previously funded as
     provided in Section 3.6(f), to fund such Cash Collateral Account up to its
                 --------------
     Required Amount shall be deposited in such Cash Collateral Account, (B) if
     any Liquidity Facility shall become a Downgraded Facility or a Non-Extended
     Facility at a time when unreimbursed Interest Drawings under such Liquidity
     Facility have reduced the Available Amount thereunder to zero, to fund the
     relevant Cash Collateral Account up to its Required Amount shall be
     deposited in such Cash Collateral Account and (C) if, with respect to any
     particular Liquidity Facility, neither subclause (A) nor subclause (B) of
                                            -------------     -------------
     this clause third are applicable, to pay or reimburse the Liquidity
          ------ -----
     Provider in respect of such Liquidity Facility, in each case in an amount
     equal to the amount of all Liquidity Obligations then due under such
     Liquidity Facility (other than amounts payable pursuant to clause first or
                                                                ------ -----
     second of this Section 3.2) shall be distributed to such Liquidity
     ------         -----------
     Provider, pro rata on the basis of the amounts of all such unreimbursed
     Liquidity Obligations and/or deficiencies in respect of each Liquidity
     Provider;

          fourth, if, with respect to any particular Liquidity Facility, either
          ------
     subclause (A) or (B) of clause third above is applicable, then the
     ---------  -      -     ------ -----
     Liquidity Provider with respect to such Liquidity Facility shall be paid
     the excess of (x) the aggregate outstanding amount of unreimbursed Advances
     (whether or not then due) under such Liquidity Facility over (y) the
     Required Amount for the relevant Class, pro rata on the basis of such
     amounts in respect of each Liquidity Provider;

                                       40
<PAGE>

          fifth, such amount as shall be required to pay in full Expected
          -----
     Distributions to the holders of the Class A-1 Certificates on such
     Distribution Date shall be distributed to the Class A-1 Trustee and such
     amount as shall be required to pay in full Expected Distributions to the
     holders of the Class A-2 Certificates on such Distribution Date shall be
     distributed to the Class A-2 Trustee, pro rata on the basis of such amounts
     in respect of each such Class of Certificates;

          sixth, such amount as shall be required to pay in full Expected
          -----
     Distributions to the holders of the Class B Certificates on such
     Distribution Date shall be distributed to the Class B Trustee;

          seventh, such amount as shall be required to pay in full Expected
          -------
     Distributions to the holders of the Class C-1 Certificates on such
     Distribution Date shall be distributed to the Class C-1 Trustee and such
     amount as shall be required to pay in full Expected Distributions to the
     holders of the Class C-2 Certificates on such Distribution Date shall be
     distributed to the Class C-2 Trustee, pro rata on the basis of such amounts
     in respect of each such Class of Certificates;

          eighth, such amount as shall be required to pay in full the aggregate
          ------
     unpaid amount of fees and expenses payable as of such Distribution Date to
     the Subordination Agent and the Trustees pursuant to the terms of this
     Agreement and the Trust Agreements, as the case may be, shall be
     distributed to the Subordination Agent and the Trustees; and

          ninth, the balance, if any, of any such payment remaining thereafter
          -----
     shall be distributed to the Collection Account.

     3.3  Distribution of Amounts on Deposit Following a Triggering Event.
          ---------------------------------------------------------------
Except as otherwise provided in Sections 3.1(f) and 3.6(b), upon the occurrence
                                ---------------     ------
of a Triggering Event and at all times thereafter, all funds in the Collection
Account (including the Special Payments Account) shall be promptly distributed
by the Subordination Agent in the following order of priority:

          first, such amount as shall be required to reimburse (i) the
          -----
     Subordination Agent for any out-of-pocket costs and expenses actually
     incurred by it (to the extent not previously reimbursed) in the protection
     of, or the realization of the value of, the Notes or any Indenture Estate,
     shall be applied by the Subordination Agent in reimbursement of such costs
     and expenses, (ii) each Trustee for any amounts of the nature described in
     clause (i) above actually incurred by it under the applicable Trust
     ----------
     Agreement (to the extent not previously reimbursed), shall be distributed
     to the Trustee and (iii) any Liquidity Provider or Certificateholder for
     payments, if any, made by it to the Subordination Agent or any Trustee in
     respect of amounts described in clause (i) above, shall be distributed to
                                     ----------
     such Liquidity Provider or to the Trustee for the account of such
     Certificateholder, in each such case, pro rata on the basis of all amounts
     described in clauses (i) through (iii) above;
                  -----------         -----

                                       41
<PAGE>

          second, such amount remaining as shall be required to pay all accrued
          ------
     and unpaid Liquidity Expenses shall be distributed to each Liquidity
     Provider pro rata on the basis of the amount of Liquidity Expenses owed to
     each Liquidity Provider;

          third, such amount remaining as shall be required to pay accrued and
          -----
     unpaid interest on the Liquidity Obligations as provided in the Liquidity
     Facilities shall be distributed to each Liquidity Provider pro rata on the
     basis of the amount of such accrued and unpaid interest owed to each
     Liquidity Provider;

          fourth, such amount as shall be required (A) if any Cash Collateral
          ------
     Account relating to a Liquidity Facility had been previously funded as
     provided in Section 3.6(f) unless (i) a Performing Note Deficiency exists
                 --------------
     and a Liquidity Event of Default shall have occurred and be continuing with
     respect to the relevant Liquidity Facility or (ii) a Final Drawing shall
     have occurred with respect to the relevant Liquidity Facility, to fund such
     Cash Collateral Account up to its Required Amount (less the amount of any
     repayments of Interest Drawings under such Liquidity Facility while
     subclause (A)(i) above is applicable) shall be deposited in such Cash
     Collateral Account, (B) if any Liquidity Facility shall become a Downgraded
     Facility or a Non-Extended Facility at a time when unreimbursed Interest
     Drawings under such Liquidity Facility have reduced the Available Amount
     thereunder to zero unless (i) a Performing Note Deficiency exists and a
     Liquidity Event of Default shall have occurred and be continuing with
     respect to the relevant Liquidity Facility or (ii) a Final Drawing shall
     have occurred with respect to the relevant Liquidity Facility, to fund the
     relevant Cash Collateral Account up to its Required Amount (less the amount
     of any repayments of Interest Drawings under such Liquidity Facility while
     subclause (B)(i) above is applicable) shall be deposited in such Cash
     Collateral Account and (C) if, with respect to any particular Liquidity
     Facility, neither subclause (A) nor subclause (B) of this clause fourth is
                       -------------     -------------         ------ ------
     applicable, to pay or reimburse the Liquidity Provider in respect of such
     Liquidity Facility, in each case in an amount equal to the amount of all
     Liquidity Obligations, whether or not then due under such Liquidity
     Facility (other than amounts payable pursuant to clause first, second or
                                                      ------ -----  ------
     third of this Section 3.3), shall be distributed to such Liquidity
     -----         -----------
     Provider, pro rata on the basis of the amounts of such deficiencies and/or
     unreimbursed Liquidity Obligations in respect of each Liquidity Provider;

          fifth, if, with respect to any particular Liquidity Facility, either
          -----
     subclause (A) or (B) of clause fourth above is applicable, then the
     -------------     -     ------ ------
     Liquidity Provider with respect to such Liquidity Facility shall be paid
     the excess of (x) the aggregate outstanding amount of unreimbursed Advances
     (whether or not then due) under such Liquidity Facility over (y) the
     Required Amount for the relevant Class (less the amount of any repayments
     of Interest Drawings under such Liquidity Facility while subclause (A)(i)
     or (B)(i), as the case may be, of clause "fourth" above is applicable), pro
     rata on the basis of such amounts in respect of each Liquidity Provider;

                                       42
<PAGE>

          sixth, such amount as shall be required to reimburse or pay (i) the
          -----
     Subordination Agent for any Tax (other than Taxes imposed on compensation
     paid hereunder), expense, fee, charge or other loss incurred by or any
     other amount payable to the Subordination Agent in connection with the
     transactions contemplated hereby (to the extent not previously reimbursed),
     shall be applied by the Subordination Agent in reimbursement of such
     amount, (ii) each Trustee for any Tax (other than Taxes imposed on
     compensation paid under any Trust Agreement), expense, fee, charge, loss or
     any other amount payable to the Trustee under the Trust Agreements (to the
     extent not previously reimbursed), shall be distributed to the Trustee and
     (iii) each Certificateholder for payments, if any, made by it pursuant to
     Section 5.2 in respect of amounts described in clause (i) above, shall be
     -----------                                    ----------
     distributed to the Trustee for the account of such Certificateholder, in
     each such case, pari passu on the basis of all amounts described in clauses
                                                                         -------
     (i) through (iii) above;
     ---         -----

          seventh, if any Class A-1 Certificates or Class A-2 Certificates are
          -------
     Outstanding on such Distribution Date, such amount remaining as shall be
     required to pay in full Adjusted Expected Distributions on the Class A-1
     Certificates shall be distributed to the Class A-1 Trustee and such amount
     remaining as shall be required to pay in full Adjusted Expected
     Distributions on the Class A-2 Certificates shall be distributed to the
     Class A-2 Trustee, pro rata on the basis of such amounts in respect of each
     such Class of Certificates;

          eighth, if any Class B Certificates are Outstanding on such
          ------
     Distribution Date, such amount remaining as shall be required to pay in
     full Adjusted Expected Distributions on the Class B Certificates shall be
     distributed to the Class B Trustee; and

          ninth, if any Class C-1 Certificates or Class C-2 Certificates are
          -----
     Outstanding on such Distribution Date, such amount remaining as shall be
     required to pay in full Adjusted Expected Distributions on the Class C-1
     Certificates shall be distributed to the Class C-1 Trustee and such amount
     remaining as shall be required to pay in full Adjusted Expected
     Distributions on the Class C-2 Certificates shall be distributed to the
     Class C-2 Trustee, pro rata on the basis of such amounts in respect of each
     such Class of Certificates.

     3.4  Other Payments.  (a)  Any payments received by the Subordination Agent
          --------------
for which no provision as to the application thereof is made in this Agreement
shall be distributed by the Subordination Agent (i) in the order of priority
specified in Section 3.3 and (ii) to the extent received or realized at any time
             -----------
after the Final Distributions for each Class of Certificates have been made in
the manner provided in clause first of Section 3.3.
                       ------ -----    -----------

     (b) On any interest payment date under each Liquidity Facility which is not
a Distribution Date, the Subordination Agent shall pay to the Liquidity Provider
under such Liquidity Facility from, and to the extent of, amounts on deposit in
the Collection Account, an amount equal to the amount of interest then due and
payable to such Liquidity Provider under such Liquidity Facility.  The

                                       43
<PAGE>

amount of Investment Earnings to be paid or applied pursuant to this Section
3.4(b) or Section 3.6(f) shall reduce the Liquidity Obligations in respect of
interest due to any Liquidity Provider only to the extent actually paid or
applied.

          (c) Except as otherwise provided in Section 3.3, if the Subordination
                                              -----------
Agent receives any Scheduled Payment after the Scheduled Payment Date relating
thereto, but prior to such payment becoming an Overdue Scheduled Payment, then
the Subordination Agent shall deposit such Scheduled Payment in the Collection
Account and promptly distribute such Scheduled Payment in accordance with the
priority of distributions set forth in Section 3.2; provided, however, that for
                                       -----------  --------  -------
the purposes of this Section 3.4(c) only, each reference in clause second or
                     -----------                            ------ ------
eighth of Section 3.2 to "Distribution Date" shall be deemed to mean the actual
------    -----------
date of payment of such Scheduled Payment and each reference in clause fifth,
                                                                ------ -----
sixth or seventh of Section 3.2 to "Distribution Date" shall be deemed to refer
-----    -------    -----------
to such Scheduled Payment Date.

     3.5  Payments to the Trustee and the Liquidity Providers.  Any amounts
          ---------------------------------------------------
distributed hereunder to any Liquidity Provider shall be paid to such Liquidity
Provider by wire transfer of funds to the address such Liquidity Provider shall
provide to the Subordination Agent.  The Subordination Agent shall provide a
Written Notice of any such transfer to the applicable Liquidity Provider, as the
case may be, at the time of such transfer.  Any amounts distributed hereunder by
the Subordination Agent to any Trustee which shall not be the same institution
as the Subordination Agent shall be paid to such Trustee by wire transfer funds
at the address such Trustee shall provide to the Subordination Agent.

     3.6  Liquidity Facilities.  (a)  Interest Drawings.  If on any Distribution
          --------------------        -----------------
Date, after giving effect to the subordination provisions of this Agreement, the
Subordination Agent shall not have sufficient funds for the payment of any
amounts due and owing in respect of accrued interest on the Class A-1
Certificates, the Class A-2 Certificates or the Class B Certificates (at the
Stated Interest Rate for such Class of Certificates), then, prior to 12:00 noon
(New York City time) on such Distribution Date, the Subordination Agent shall
request a drawing (each such drawing or payment, an "Interest Drawing") under
                                                     ----------------
the Liquidity Facility with respect to such Class of Certificates in an amount
equal to the lesser of (i) an amount sufficient to pay the amount of such
accrued interest and (ii) the Available Amount at such time under such Liquidity
Facility, and, upon receipt by the Subordination Agent thereof, shall pay such
amounts to the Trustee with respect to such Class of Certificates in payment of
such accrued interest.

          (b) Application of Interest Drawings.  Notwithstanding anything to the
              --------------------------------
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-1
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A-1 Cash Collateral Account, and payable in each case to the Class A-1
Certificateholders, shall be promptly distributed to the Class A-1 Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class A-2 Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class A-2 Cash Collateral

                                       44
<PAGE>

Account, and payable in each case to the Class A-2 Certificateholders, shall be
promptly distributed to the Class A-2 Trustee, and (iii) all payments received
by the Subordination Agent in respect of an Interest Drawing under the Class B
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class B Cash Collateral Account, and payable in each case to the Class B
Certificateholders, shall be promptly distributed to the Class B Trustee.

          (c) Downgrade of Liquidity Providers; Downgrade Drawings.  If at any
              ----------------------------------------------------
time any relevant debt rating of any Liquidity Provider is lower than the
applicable Threshold Rating, such Liquidity Provider shall provide notice of
such downgrading in writing to United, the Subordination Agent, the Class A-1
Trustee, the Class A-2 Trustee and the Class B Trustee.  Within 30 days after
such Liquidity Provider receives notice of such downgrading (but no later than
the expiration date of the Liquidity Facility issued by the downgraded Liquidity
Provider (the "Downgraded Facility")), such Liquidity Provider or United may
               -------------------
arrange for one or more Replacement Liquidity Providers to issue and deliver a
Replacement Liquidity Facility to the Subordination Agent.  If a Downgraded
Facility has not been replaced in accordance with the terms of this paragraph,
the Subordination Agent shall, on such 30th day, or the 10/th/ day, if the
Liquidity Provider is rated lower than A-3 by Standard & Poor's (or if such day
is not a Business Day, on the next succeeding Business Day) (or, if earlier, the
expiration date of such Downgraded Facility) request a drawing in accordance
with and to the extent permitted by such Downgraded Facility (such drawing, a
"Downgrade Drawing") of the Available Amount thereunder.  Amounts drawn pursuant
------------------
to a Downgrade Drawing shall be maintained and invested as provided in Section
                                                                       -------
3.6(f).  The applicable Liquidity Provider may also arrange for one or more
------
Replacement Liquidity Providers to issue and deliver a Replacement Liquidity
Facility at any time after such Downgrade Drawing so long as such Downgrade
Drawing has not been reimbursed in full to such Liquidity Provider.

          (d) Non-Extension Drawings.  If any Liquidity Facility with respect to
              ----------------------
any Class of Certificates is scheduled to expire on a date (the "Stated
                                                                 ------
Expiration Date") prior to the date that is fifteen (15) days after the Final
---------------
Maturity Date for such Class of Certificates, then, no earlier than the 60th day
and no later than the 40th day prior to such Stated Expiration Date (unless such
Stated Expiration Date is on or after the date that is 15 days after the Final
Maturity Date for such Class of Certificates), the Subordination Agent shall
request that the Liquidity Provider for such Liquidity Facility extend the
Stated Expiration Date to the earlier of (i) the date that is 15 days after the
Final Maturity Date for such Class of Certificates and (ii) the date that is the
day immediately preceding the 364th day occurring after the last day of the
Consent Period (as hereinafter defined) (unless the obligations of such
Liquidity Provider are earlier terminated in accordance with such Liquidity
Facility).  Whether or not the Liquidity Provider has received such a request
from the Subordination Agent, the Liquidity Provider shall advise the
Subordination Agent, no earlier than the 40/th/ day (or, if earlier, the date of
the Liquidity Provider's receipt of such request, if any, from the Subordination
Agent), and no later than the 25th day prior to the Stated Expiration Date (such
period, with respect to such Liquidity Facility, the "Consent Period"), whether,
                                                      --------------
in its sole discretion, it agrees to so extend the Stated Expiration Date.  If
(A) on or before the date on which such Consent Period ends, such Liquidity
Facility shall not have been replaced in accordance with Section 3.6(e), and (B)
the

                                       45
<PAGE>

Liquidity Provider fails irrevocably and unconditionally to advise the
Subordination Agent on or before the date on which such Consent Period ends that
the Stated Expiration Date shall be so extended for such Liquidity Facility, the
Subordination Agent shall on the date on which such Consent Period ends (or as
soon as possible thereafter), in accordance with the terms of the expiring
Liquidity Facility (a "Non-Extended Facility"), request a drawing under such
                       ---------------------
expiring Liquidity Facility (such drawing, a "Non-Extension Drawing") of all
                                              ---------------------
available and undrawn amounts thereunder.  Amounts drawn pursuant to a Non-
Extension Drawing shall be maintained and invested in accordance with Section
                                                                      -------
3.6(f).
------

          (e) Issuance of Replacement Liquidity Facility.  (i) At any time,
              ------------------------------------------
United may, at its option, arrange for Replacement Liquidity Facilities to
replace the Liquidity Facilities for the Class A-1 Certificates, the Class A-2
Certificates and the Class B Certificates; provided, however, that the initial
                                           --------  -------
Liquidity Provider shall not be replaced by United as a Liquidity Provider with
respect to any Class of Certificates unless (A) there shall have become due to
such initial Liquidity Provider, or such initial Liquidity Provider shall have
demanded, amounts pursuant to Section 3.01, 3.02 or 3.03 of any applicable
                              ------------  ----    ----
Liquidity Facility and the replacement of such initial Liquidity Provider would
reduce or eliminate the obligation to pay such amounts or United determines in
good faith that there is a substantial likelihood that such initial Liquidity
Provider will have the right to claim any such amounts (unless such initial
Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered by
United to such initial Liquidity Provider setting forth the basis for such
determination and accompanied by an opinion of outside counsel selected by
United and reasonably acceptable to such initial Liquidity Provider verifying
the legal conclusions, if any, of such certificate relating to such basis,
provided that, in the case of any likely claim for such amounts based upon any
--------
proposed, or proposed change in, law, rule, regulation, interpretation,
directive, requirement, request or administrative practice, such opinion may
assume the adoption or promulgation of such proposed matter, (B) it shall become
unlawful or impossible for such initial Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances as described in Section 3.10 of
any Liquidity Facility, (C) any Liquidity Facility of such initial Liquidity
Provider shall become a Downgraded Facility or a Non-Extended Facility or a
Downgrade Drawing or a Non-Extension Drawing shall have occurred under any
Liquidity Facility of such initial Liquidity Provider or (D) such initial
Liquidity Provider shall have breached any of its payment (including, without
limitation, funding) obligations under any Liquidity Facility in respect of
which it is the Liquidity Provider.  If such Replacement Liquidity Facility is
provided at any time after a Downgrade Drawing or Non-Extension Drawing has been
made, all funds on deposit in the relevant Cash Collateral Account will be
returned to the Liquidity Provider being replaced.  If (x) any Liquidity
Provider shall determine not to extend any of its Liquidity Facilities in
accordance with Section 3.6(d) or (y) any Liquidity Provider has made a Non-
                --------------
Extension Drawing under any Liquidity Facility, then such Liquidity Provider
may, at its option, arrange for a Replacement Liquidity Facility to replace such
Liquidity Facility (in the case of clause (x) during the period no earlier than
40 days and no later than 25 days prior to the then effective Stated Expiration
Date of such Liquidity Facility and in the case of clause (y) at any time after
the making of such Non-Extension Drawing).

                                       46
<PAGE>

          (ii)  No such Replacement Liquidity Facility executed in connection
therewith shall become effective and no such Replacement Liquidity Facility
shall be deemed a "Liquidity Facility" under the Operative Agreements, unless
and until (i) each of the conditions referred to in Section 3.6(e)(iv) shall
                                                    ------------------
have been satisfied and (ii) if such Replacement Liquidity Facility shall
materially adversely affect the rights, remedies, interests or obligations of
the Class A-1 Certificateholders, the Class A-2 Certificateholders, or the Class
B Certificateholders under any of the Operative Agreements, the applicable
Trustee shall have consented, in writing, to the execution and issuance of such
Replacement Liquidity Facility.

          (iii) In connection with the issuance of each Replacement
Liquidity Facility, the Subordination Agent shall (x) prior to the issuance of
such Replacement Liquidity Facility, obtain written confirmation from each
Rating Agency that such Replacement Liquidity Facility will not cause a
reduction of any rating then in effect for the Class A-1 Certificates, the Class
A-2 Certificates or the Class B Certificates by such Rating Agency (without
regard to any downgrading of any rating of any Liquidity Provider being replaced
pursuant to Section 3.6(c)), (y) pay all Liquidity Obligations then owing to the
            --------------
replaced Liquidity Provider (which payment may be made as provided in clause
                                                                      ------
(viii) of Section 3.6(f) pursuant to a drawing under the Replacement Liquidity
------    -------------
Facility, or otherwise) and (z) cause the issuer or issuers of the Replacement
Liquidity Facility to deliver the Replacement Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such Replacement
Liquidity Facility is an enforceable obligation of such Replacement Liquidity
Providers.

          (iv)  Upon satisfaction of the conditions set forth in Sections
                                                                 --------
3.6(e)(ii) and 3.6(e)(iii) (w) the replaced Liquidity Facility shall terminate,
----------     -----------
(x) the Subordination Agent shall, if and to the extent so requested by United
or the Liquidity Provider being replaced, execute and deliver any certificate or
other instrument required in order to terminate the replaced Liquidity Facility,
shall surrender the replaced Liquidity Facility to the Liquidity Provider being
replaced and shall execute and deliver the Replacement Liquidity Facility and
any associated Fee Letter, (y) each of the parties hereto shall enter into any
amendments to this Agreement necessary to give effect to (a) the replacement of
the applicable Liquidity Provider with the applicable Replacement Liquidity
Provider and (b) the replacement of the applicable Liquidity Facility with the
applicable Replacement Liquidity Facility, and (z) the applicable Replacement
Liquidity Provider shall be deemed to be a Liquidity Provider with the rights
and obligations of a Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Liquidity Facility shall be deemed to be a
Liquidity Facility hereunder and under the other Operative Agreements.

          (f)   Cash Collateral Accounts; Withdrawals; Investments.  If the
                --------------------------------------------------
Subordination Agent shall draw all available amounts under the Class A-1
Liquidity Facility, the Class A-2 Liquidity Facility or the Class B Liquidity
Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i), or in the event that
                     --------------  ------    ------
amounts are to be deposited in any Cash Collateral Account related to the
Liquidity Facilities pursuant to subclause (B) of clause third of Section 2.4(b)
                                 -------------    ------------    --------------
or 3.2 or subclause (B) of clause
   ---    -------------    ------

                                       47
<PAGE>

fourth of Section 3.3, amounts so drawn or to be deposited, as the case may be,
------    -----------
shall be deposited by the Subordination Agent in the Class A-1 Cash Collateral
Account, Class A-2 Cash Collateral Account or the Class B Cash Collateral
Account, respectively. Amounts so deposited in the Cash Collateral Accounts
shall be invested in Eligible Investments in accordance with Section 2.2(b).
                                                             --------------
Investment Earnings on amounts on deposit in the Cash Collateral Account with
respect to any Liquidity Facility shall be paid after a Non-Extension Drawing by
the Subordination Agent to the relevant Liquidity Provider on each Distribution
Date and, to the extent not so paid, together with all other Investment Earnings
shall be deposited in the Collection Account prior to giving effect to the
distributions below on each Distribution Date commencing on the first
Distribution Date after any such Drawing. The Subordination Agent shall deliver
a written statement to United and each Liquidity Provider one day prior to each
Distribution Date setting forth the aggregate amount of Investment Earnings held
in the Cash Collateral Accounts as of such date. In addition, from and after the
date funds are so deposited, the Subordination Agent shall make withdrawals from
such account as follows:

          (i)   on each Distribution Date, the Subordination Agent shall, to the
     extent it shall not have received funds to pay accrued and unpaid interest
     due and payable on the Class A-1 Certificates from any other source,
     withdraw from the Class A-1 Cash Collateral Account, and pay to the Class
     A-1 Trustee for the benefit of the Class A-1 Certificateholders, an amount
     equal to the lesser of (x) an amount necessary to pay accrued and unpaid
     interest on such Class A-1 Certificates and (y) the amount on deposit in
     the Class A-1 Cash Collateral Account;

          (ii)  on each Distribution Date, the Subordination Agent shall, to the
     extent it shall not have received funds to pay accrued and unpaid interest
     due and payable on the Class A-2 Certificates from any other source,
     withdraw from the Class A-2 Cash Collateral Account, and pay to the Class
     A-2 Trustee for the benefit of the Class A-2 Certificateholders, an amount
     equal to the lesser of (x) an amount necessary to pay accrued and unpaid
     interest on such Class A-2 Certificates and (y) the amount on deposit in
     the Class A-2 Cash Collateral Account;

          (iii) on each Distribution Date, the Subordination Agent shall, to
     the extent it shall not have received funds to pay accrued and unpaid
     interest due and payable on the Class B Certificates from any other source,
     withdraw from the Class B Cash Collateral Account, and pay to the Class B
     Trustee for the benefit of the Class B Certificateholders, an amount equal
     to the lesser of (x) an amount necessary to pay accrued and unpaid interest
     on such Class B Certificates and (y) the amount on deposit in the Class B
     Cash Collateral Account;

          (iv)  on each date on which the Pool Balance of the Class A-1 Trust
     shall have been reduced by payments made to the Class A-1
     Certificateholders pursuant to Section 2.4, 3.2 or 3.3, the Subordination
                                    -----------  ---    ---
     Agent shall withdraw from the Class A-1 Cash Collateral Account such amount
     as is necessary so that (after giving effect to the reduction of the Pool
     Balance

                                       48
<PAGE>

     on such date, any prior withdrawal of amounts on deposit in the Class A-1
     Cash Collateral Account on such date and any transfer of Investment
     Earnings from such Cash Collateral Account to the Collection Account or the
     Special Payments Account on such date) an amount equal to the sum of the
     Required Amount (with respect to the Class A-1 Liquidity Facility) plus any
     Investment Earnings remaining on deposit in such Cash Collateral Account
     will be on deposit in the Class A-1 Cash Collateral Account and shall
     first, pay such amount to the Class A-1 Liquidity Provider until the
     -----
     Liquidity Obligations (with respect to the Class A-1 Certificates) owing to
     such Liquidity Provider shall have been paid in full, and second, deposit
                                                               ------
     any remaining amount into the Collection Account;

          (v)   on each date on which the Pool Balance of the Class A-2 Trust
     shall have been reduced by payments made to the Class A-2
     Certificateholders pursuant to Section 2.4, 3.2 or 3.3, the Subordination
                                    -----------  ---    ---
     Agent shall withdraw from the Class A-2 Cash Collateral Account such amount
     as is necessary so that (after giving effect to the reduction of the Pool
     Balance on such date, any prior withdrawal of amounts on deposit in the
     Class A-2 Cash Collateral Account on such date and any transfer of
     Investment Earnings from such Cash Collateral Account to the Collection
     Account or the Special Payments Account on such date) an amount equal to
     the sum of the Required Amount (with respect to the Class A-2 Liquidity
     Facility) plus any Investment Earnings remaining on deposit in such Cash
     Collateral Account will be on deposit in the Class A-2 Cash Collateral
     Account and shall first, pay such amount to the Class A-2 Liquidity
                       -----
     Provider until the Liquidity Obligations (with respect to the Class A-2
     Certificates) owing to such Liquidity Provider shall have been paid in
     full, and second, deposit any remaining amount into the Collection Account;
               ------

          (vi)  on each date on which the Pool Balance of the Class B Trust
     shall have been reduced by payments made to the Class B Certificateholders
     pursuant to Section 2.4, 3.2 or 3.3, the Subordination Agent shall withdraw
                 -----------  ---    ---
     from the Class B Cash Collateral Account such amount as is necessary so
     that (after giving effect to the reduction of the Pool Balance on such
     date, any prior withdrawal of amounts on deposit in the Class B Cash
     Collateral Account on such date and any transfer of Investment Earnings
     from such Cash Collateral Account to the Collection Account or the Special
     Payments Account on such date) an amount equal to the sum of the Required
     Amount (with respect to the Class B Liquidity Facility) plus any Investment
     Earnings remaining on deposit in such Cash Collateral Account will be on
     deposit in the Class B Cash Collateral Account and shall first, pay such
                                                              -----
     amount to the Class B Liquidity Provider until the Liquidity Obligations
     (with respect to the Class B Certificates) owing to such Liquidity Provider
     shall have been paid in full, and second, deposit any remaining amount into
                                       ------
     the Collection Account;

          (vii) if a Replacement Liquidity Facility for any Class of
     Certificates shall be delivered to the Subordination Agent following the
     date on which funds have been deposited into the Cash Collateral Account
     related to the Liquidity Facility for such Class of Certificates, the
     Subordination Agent shall withdraw all amounts on deposit in such Cash

                                       49
<PAGE>

     Collateral Account and shall pay such amounts to the replaced Liquidity
     Provider until all Liquidity Obligations owed to such Person shall have
     been paid in full pro rata on the basis of the amount of Liquidity
     Obligations owed to each Liquidity Provider, and shall deposit any
     remaining amount in the Collection Account; and

          (viii) following the payment of Final Distributions with respect to
     the Class A-1 Certificates, the Class A-2 Certificates  or the Class B
     Certificates, on the date on which the Subordination Agent shall have been
     notified by any Liquidity Provider for such Class of Certificates that the
     Liquidity Obligations owed to such Liquidity Provider have been paid in
     full, the Subordination Agent shall withdraw all amounts on deposit in the
     Cash Collateral Account related to the Liquidity Facility in respect of
     such Class of Certificates and shall deposit such amount into the
     Collection Account.

          (g)    Reinstatement.  With respect to any Interest Drawing under the
                 -------------
Liquidity Facility for any Trust, upon the reimbursement of each applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount of such
Interest Drawing so reimbursed to the relevant Liquidity Provider, but not to
exceed the Stated Amount for such Liquidity Facility; provided, however, that
                                                      --------  -------
such Liquidity Facility shall not be so reinstated in part or in full at any
time if (x) both a Performing Note Deficiency exists and a Liquidity Event of
Default shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (y) a Final Drawing shall have occurred with respect to
such Liquidity Facility. In the event that, with respect to any particular
Liquidity Facility, (i) funds are withdrawn from the related Cash Collateral
Account pursuant to clauses (i), (ii) or (iii) of Section 3.6(f) or (ii) such
                    ------- ---  ----    -----    --------------
Liquidity Facility shall become a Downgraded Facility or Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, then funds received by the
Subordination Agent at any time other than (x) any time when a Liquidity Event
of Default shall have occurred and be continuing with respect to such Liquidity
Facility and a Performing Note Deficiency exists or (y) any time after a Final
Drawing shall have occurred with respect to such Liquidity Facility, shall be
deposited in such applicable Cash Collateral Account as provided in clause third
                                                                    ------ -----
of Section 2.4(b), clause third of Section 3.2 or clause fourth of Section 3.3,
   --------------  ------ -----    -----------    ------ ------    -----------
as applicable, and applied in accordance with Section 3.6(f).
                                              --------------

          (h)    Reimbursement.  The amount of each drawing under the Liquidity
                 -------------
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.

          (i)    Final Drawing upon Termination Notice.  Upon receipt from a
                 -------------------------------------
Liquidity Provider of a Termination Notice with respect to any Liquidity
Facility, the Subordination Agent shall, not later than the date specified in
such Termination Notice, in accordance with and to the extent permitted by the
terms of such Liquidity Facility, request a drawing under such Liquidity

                                       50
<PAGE>

Facility of all available and undrawn amounts thereunder (a "Final Drawing").
                                                             -------------
Amounts drawn pursuant to a Final Drawing shall be maintained and invested in
accordance with Section 3.6(f).
                --------------

          (j) Reduction of Stated Amount.  Promptly following each date on which
              --------------------------
the Required Amount of the Liquidity Facility for a Class of Certificates is
reduced as a result of a reduction in the Pool Balance with respect to such
Certificates, the Subordination Agent shall, if any such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request such Liquidity Provider for such
Class of Certificates to reduce such Stated Amount to an amount equal to the
Required Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.

          (k) Relation to Subordination Provisions.  Interest Drawings under the
              ------------------------------------
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of the Class A-1 Certificates,
the Class A-2 Certificates or the Class B Certificates, shall be distributed to
the Trustee for such Class of Certificates, notwithstanding Sections 2.4 , 3.2
                                                            -------------  ---
and 3.3.
    ---

          (l) Assignment of Liquidity Facility.  The Subordination Agent agrees
              --------------------------------
not to consent to the assignment by any Liquidity Provider of any of its rights
or obligations under any Liquidity Facility or any interest therein, unless (i)
United shall have consented to such assignment and (ii) each Rating Agency shall
have provided a Ratings Confirmation in respect of such assignment, and the
foregoing is not intended to and shall not be construed to limit the rights of
the Liquidity Provider set forth in the last sentence of Section 3.6(e)(i).

                                  ARTICLE IV

                             EXERCISE OF REMEDIES

     4.1  Directions from the Controlling Party.  (a)  (i)  Following the
          -------------------------------------
occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Subordination Agent, which in
turn shall direct the Indenture Trustee (including, in the case of the Leased
Equipment Notes or any Confirmation evidencing a Transaction, as a result of the
assignment of such right by AFE Trust to the AFE Indenture Trustee) under such
Indenture in the exercise of remedies available to the holders of the Notes
issued pursuant to such Indenture or available to AFE Trust (and its successors
and assigns including the AFE Indenture Trustee) as counterparty to United under
any Confirmation evidencing a Transaction.  Such remedies shall include the
ability to vote all such Notes in favor of declaring all of the unpaid principal
amount of such Notes and accrued interest thereon to be due and payable under,
and in accordance with, the provisions of such Indenture as well as the ability
to direct the Indenture Trustee under the applicable Owned Aircraft

                                       51
<PAGE>

Indenture to foreclose upon the Lien of such Indenture to satisfy any Swap
Obligations then due and owing under the Confirmation secured by such Owned
Aircraft Indenture subject to the terms and conditions of such Owned Aircraft
Indenture and the AFE Indenture. Subject to the Owner Trustees' and the Owner
Participants' rights set forth in the Indentures with respect to the Leased
Aircraft and to the 747 Leased Aircraft to purchase the Leased Equipment Notes
and the 747 Leased Equipment Notes, respectively, and the provisions of the next
paragraph, if the Notes issued pursuant to any Indenture have been Accelerated
following an Indenture Default with respect thereto (and in the case of the
Leased Equipment Notes, whether or not the AFE Notes have been accelerated), the
Controlling Party may sell, assign, contract to sell or otherwise dispose of and
deliver all (but not less than all) of such Notes to any Person at public or
private sale, at any location at the option of the Controlling Party, all upon
such terms and conditions as it may reasonably deem advisable in accordance with
applicable law.

          (ii) Subject to the Owner Trustees' and the Owner Participants' rights
set forth in the Indentures with respect to Leased Aircraft and to the 747
Leased Aircraft to purchase the Leased Equipment Notes and the 747 Leased
Equipment Notes, respectively, and notwithstanding the foregoing, so long as any
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earliest to occur of (x) the Acceleration of the Equipment
Notes issued pursuant to any Indenture, (y) the termination of any Confirmation
evidencing a Transaction secured by an Owned Aircraft as a result of an "Event
of Default" under and as defined in the applicable Owned Aircraft Indenture and
(z) the occurrence of a United Bankruptcy Event, without the consent of each
Trustee (other than any Trustee of a Trust to the extent that United or any
Affiliate of United holds a majority-in-interest of the Certificates issued by
such Trust and a "Lease Event of Default" under and as defined in any Leased
Aircraft Indenture or the 747 Leased Aircraft Indenture or an "Event of Default"
under and as defined in any Owned Aircraft Indenture has occurred and is
continuing), (A) no Aircraft subject to the Lien of any Owned Aircraft
Indenture, Leased Aircraft Indenture or 747 Leased Aircraft Indenture or United
Equipment Notes or 747 Leased Equipment Notes may be sold if the net proceeds
from such sale would be less than the Minimum Sale Price for such Aircraft or
such United Equipment Note or 747 Leased Equipment Notes, and (B) with respect
to any Leased Aircraft or the 747 Leased Aircraft, the amount and payment dates
of rentals payable by United under the Lease for such Aircraft may not be
adjusted, if, as a result of such adjustment, the discounted present value
(using the weighted average interest rate of the Equipment Notes issued pursuant
to the related Indenture as the discount rate) of all such rentals would be less
than 75% of the discounted present value of the rentals payable by United under
such Lease before giving effect to such adjustment.  In addition, during the
period ending on the date nine months after the Acceleration of the AFE Notes
issued under the AFE Indenture, without the consent of each Certificateholder
(other than United or any Affiliate of United if a "Lease Event of Default"
under and as defined in any Leased Aircraft Indenture or the 747 Leased Aircraft
Indenture or an "Event of Default" under and as defined in any Owned Aircraft
Indenture has occurred and is continuing), no AFE Note may be sold for an amount
which is less than the lesser of (i) the then outstanding principal amount plus
accrued and unpaid interest on such AFE Note and (ii) 75% of the value of the
Leased Equipment Notes, the Confirmations, any Qualified Swap Substitutes (as
defined in the

                                       52
<PAGE>

AFE Indenture) and/or any Swap Substitute Accounts (as defined in the AFE
Indenture), such value to be determined by an independent investment banking
firm of nationally recognized standing selected by the Controlling Party.

          (iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance of an Indenture Default in respect
of an Equipment Note Indenture (and before the occurrence of a Triggering Event)
commission Appraisals with respect to the Aircraft, the Confirmations, any
Qualified Swap Substitutes and/or any Swap Substitute Accounts subject to such
Indenture.

          (iv)  After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain Appraisals
with respect to all of the Aircraft (the "LTV Appraisals") as soon as
                                          --------------
practicable and additional LTV Appraisals on or prior to each anniversary of the
date of such initial LTV Appraisals; provided, however, that if the Controlling
                                     --------  -------
Party reasonably objects to the appraised value of the Aircraft shown in such
LTV Appraisals, the Controlling Party shall have the right to obtain or cause to
be obtained substitute LTV Appraisals (including LTV Appraisals based upon
physical inspection of the Aircraft).

          (b)   Following the occurrence and during the continuance of an
Indenture Default under any Indenture, the Controlling Party shall take such
actions as it may reasonably deem most effectual to complete the sale or other
disposition of the relevant Aircraft or related Trust Owned Notes and to
foreclose upon and sell or otherwise dispose of the Leased Equipment Notes.  In
addition, in lieu of any sale, assignment, contract to sell or other
disposition, the Controlling Party may maintain possession of such Trust Owned
Notes and foreclose upon or maintain possession of the Leased Equipment Notes
and continue to apply monies received in respect of such Notes in accordance
with Article III.  In addition, in lieu of such sale, assignment, contract to
     -----------
sell or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may instruct the Indenture Trustee (including, in the case of
the Leased Equipment Notes, as a result of the assignment of AFE Trust's rights
to the AFE Indenture Trustee to so instruct the related Indenture Trustee) under
such Indenture to foreclose on the Lien on the related Aircraft.  Without
limiting the generality of the foregoing, but subject to the provisions of the
applicable Owned Aircraft Indenture and the AFE Indenture, the Controlling Party
shall take such actions as it may reasonably deem most effectual to realize upon
any collateral security (whether constituting an Aircraft, cash or other
property) then held by the applicable Indenture Trustee to secure the
Transaction evidenced by any Confirmation following the termination of such
Transaction.

     4.2  Remedies Cumulative.  Each and every right, power and remedy given to
          -------------------
the Trustees, the Liquidity Providers, the Controlling Party or the
Subordination Agent 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, subject always to the terms and conditions
hereof, be exercised from time to time and as often and

                                       53
<PAGE>

in such order as may be deemed expedient by any Trustee, the Liquidity
Providers, the Controlling Party or the Subordination Agent, as appropriate, 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 any
Trustee, the Liquidity Providers, the Controlling Party or the Subordination
Agent in the exercise of any right, remedy or power or in the pursuit of any
remedy shall impair any such right, power or remedy or be construed to be a
waiver of any default or to be an acquiescence therein.

     4.3  Discontinuance of Proceedings.  If any party to this Agreement
          -----------------------------
(including the Controlling Party in such capacity) shall have instituted any
Proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, entry or otherwise, and such Proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Person instituting such Proceeding, then and in every such case each such
party shall, subject to any determination in such Proceeding, be restored to its
former position and rights hereunder, and all rights, remedies and powers of
such party shall continue as if no such Proceeding had been instituted.

     4.4  Right of Certificateholders to Receive Payments Not to Be Impaired.
          ------------------------------------------------------------------
Anything in this Agreement to the contrary notwithstanding but subject to each
Trust Agreement, the right of any Certificateholder or any Liquidity Provider,
respectively, to receive payments hereunder (including pursuant to Section 2.4,
                                                                   -----------
3.2 or 3.3) when due, or to institute suit for the enforcement of any such
---    ---
payment on or after the applicable Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder or such Liquidity
Provider, respectively.

     4.5  Undertaking for Costs.  In any suit for the enforcement of any right
          ---------------------
or remedy under this Agreement or in any suit against any Controlling Party or
the Subordination Agent for any action taken or omitted by it as Controlling
Party or Subordination Agent, as the case may be, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant.  The provisions of this Section
                                                                       -------
4.5 do not apply to a suit instituted by the Subordination Agent, a Liquidity
---
Provider or a Trustee or a suit by Certificateholders holding more than 10% of
the original principal amount of any Class of Certificates.

                                   ARTICLE V

                      DUTIES OF THE SUBORDINATION AGENT;
                         AGREEMENTS OF TRUSTEES, ETC.

     5.1  Notice of Indenture Default or Triggering Event.  (a)  If the
          -----------------------------------------------
Subordination Agent shall have actual knowledge of the occurrence of an
Indenture Default or a Triggering Event, as promptly

                                       54
<PAGE>

as practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the Rating
Agencies, the Liquidity Providers and the Trustees notice of such Indenture
Default or Triggering Event, unless such Indenture Default or Triggering Event
shall have been cured or waived. For all purposes of this Agreement, in the
absence of actual knowledge on the part of a Responsible Officer, the
Subordination Agent shall not be deemed to have knowledge of any Indenture
Default or Triggering Event unless notified in writing by one or more Trustees,
one or more Liquidity Providers or one or more Certificateholders.

          (b) Other Notices.  The Subordination Agent will furnish to each
              -------------
Liquidity Provider and each Trustee, promptly upon receipt thereof, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Trust Owned Notes, as a holder of a security interest
in collateral securing the Leased Equipment Notes or otherwise in its capacity
as Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or the Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.

     5.2  Indemnification.  The Subordination Agent shall not be required to
          ---------------
take any action or refrain from taking any action under Section 5.1 (other than
                                                        -----------
the first sentence thereof) or Article IV unless the Subordination Agent shall
                               ----------
have been indemnified (to the extent and in the manner reasonably satisfactory
to the Subordination Agent) against any liability, cost or expense (including
counsel fees and expenses) which may be incurred in connection therewith.  The
Subordination Agent shall not be under any obligation to take any action under
this Agreement and nothing contained in this Agreement shall require the
Subordination Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.  The Subordination Agent shall not
be required to take any action under Section 5.1 (other than the first sentence
                                     -----------
thereof) or Article IV, nor shall any other provision of this Agreement be
            ----------
deemed to impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.

     5.3  No Duties Except as Specified in Intercreditor Agreement.  The
          --------------------------------------------------------
Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity and at
its own cost and expense (but without any right of indemnity in respect of any
such cost or expense) promptly take such action as may be necessary to duly
discharge all Liens on any of the Trust Accounts or any monies deposited therein
which result from claims against it in its individual capacity not related to
its activities hereunder or any other Operative Agreement.

                                       55
<PAGE>

     5.4  Notice from the Liquidity Providers and Trustee.  If any Liquidity
          -----------------------------------------------
Provider or any Trustee has notice of an Indenture Default or a Triggering
Event, such Person shall promptly give notice thereof to all other Liquidity
Providers, to the Trustees and to the Subordination Agent, provided, however,
                                                           --------  -------
that no such Person shall have any liability hereunder as a result of its
failure to deliver any such notice.

                                  ARTICLE VI

                            THE SUBORDINATION AGENT

     6.1  Acceptance of Trusts and Duties.  Each of the Class A-1 Trustee, the
          -------------------------------
Class A-2 Trustee and the Class B Trustee hereby designates and appoints the
Subordination Agent as the agent and trustee of such Trustee under the
applicable Liquidity Facility and authorizes the Subordination Agent to enter
into the applicable Liquidity Facility as agent and trustee for such Trustee.
Each of the Liquidity Providers and each of the Trustees hereby designates and
appoints State Street as the Subordination Agent under this Agreement.  State
Street hereby accepts the duties hereby created and applicable to it as the
Subordination Agent and agrees to perform the same but only upon the terms of
this Agreement and agrees to receive and disburse all monies received by it in
accordance with the terms hereof.  The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence or for its negligence in the receipt and
disbursement of funds, (b) as provided in Section 2.2 or 5.3 and (c) for
                                          -----------    ---
liabilities that may result from the material inaccuracy of any representation
or warranty of the Subordination Agent made in its individual capacity in any
Operative Agreement.  The Subordination Agent shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.

     6.2  Absence of Duties.  The Subordination Agent shall have no duty to see
          -----------------
to any recording or filing of this Agreement or any other document, or to see to
the maintenance of any such recording or filing.

     6.3  No Representations or Warranties as to Documents.  The Subordination
          ------------------------------------------------
Agent in its individual capacity does not make nor shall be deemed to have made
any representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Subordination Agent, made in its individual capacity, under
any Operative Agreement to which it is a party.  The Certificateholders, the
Trustees and the Liquidity Providers make no representation or warranty
hereunder whatsoever.

     6.4  No Segregation of Monies; No Interest.  Any monies paid to or retained
          -------------------------------------
by the Subordination Agent pursuant to any provision hereof and not then
required to be distributed to any

                                       56
<PAGE>

Trustee or any Liquidity Provider as provided in Articles II and III need not be
                                                 -----------     ---
segregated in any manner except to the extent required by such Articles II and
                                                               -----------
III and by law, and the Subordination Agent shall not (except as otherwise
---
provided in Section 2.2) be liable for any interest thereon; provided, however,
            -----------                                      --------  -------
that any payments received or applied hereunder by the Subordination Agent shall
be accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.

     6.5  Reliance; Agents; Advice of Counsel.  The Subordination Agent shall
          -----------------------------------
not incur liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties.  As to the Pool Balance of any Trust as of any
date, the Subordination Agent may for all purposes hereof rely on a certificate
signed by any Responsible Officer of the Trustee, and such certificate shall
constitute full protection to the Subordination Agent for any action taken or
omitted to be taken by it in good faith in reliance thereon.  As to any fact or
matter relating to the Liquidity Providers or the Trustees the manner of
ascertainment of which is not specifically described herein, the Subordination
Agent may for all purposes hereof rely on a certificate, signed by any
Responsible Officer of the applicable Liquidity Provider or the Trustee, as the
case may be, as to such fact or matter, and such certificate shall constitute
full protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon.  The Subordination Agent shall
assume, and shall be fully protected in assuming, that each of the Liquidity
Providers and each of the Trustees are authorized to enter into this Agreement
and to take all action to be taken by them pursuant to the provisions hereof,
and shall not inquire into the authorization of each of the Liquidity Providers
and each of the Trustees with respect thereto.  In the administration of the
trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other skilled
persons to be selected and retained by it, and the Subordination Agent shall not
be liable for the acts or omissions of any agent appointed with due care or for
anything done, suffered or omitted in good faith by it in accordance with the
advice or written opinion of any such counsel, accountants or other skilled
persons.

     6.6  Capacity in Which Acting.  The Subordination Agent acts hereunder
          ------------------------
solely as agent and trustee herein and not in its individual capacity, except as
otherwise expressly provided in the Operative Agreements.

     6.7  Compensation.  The Subordination Agent shall be entitled to reasonable
          ------------
compensation, including expenses and disbursements, for all services rendered
hereunder and shall have a priority claim to the extent set forth in Article III
                                                                     -----------
on all monies collected hereunder for the payment of such compensation, to the
extent that such compensation shall not be paid by others. The Subordination
Agent agrees that it shall have no right against any Trustee or any Liquidity
Provider for any fee as compensation for its services as agent under this
Agreement.  The provisions of this Section 6.7 shall survive the termination of
                                   -----------
this Agreement.

                                       57
<PAGE>

     6.8  May Become Certificateholder.  The institution acting as Subordination
          ----------------------------
Agent hereunder may become a Certificateholder and have all rights and benefits
of a Certificateholder to the same extent as if it were not the institution
acting as the Subordination Agent.

     6.9  Subordination Agent Required; Eligibility.  There shall at all times
          -----------------------------------------
be a Subordination Agent hereunder which shall be a corporation organized and
doing business under the laws of the United States of America or of any state or
territory thereof or the District of Columbia having a combined capital and
surplus of at least $75,000,000 (or $5,000,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of the
United States, any state or territory thereof or of the District of Columbia and
having a combined capital and surplus of at least $75,000,000), if there is such
an institution willing and able to perform the duties of the Subordination Agent
hereunder upon reasonable or customary terms.  Such corporation shall be a
citizen of the United States and shall be authorized under the laws of the
United States or any State or territory thereof or of the District of Columbia
to exercise corporate trust powers and shall be subject to supervision or
examination by federal, state, territorial or District of Columbia authorities.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of any of the aforesaid supervising or examining
authorities, then, for the purposes of this Section 6.9, 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 condition so published.

          In case at any time the Subordination Agent shall cease to be eligible
in accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
                                                                  -----------

     6.1  Money to Be Held in Trust.  All Notes, monies and other property
          -------------------------
deposited with or held by the Subordination Agent pursuant to this Agreement
shall be held in trust for the benefit of the parties entitled to such Notes,
monies and other property.  All such Notes, monies or other property shall be
held in the Trust Department of the institution acting as Subordination Agent
hereunder.

                                  ARTICLE VII

                                  [Reserved]

                                 ARTICLE VIII
                         SUCCESSOR SUBORDINATION AGENT

                                       58
<PAGE>

     8.1  Replacement of Subordination Agent; Appointment of Successor.  The
          ------------------------------------------------------------
Subordination Agent may resign at any time by so notifying the Trustee and the
Liquidity Providers.  United (so long as no "Event of Default" has occurred and
is continuing under any Owned Aircraft Indenture or Lease (as such term is
defined therein)) or the Controlling Party may remove the Subordination Agent
for cause by so notifying the Subordination Agent, and the Controlling Party may
appoint a successor Subordination Agent.  The Controlling Party shall remove the
Subordination Agent if:

          (1) the Subordination Agent fails to comply with Section 6.9;
                                                           -----------

          (2) the Subordination Agent is adjudged bankrupt or insolvent;

          (3) a receiver or other public officer takes charge of the
     Subordination Agent or its property; or

          (4) the Subordination Agent otherwise becomes incapable of acting.

          If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor Subordination
Agent.

          A successor Subordination Agent shall deliver (x) a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement.  The
successor Subordination Agent shall mail a notice of its succession to the
Liquidity Providers and the Trustees.  The retiring Subordination Agent shall
promptly transfer its rights under each of the Liquidity Facilities and all of
the property held by it as Subordination Agent to the successor Subordination
Agent.

          If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.

          If the Subordination Agent fails to comply with Section 6.9 (to the
                                                          -----------
extent applicable), one or more of the Trustees or one or more of the Liquidity
Providers may petition any court of competent jurisdiction for the removal of
the Subordination Agent and the appointment of a successor Subordination Agent.

                                       59
<PAGE>

          Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed.  No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.

                                  ARTICLE IX

                          SUPPLEMENTS AND AMENDMENTS

     9.1  Amendments, Waivers, etc.  (a)  This Agreement may not be
          -------------------------
supplemented, amended or modified without the consent of the Trustee (acting
except in the case of any amendment pursuant to Section 3.6(e) hereof with
                                                --------------
respect to any Replacement Liquidity Facility or any amendment contemplated by
the last sentence of this Section 9.1(a) with the consent of holders of
                          --------------
Certificates of each Class evidencing interests in the related Trust aggregating
not less than a majority in interest in such Trust or as otherwise authorized
pursuant to the relevant Trust Agreements), the Subordination Agent and each
Liquidity Provider; provided, however, that this Agreement may be supplemented,
                    --------  -------
amended or modified without the consent of any Trustee and any Liquidity
Provider if such supplement, modification or amendment is in accordance with
Section 9.1(c) or cures an ambiguity or inconsistency or does not materially
--------------
adversely affect such Trustee, the Liquidity Providers or the holders of the
related Class of Certificates; provided, further, however, that if such
                               --------  -------  -------
supplement, amendment or modification would (x) directly or indirectly modify or
supersede, or otherwise conflict with, Section 2.2(b), Section 3.6(f) or the
                                       --------------  --------------
second sentence of Section 10.6 (collectively, together with this proviso, the
                   ------------
"United Provisions") or (y) otherwise adversely affect the interests of a
------------------
potential Replacement Liquidity Provider or of United with respect to its
payment obligations under any Lease or Owned Aircraft Indenture, then such
supplement, amendment or modification shall not be effective without the
additional written consent of United. Notwithstanding the foregoing, without the
consent of each Certificateholder and each Liquidity Provider, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of the
interest in any Trust or Trusts of the same Class evidenced by the Certificates
issued by such Trust or Trusts necessary to consent to modify or amend any
provision of this Agreement or to waive compliance therewith or (ii) except as
provided in Section 9.1(c) modify Section 2.4, 3.2, 3.3 or 3.6(f) relating to
            --------------        -----------  ---  ---    ------
the distribution of monies received by the Subordination Agent hereunder from
the Trust Owned Notes or pursuant to the Liquidity Facilities.  Nothing
contained in this Section 9.1 shall require the consent of the Trustee with
                  -----------
respect to a Class of Certificates at any time following the payment of Final
Distributions with respect to such Class of Certificates.

          If the Replacement Liquidity Facility for any Liquidity Facility in
accordance with Section 3.6(e) hereof is to be comprised of more than one
                --------------
instrument as contemplated by the definition of the term "Replacement Liquidity
Facility", then each of the parties hereto agrees to

                                       60
<PAGE>

amend this Agreement to incorporate appropriate mechanics for multiple Liquidity
Facilities for an individual Trust.

          (b)   If the Subordination Agent, as the registered holder of any
Trust Owned Notes, receives a request for its consent to any amendment,
modification or waiver under or with respect to any such Notes, any
Confirmation, the Indenture pursuant to which such Notes were issued or if
applicable, any Leased Equipment Notes, the Lease, Participation Agreement or
other related document, (i) if no Indenture Default shall have occurred and be
continuing, the Subordination Agent shall request instructions from the Trustee
which holds the relevant Trust Owned Notes and the consent of each Liquidity
Provider (which consent shall not be unreasonably withheld or delayed) and shall
vote or consent in accordance with the vote of each such Trustee and the
instructions of the Liquidity Providers and (ii) if any Indenture Default
(which, in the case of an Indenture pertaining to a Leased Aircraft, has not
been cured by the Owner Trustee or the Owner Participant thereunder, if
applicable, pursuant to Section 4.3 of such Indenture or in the case of an
Indenture pertaining to the 747 Leased Aircraft, has not been cured by the Owner
Trustee or the Owner Participant thereunder, if applicable, pursuant to Section
8.03(e) of such Indenture) shall have occurred and be continuing with respect to
such Indenture, the Subordination Agent will exercise its voting rights as
directed by the Controlling Party, subject to Section 4.1; provided, however,
                                              -----------  --------  -------
that no amendment of or supplement to any Indenture, Lease, Participation
Agreement or other related document or waiver or modification of the terms of,
or consent under, any thereof, shall without the consent of each Liquidity
Provider, have any of the effects listed in the proviso of Section 11.02(a) of
any Indenture.

          (c)   If, with respect to any Aircraft, Class D Certificates are
issued, this Agreement shall be amended by written agreement of United and the
Subordination Agent to provide for the subordination of such Class D
Certificates to the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates, the Class C-1 Certificates and the Class C-2 Certificates
substantially in the same manner as the Class C-1 Certificates and the Class C-2
Certificates are subordinated hereunder to the Class A-1 Certificates, the Class
A-2 Certificates and the Class B Certificates. A Ratings Confirmation shall be
obtained prior to any such issuance. The amendment to this Agreement to give
effect to the issuance of any Class D Certificates shall include:

          (i)   the trustee of the Class D Trust shall be added as a party to
     this Agreement;

          (ii)  the definitions of "Cash Collateral Account," "Certificate,"
     "Class," "Equipment Notes," "Final Maturity Date," "Liquidity Facilities,"
     "Liquidity Provider," "LTV Ratio," "Stated Interest Rate," "Trust," "Trust
     Agreement," and "Controlling Party" shall be revised, as appropriate, to
     reflect the issuance of the Class D Certificates and the subordination
     thereof; and

          (iii) the provisions of this Agreement governing payments with respect
     to Certificates and related notices, including Sections 2.4, 3.1, 3.2, 3.3
                                                    ------------------ --------
     and 3.6(f), shall be
         ------

                                       61
<PAGE>

     revised to provide for distributions on the Class D Certificates after
     payment of all relevant distributions on the Class C-1 Certificates and the
     Class C-2 Certificates.

If, with respect to any Aircraft, Series D United Equipment Notes are issued to
any Person other than the Class D Trust, this Agreement shall be amended by
written agreement of United and the Subordination Agent to (i) provide for each
holder of a Series D United Equipment Note to be bound by the provisions of
Section 2.6(a) so that the Controlling Party, among other things, shall be
--------------
entitled to direct the applicable Indenture Trustee as provided therein (and
such Series D United Equipment Notes shall make effective provision therefor so
as to bind each holder thereof to such provisions of Section 2.6(a) and (ii) to
                                                     --------------
revise the definitions of "Controlling Party" and "Equipment Notes," as
appropriate, to reflect the issuance of the Series D United Equipment Notes (and
the prior rights, as against the holders of such Series D United Equipment
Notes, of the Class A-1 Trustee, the Class A-2 Trustee, the Class B Trustee, the
Class C-1 Trustee and the Class C-2 Trustee to be such "Controlling Party").  A
Ratings Confirmation shall be obtained prior to any such issuance.

     9.2  Subordination Agent Protected.  If, in the reasonable opinion of the
          -----------------------------
institution acting as the Subordination Agent hereunder, any document required
to be executed pursuant to the terms of Section 9.1 affects any right, duty,
                                        -----------
immunity or indemnity with respect to it under this Agreement or any Liquidity
Facility, the Subordination Agent may in its discretion decline to execute such
document.

     9.3  Effect of Supplemental Agreements.  Upon the execution of any
          ---------------------------------
amendment or supplement hereto pursuant to the provisions hereof, this Agreement
shall be and be deemed to be and shall be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Agreement of the parties hereto and beneficiaries
hereof shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental agreement shall be and be deemed to be and
shall be part of the terms and conditions of this Agreement for any and all
purposes.  In executing or accepting any supplemental agreement permitted by
this Article IX, the Subordination Agent shall be entitled to receive, and shall
     ----------
be fully protected in relying upon, an opinion of counsel stating that the
execution of such supplemental agreement is authorized or permitted by this

     9.4  Copy to Rating Agencies.  Promptly following its receipt of each
          -----------------------
amendment, consent, modification, supplement or waiver contemplated by this

Article IX, the Subordination Agent shall send a copy thereof to each Rating
----------
Agency.

                                   ARTICLE X

                                 MISCELLANEOUS

                                       62
<PAGE>

     10.1  Termination of Intercreditor Agreement.  Following payment of Final
           --------------------------------------
Distributions with respect to each Class of Certificates and the payment in full
of all Liquidity Obligations to the Liquidity Providers and so long as (i) there
shall then be no other amounts due to the Certificateholders, the Trustee, the
Liquidity Providers and the Subordination Agent hereunder or under the Trust
Agreements and (ii) the commitment of the Liquidity Providers under the
Liquidity Facilities shall have expired or been terminated, this Agreement and
the trusts created hereby shall terminate and this Agreement shall be of no
further force or effect.  Except as aforesaid or otherwise provided, this
Agreement and the trusts created hereby shall continue in full force and effect
in accordance with the terms hereof.

     10.2  Intercreditor Agreement for Benefit of Trustee, Liquidity Providers
           -------------------------------------------------------------------
and Subordination Agent.  Nothing in this Agreement, whether express or implied,
-----------------------
shall be construed to give to any Person other than the Trustee, the Liquidity
Providers and the Subordination Agent (and United, in the case of Section 9.1)
                                                                  -----------
any legal or equitable right, remedy or claim under or in respect of this
Agreement.

     10.3  Notices.  Unless otherwise expressly specified or permitted by the
           -------
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Agreement to be
made, given, furnished or filed shall be in writing, mailed by certified mail,
postage prepaid, or by confirmed telecopy and

     (i)   if to the Subordination Agent, addressed to it at its office at:

           State Street Bank and Trust Company of Connecticut,
           National Association
           225 Asylum Street
           Goodwin Square
           Hartford, Connecticut 06103
           Attention: Corporate Trust Division
           Telephone: 860-244-1844
           Telecopy: 860-244-1881

     (ii)  if to the Trustee, addressed to it at its office at:

           State Street Bank and Trust Company of Connecticut,
           National Association
           225 Asylum Street
           Goodwin Square
           Hartford, Connecticut 06103
           Attention: Corporate Trust Division
           Telephone: 860-244-1844
           Telecopy: 860-244-1881

                                       63
<PAGE>

     (iii)  if to the Liquidity Provider, addressed to it at its office at:

            Landesbank Hessen-Thuringen Girozentrale
            Main Tower
            Neue Mainzer Str. 52 - 58
            60311 Frankfurt am Main
            Germany
            Attention: Asset Finance
            Telecopy: 49-69-9132-4392

            with a copy to:

            Landesbank Hessen-Thuringen
            420 Fifth Avenue, 24/th/ Floor
            New York, NY 10018
            Attention: Project Finance, Michael Novack
            Telephone: 212-703-5224
            Telecopy:  212-703-5256

Whenever any notice in writing is required to be given by the Trustee or any
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received, if such notice is mailed by certified mail, postage prepaid or by
courier service or is sent by confirmed telecopy addressed as provided above.
Any party hereto may change the address to which notices to such party will be
sent by giving notice of such change to the other parties to this Agreement.

     10.4  Severability.  Any provision of this Agreement 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.

     10.5  No Oral Modifications or Continuing Waivers.  No terms or provisions
           -------------------------------------------
of this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party or other Person against
whom enforcement of the change, waiver, discharge or termination is sought and
any other party or other Person whose consent is required pursuant to this
Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.

     10.6  Successors and Assigns.  All covenants and agreements contained
           ----------------------
herein shall be binding upon, and inure to the benefit of, each of the parties
hereto and the successors and assigns

                                       64
<PAGE>

of each, all as herein provided. The agreements contained in Section 9.1 shall
                                                             -----------
inure to the benefit of United and its successors and assigns.

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

     10.8  Counterpart Form.  This Agreement 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 agreement.

     10.9  Subordination.  (a)  As between the Liquidity Providers, on the one
           -------------
hand, and the Trustees and the Certificateholders, on the other hand, and as
among the Trustees and the related Certificateholders, this Agreement shall be a
subordination agreement for purposes of Section 510 of the United States
Bankruptcy Code, as amended from time to time.

          (b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all Liquidity Obligations then due
and payable, any party hereto shall have received any payment or distribution in
respect of Notes or any other amount under the Indentures or other Operative
Agreements which, had the subordination provisions of this Agreement been
properly applied to such payment, distribution or other amount, would not have
been distributed to such Person, then such payment, distribution or other amount
shall be received and held in trust by such Person and paid over or delivered to
the Subordination Agent for application as provided herein.

          (c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations), which
is subsequently invalidated, declared preferential, set aside and/or required to
be repaid to a trustee, receiver or other party, then, to the extent of such
payment, such obligations (or, in the case of the Liquidity Providers, such
Liquidity Obligations) intended to be satisfied shall be revived and continue in
full force and effect as if such payment had not been received.

          (d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
                                    ------------  ---     ---
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations are not so secured.  Each Trustee expressly agrees (on
behalf of itself and the holders of Certificates) not to assert priority over
the holders of Liquidity Obligations due to their status as secured creditors in
any bankruptcy, insolvency or other legal proceeding.

                                       65
<PAGE>

          (e)   Each of the Trustees (on behalf of itself and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:

          (i)   obtain a Lien on any property to secure any amounts owing to it
     hereunder, including, in the case of the Liquidity Providers, the Liquidity
     Obligations,

          (ii)  obtain the primary or secondary obligation of any other obligor
     with respect to any amounts owing to it hereunder, including, in the case
     of the Liquidity Providers, any of the Liquidity Obligations,

          (iii) renew, extend, increase, alter or exchange any amounts owing to
     it hereunder, including, in the case of the Liquidity Providers, any of the
     Liquidity Obligations, or release or compromise any obligation of any
     obligor with respect thereto,

          (iv)  refrain from exercising any right or remedy, or delay in
     exercising such right or remedy, which it may have, or

          (v)   take any other action which might discharge a subordinated party
     or a surety under applicable law;

     provided, however, that the taking of any such actions by any of the
     --------  -------
     Trustee, the Liquidity Providers or the Subordination Agent shall not
     prejudice the rights or adversely affect the obligations of any other party
     under this Agreement.

     10.10  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
            -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW)), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     10.11  Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
            -----------------------------------------------------------
Indemnity.
----------

          (a)  Each of the parties hereto hereby irrevocably and
               unconditionally:

               (i) submits for itself and its property in any legal action or
          proceeding relating to this Agreement or any other Operative
          Agreement, or for recognition and enforcement of any judgment in
          respect hereof or thereof, to the non-exclusive general jurisdiction
          of the courts of the State of New York, the courts of the United
          States of America for the Southern District of New York, and the
          appellate courts from any thereof;

                                       66
<PAGE>

              (ii)  consents that any such action or proceeding may be brought
          in such courts, and waives any objection that it may now or hereafter
          have to the venue of any such action or proceeding in any such court
          or that such action or proceeding was brought in an inconvenient court
          and agrees not to plead or claim the same;

              (iii) agrees that service of process in any such action or
          proceeding may be effected by mailing a copy thereof by registered or
          certified mail (or any substantially similar form of mail), postage
          prepaid, to each party hereto at its address set forth in Section
                                                                    -------
          10.3, or at such other address of which the other person shall have
          ----
          been notified pursuant thereto; and

              (iv)  agrees that nothing herein shall affect the right to effect
          service of process in any other manner permitted by law or shall limit
          the right to sue in any other jurisdiction.

          (b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims.  Each of the parties warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel.  THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

          (c) Each Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States or of any state thereof
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any similar
successor legislation.

                                       67
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written, and acknowledge that this Agreement has
been made and delivered in the City of Chicago, and this Agreement has become
effective only upon such execution and delivery.

                                    STATE STREET BANK AND TRUST COMPANY OF
                                    CONNECTICUT, NATIONAL ASSOCIATION,
                                       not in its individual capacity but solely
                                       as Trustee for each of the Trusts

                                    By:_________________________________________
                                       Name:
                                       Title:

                                      S-1
<PAGE>

                                    LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
                                       as Class A-1 Liquidity Provider,
                                       Class A-2 Liquidity Provider, and
                                       Class B Liquidity Provider

                                    By:______________________________________
                                       Name:
                                       Title:

                                      S-2
<PAGE>

                                    STATE STREET BANK AND TRUST COMPANY OF
                                    CONNECTICUT, NATIONAL ASSOCIATION,
                                       not in its individual capacity except as
                                       expressly set forth herein but solely as
                                       Subordination Agent and trustee

                                    By:________________________________________
                                       Name:
                                       Title:

                                      S-3
<PAGE>

                                                                      SCHEDULE 1

                                  INDENTURES
                                  ----------

     1.   Indenture, dated as of July 31, 2000, between AFE, as Issuer (the
"Issuer"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     2.   Trust Indenture and Mortgage (1992 757 V), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     3.   Trust Indenture and Mortgage (1992 757 W), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     4.   Trust Indenture and Mortgage (1992 757 X), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     5.   Trust Indenture and Mortgage (1992 757 Y), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     6.   Trust Indenture and Mortgage (1992 757 Z), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     7.   Trust Indenture and Mortgage (1992 757 AA), dated as of December 1,
1992, between State Street Bank and Trust Company, as Owner Trustee (the "Owner
Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     8.   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 (the "Owner
<PAGE>

Trustee"), and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee (the "Indenture Trustee").

     9.   Trust Indenture and Mortgage (2000 A320-1), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     10.  Trust Indenture and Mortgage (2000 A320-2), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     11.  Trust Indenture and Mortgage (2000 A320-3), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     12.  Trust Indenture and Mortgage (2000 A320-4), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     13.  Trust Indenture and Mortgage (2000 A320-5), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     14.  Trust Indenture and Mortgage (2000 A320-6), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     15.  Trust Indenture and Mortgage (2000 777-1), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     16.  Trust Indenture and Mortgage (2000 777-2), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     17.  Trust Indenture and Mortgage (2000 777-3), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     18.  Trust Indenture and Mortgage (2000 777-4), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").
<PAGE>

     19.  Trust Indenture and Mortgage (2000 757-1), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     20.  Trust Indenture and Mortgage (2000 767-1), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").

     21.  Trust Indenture and Mortgage (2000 767-2), dated as of July 31, 2000,
between United Air Lines, Inc., as Owner (the "Owner"), and State Street Bank
and Trust Company of Connecticut, National Association, as Indenture Trustee
(the "Indenture Trustee").<PAGE>

                                                                    EXHIBIT 4.11

________________________________________________________________________________

                          AFE NOTE PURCHASE AGREEMENT

                           Dated as of July 31, 2000

                                    between

                            UNITED AIR LINES, INC.,

                                   AFE TRUST,

                                      and

                      STATE STREET BANK AND TRUST COMPANY
                    OF CONNECTICUT, NATIONAL ASSOCIATION, as
                     Pass Through Trustee under each of the
             United Airlines 2000-1 Pass Through Trust Agreements,
                 Subordination Agent and AFE Indenture Trustee

________________________________________________________________________________
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
 SECTION  1.       Purchase of AFE Notes.............................................      2
 SECTION  1.A      Certain Definitions...............................................      2
 SECTION  1.B      Payment to Lease Notes Seller.....................................      3
 SECTION  2.       [Reserved]........................................................      4
 SECTION  3.       Conditions Precedent..............................................      4
 SECTION  4.       Representations, Warranties and Covenants of AFE Trust............     11
 SECTION  5.       Representations, Warranties and Covenants of United...............     13
 SECTION  6.       Representations, Warranties and Covenants of Other Parties........     16
 SECTION  7.       Indemnification by United.........................................     21
 SECTION  8.       Limited Liability.................................................     25
 SECTION  9.       Notices...........................................................     26
 SECTION  10.      Expenses..........................................................     26
 SECTION  11.      Withholding.......................................................     26
 SECTION  12.      Miscellaneous.....................................................     26
</TABLE>

SCHEDULES

Schedule I   Names, Addresses and Wire Instructions

Schedule II  AFE Notes, Purchasers and Purchase Prices

                                       i
<PAGE>

                          AFE NOTE PURCHASE AGREEMENT

     This AFE NOTE PURCHASE AGREEMENT, dated as of July 31, 2000 (this
"Agreement"), among UNITED AIR LINES, INC., a Delaware corporation ("United"),
 ---------                                                           ------
AFE TRUST, a Delaware business trust ("AFE Trust"), and STATE STREET BANK AND
                                       ---------
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association (the "Bank"), not in its individual capacity, except as otherwise
                  ----
expressly provided herein, but solely as trustee (in such capacity, the "Pass
                                                                         ----
Through Trustee") under each of the five separate Pass Through Trust Agreements
---------------
(as defined below), subordination agent (in such capacity, the "Subordination
                                                                -------------
Agent"), and indenture trustee (in such capacity, the "AFE Indenture Trustee")
-----                                                  ---------------------
under the AFE Indenture (as defined below).

     WHEREAS, United has leased six Boeing 757-222 aircraft (collectively, the
"Leased Aircraft") in six separate leveraged lease financings and in connection
 ---------------
therewith, each lessor of such aircraft has issued notes (the "Lease Notes")
                                                               -----------
under an indenture (the "Leveraged Lease Indentures") secured by such aircraft
                         --------------- ----------
and such lessor's rights under the leases (the "Leases") of such aircraft to
                                                ------
United;

     WHEREAS, pursuant to the Trust Indenture, dated as of the date hereof (the
"AFE Indenture"), between AFE Trust and the AFE Indenture Trustee, AFE Trust
 -------------
proposes to issue on a nonrecourse basis up to four series of AFE Notes, all of
which are to be secured by the Lease Notes and related rights under the
Leveraged Lease Indentures in and to the Aircraft and the Leases and AFE Trust's
rights under the Confirmations (as defined below) granted pursuant to the AFE
Indenture by AFE Trust in favor of the AFE Indenture Trustee;

     WHEREAS, pursuant to the Confirmations, dated as of the date hereof (the
"Confirmations"), by and between AFE Trust and United (each such confirmation
 -------------
incorporating the ISDA Master Agreement, the Schedule to the ISDA Master
Agreement and the ISDA Definitions), AFE Trust agrees to make certain floating
rate interest payments to United and United agrees to make certain fixed rate
interest payments to AFE Trust;

     WHEREAS, Series A-1 AFE Notes, Series A-2 AFE Notes, Series B AFE Notes,
and Series C-1 AFE Notes with respect to each Aircraft (each, a "Series") will
                                                                 ------
be issued on the Closing Date (as defined in Section 1 below) to the
                                             ---------
Subordination Agent acting on behalf of the Pass Through Trustee for the
applicable Pass Through Trust as evidence of AFE Trust's indebtedness to the
Pass Through Trustee;

     WHEREAS, pursuant to each of the Pass Through Trust Supplements (the "Trust
                                                                           -----
Supplements"; and together with the Basic Pass Through Trust Agreement, the
-----------
"Pass Through Trust Agreements"), on the Closing Date (as defined in Section 1
 -----------------------------                                       ---------
below), a separate grantor trust (each, a "Pass Through Trust") will be created
                                           ------------------
to facilitate certain of the transactions contemplated hereby,
<PAGE>

including, without limitation, the issuance and sale of enhanced pass through
certificates pursuant thereto (collectively, the "Pass Through Certificates") to
                                                  -------------------------
provide the financing of the Aircraft;

     WHEREAS, part of the proceeds from the issuance and sale of the Pass
Through Certificates will be applied by the Subordination Agent, acting on
behalf of the Pass Through Trustee, to purchase from AFE Trust on behalf of each
Pass Through Trust, the AFE Notes bearing the same interest rate as the Pass
Through Certificates issued by the related Pass Through Trust; and

     WHEREAS, concurrently with the execution and delivery of this Agreement,
(i) Landesbank Hessen-Thuringen Girozentrale, a public-law banking institution
organized under the law of Germany (the "Liquidity Provider"), entered into
                                         ------------------
three revolving credit agreements (each, a "Liquidity Facility") for the benefit
                                            ------------------
of the United Airlines 2000-1A-1 Pass Through Trust, the United Airlines 2000-
1A-2 Pass Through Trust, and the United Airlines 2000-1B Pass Through Trust,
with the Subordination Agent, as agent and trustee for the Pass Through Trustee
on behalf of each such Pass Through Trust; and (ii) the Pass Through Trustee,
the Liquidity Provider and the Subordination Agent entered into the
Intercreditor Agreement, dated as of the date hereof (the "Intercreditor
                                                           -------------
Agreement");
---------

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

          SECTION 1.  Purchase of AFE Notes. (a) Subject to the satisfaction or
                      ---------------------
waiver of the conditions set forth herein, on July 31, 2000, or on such other
date agreed to by the parties hereto (the "Closing Date"):
                                           ------------

          (i)  the Pass Through Trustee for each Pass Through Trust shall pay to
     AFE Trust the purchase price set forth on Schedule II for each AFE Note
                                               -----------
     being issued and sold by AFE Trust to such Pass Through Trust; and

          (ii) AFE Trust shall issue, pursuant to Article II of the AFE
     Indenture, to the Subordination Agent, on behalf of the Pass Through
     Trustee for each of the Pass Through Trusts, an AFE Note having the Series,
     maturity date and principal amount and bearing the interest rate set forth
     on Schedule II opposite the name of such Pass Through Trust.
        -----------

          (b)  All payments pursuant to Section 1(a)(i) shall be made in
                                       ---------------
immediately available funds to such accounts and at such banks as AFE Trust
shall designate on Schedule I or as it may otherwise designate in writing not
                   ----------
less than one Business Day prior to the Closing Date.

          SECTION 1.A  Certain Definitions.  (a) As used in this Agreement and
                       -------------------
unless otherwise expressly provided, the following capitalized terms shall have
the following respective meanings:

          "AFE Certificate Purchase Agreement" means each separate AFE
          Certificate Purchase Agreement, dated as of July 31, 2000, between
          Wilmington Trust
<PAGE>

          Company, as Trustee of the AFE Trust, as Seller, and the AFE Investor
          party thereto, as Purchaser.

          "AFE Trust Agreement" means the Trust Agreement, dated as of June 9,
          2000, between United Air Lines, Inc., as Trustor (solely for purposes
          of establishing the AFE Trust), and Wilmington Trust Company, as
          Trustee.

          "Airframe" shall have the meaning specified in the Leases.

          "Assignment Agreement" means each of the separate Assignment
          Agreements, dated as of July 31, 2000, between the holder of the Lease
          Notes party thereto and the Lease Note Seller.

          "Engine" shall have the meaning specified in the Leases.

          "Expenses" shall have the meaning specified in the Leases.

          "FAA" means the Federal Aviation Administration.

          "Federal Aviation Act" means Title 49 of the United States Code
          (Transportation), as amended.

          "Fundamental Documents" means, collectively (i) any document that is
          an "Operative Document," a "Pass Through Document" or a "Fundamental
          Document" under this Agreement, any Leveraged Lease Indenture or the
          AFE Indenture and (ii) any amendment to any of the foregoing executed
          in connection with the transactions contemplated hereby.

          "Lease Notes Seller" means Four Star Leasing, Inc.

          "Leverage Lease Documents" means, for each Leased Aircraft, the
          Operative Documents as defined in the related Lease.

          "Operative Documents" shall mean any document that is an Operative
          Document under the AFE Indenture.

          "Parts" shall have the meaning specified in the Leases.

          "Trust Property" shall have the meaning specified in the AFE Trust
          Agreement.

          (b) Unless otherwise specifically defined herein, capitalized terms
used in this Agreement shall have the respective meanings specified in the
Intercreditor Agreement.

                                       3
<PAGE>

          SECTION 1.B  Payment to Lease Notes Seller.  AFE Trust shall apply the
                       -----------------------------
purchase price received for the AFE Notes, together with proceeds from the
issuance of AFE Trust Certificates, to the purchase of the outstanding leased
equipment notes from the Lease Note Seller in accordance with Section 1.3 of the
Loan Certificate Purchase Agreements (as defined in the AFE Indenture).

          SECTION 2.  [Reserved].

          SECTION 3.  Conditions Precedent.  (a)  Conditions Precedent to the
                      --------------------        ---------------------------
     Obligations of the Pass Through Trustee.  The obligation of the Pass
     ---------------------------------------
     Through Trustee to make the payments described in Section 1(a)(i) and to
                                                       ---------------
     enter into the Fundamental Documents to which it is a party are subject to
     the fulfillment, on or prior to the Closing Date, of the following
     conditions precedent:

          (i)  No change shall have occurred after the date of the execution and
     delivery of this Agreement in applicable law or regulations thereunder or
     interpretations thereof by appropriate regulatory or judicial authorities
     which, in the opinion of each Pass Through Trustee, would make it a
     violation of law or regulations for the Pass Through Trustee to make the
     payments described in Section 1(a), to execute, deliver and perform the
                           ------------
     Fundamental Documents, to acquire the AFE Notes or to realize the security
     afforded by the AFE Indenture.

          (2)  AFE Trust shall have tendered the AFE Notes to the AFE Indenture
     Trustee for authentication and shall have tendered the AFE Notes to the
     Subordination Agent on behalf of the Pass Through Trustee in accordance
     with Section 1.  AFE Trust shall have tendered the AFE Trust Certificates
          ---------
     and the AFE Investors shall have tendered payment of amounts equal to their
     investments.

          (3)  The Pass Through Trustee shall have received duly authorized and
     validly executed counterparts or conformed copies of the following
     documents in form and substance satisfactory to the Pass Through Trustee
     and all such documents shall be in full force and effect:

               (2)  this Agreement;

               (3)  the Basic Pass Through Trust Agreement and each Trust
                    Supplement;

               (4)  the Intercreditor Agreement;

               (5)  the Liquidity Facility for each of the Class A-1 Trust, the
                    Class A-2 Trust, and the Class B Trust;

               (6)  each Loan Certificate Purchase Agreement (as defined in the
                    AFE Indenture);

                                       4
<PAGE>

               (7)  the Confirmations;

               (8)  the AFE Indenture;

               (9)  the AFE Notes;

               (10) the Leveraged Lease Documents with respect to the Leased
                    Aircraft;

               (11) the United Equipment Indentures (as defined in the United
                    Equipment Note Purchase Agreement);

               (12) the AFE Trust Agreement;

               (13) the Owned Aircraft Indentures;

               (14) each Assignment Agreement;

               (15) the 747 Leased Equipment Note Purchase Agreement;

               (16) the United Equipment Note Purchase Agreement;

               (17) each AFE Certificate Purchase Agreement;

               (18) the Underwriting Agreement;

               (19) the Class C-1 Certificate Purchase Agreement;

               (20) the Class C-2 Certificate Purchase Agreement;

               (21) the 747 Leased Aircraft Indenture (as defined in the 747
                    Leased Equipment Note Purchase Agreement);

               (22) the 747 Leased Aircraft Participation Agreement;

               (23) the 747 Leased Aircraft Trust Agreement (as defined in the
                    747 Leased Equipment Note Purchase Agreement);

               (24) the 747 Leased Aircraft Lease Agreement (as defined in the
                    747 Leased Equipment Note Purchase Agreement);

               (25) the 747 Leased Aircraft Owner Participant Guaranty Agreement
                    (as defined in the 747 Leased Equipment Note Purchase
                    Agreement);

               (26) the 747 Leased Aircraft Assignment and Assumption Agreement
                    (as defined in the 747 Leased Equipment Note Purchase
                    Agreement); and

                                       5
<PAGE>

               (27) acknowledgment copies of the Uniform Commercial Code
                    financing statements (and any amendments thereto) referred
                    to in Section 3(a)(iii)(K) of the 747 Leased Equipment Note
                    Purchase Agreement.

          (iv) Uniform Commercial Code financing statements covering all the
     security interests created by or pursuant to the Granting Clause of the AFE
     Indenture shall have been executed and delivered by AFE Trust and the AFE
     Trustee, and such financing statements shall have been duly filed or
     arrangements satisfactory to the Pass Through Trustee shall have been made
     for filing within 10 days after the Closing Date, in such places deemed
     necessary or advisable.

          (v)  The Pass Through Trustee shall have received the following, in
     each case in form and substance satisfactory to it:

               (1) a certified copy of the Certificate of Trust and a copy of
          the AFE Trust Agreement, certified by the Secretary or an Assistant
          Secretary of the AFE Trust, duly authorizing the execution, delivery
          and performance by the AFE Trust of this Agreement and each other
          Fundamental Document required to be executed and delivered by the AFE
          Trust in accordance with the provisions hereof and thereof;

               (2) a certified copy of the Restated Certificate of Incorporation
          and By-Laws of United and a copy of resolutions of the board of
          directors of United or the executive committee thereof, certified by
          the Secretary or an Assistant Secretary of United, duly authorizing
          the execution, delivery and performance by United of this Agreement
          and each other Fundamental Document required to be executed and
          delivered by United in accordance with the provisions hereof and
          thereof;

               (3) a copy of the organizational documents, by-laws and general
          authorizing resolutions of the boards of directors (or executive
          committees) or other satisfactory evidence of authorization of each of
          the AFE Indenture Trustee, United and the Subordination Agent,
          certified as of the Closing Date by the Secretary or an Assistant
          Secretary of such parties, respectively, which authorize the
          execution, delivery and performance by the AFE Indenture Trustee,
          United and the Subordination Agent, respectively, of all the
          Fundamental Documents to which it is a party, together with such other
          documents and evidence with respect to the AFE Indenture Trustee,
          United, and the Subordination Agent as the Pass Through Trustee may
          reasonably request in order to establish the consummation of the
          transactions contemplated by this Agreement, the taking of all
          corporate proceedings in connection therewith and compliance with the
          conditions herein set forth; and

               (4) a certificate signed by the Secretary or an Assistant
          Secretary of each of the AFE Trust, the AFE Indenture Trustee, United
          and the Subordination Agent as to the Person or Persons authorized to
          execute and deliver this Agreement and any

                                       6
<PAGE>

          other Fundamental Document to be executed on behalf of such party in
          connection with the transactions contemplated hereby and as to the
          signature of such Person or Persons.

          (vi)   On the Closing Date, (A) the representations and warranties of
     AFE Trust in Section 4, the representations and warranties of United in
                  ---------
     Section 5, and the representations and warranties of the AFE Indenture
     ---------
     Trustee and the Subordination Agent in Section 6 shall be true and correct
                                            ---------
     in all material respects as though made on and as of such date except to
     the extent that such representations and warranties relate solely to an
     earlier date (in which case such representations and warranties shall have
     been true and correct in all material respects on and as of such earlier
     date), and (B) no event shall have occurred and be continuing, or would
     result from the transactions contemplated hereby, which constitutes (or
     would, with the passage of time or the giving of notice or both,
     constitute) an AFE Indenture Default under the AFE Indenture.

          (vii)  The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee from (A) Richards, Layton & Finger,
     counsel for the AFE Trust, and (B) Mayer, Brown & Platt, special New York
     counsel for the AFE Trust, in each case with respect to such matters and in
     form and substance reasonably satisfactory to the Pass Through Trustee.

          (viii) The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee and the AFE Trust from (A) in house
     German counsel for the Liquidity Provider,  and (B) Winthrop, Stimson,
     Putnam & Roberts, special counsel for the Liquidity Provider, in each case
     in form and substance reasonably satisfactory to the Pass Through Trustee.

          (ix)   [reserved].

          (x)    The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee and the AFE Trust from Bingham Dana
     LLP, special counsel for the AFE Indenture Trustees and the Pass Through
     Trustee, in form and substance reasonably satisfactory to the Pass Through
     Trustee.

          (xi)   The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee from (A) the General Counsel or
     Assistant General Counsel for United, (B) Vedder, Price, Kaufman &
     Kammholz, special counsel for United and (C) Mayer, Brown & Platt, special
     counsel for United, in each case with respect to such matters and in form
     and substance reasonably satisfactory to the Pass Through Trustee.

          (xii)  The Pass Through Trustee shall have received opinions addressed
     to the Pass Through Trustee from Mayer Brown & Platt, special Illinois and
     New York counsel for

                                       7
<PAGE>

     United, with respect to true sale issues in form and substance reasonably
     satisfactory to the Pass Through Trustee.

          (xiii)  The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee from Shipman & Goodwin LLP, special
     counsel for State Street Bank and Trust Company, in form and substance
     reasonably satisfactory to the Pass Through Trustee.

          (xiv)   The Pass Through Trustee shall have received an opinion
     addressed to the Pass Through Trustee and the AFE Trust from Morris, James,
     Hitchens & Williams, special Delaware counsel for United.

          (xv)    The Pass Through Trustee shall have received an independent
     insurance broker's report, and certificates of insurance, in form and
     substance reasonably satisfactory to it, as to the due compliance with the
     terms of Section 11 of the Leases with respect to the Aircraft.

          (xvi)   The Pass Through Trustee shall have received a report from
     each of the Appraisers as to the base value of the Leased Aircraft, in form
     and substance satisfactory to the Pass Through Trustee and the AFE Trust.

          (xvii)  The conditions precedent to the transactions specified in the
     Underwriting Agreement, the United Equipment Note Purchase Agreement and
     the 747 Leased Equipment Note Purchase Agreement shall have been satisfied
     (or waived) in accordance with the terms thereof.

          (xviii) With respect to the Leased Aircraft, no event shall have
     occurred that constitutes an Event of Default or an  Event of Loss under
     the Leveraged Lease Documents.

          (xix)   The Lease Notes shall have been duly issued, authenticated and
     registered in the name of the AFE Indenture Trustee.

     (b)  Conditions Precedent to the Obligations of AFE Trust.  The obligations
          ----------------------------------------------------
of AFE Trust to participate in the transactions contemplated hereby and to enter
into the Fundamental Documents to which AFE Trust is a party are all subject to
the fulfillment to the satisfaction of or waiver by AFE Trust, on or prior to
the Closing Date, of the following conditions precedent:

          (i)  Those documents described in Section 3(a)(iii) shall have been
                                            -----------------
     duly authorized, executed and delivered by the respective party or parties
     thereto (other than AFE Trust) in the manner specified in Section
                                                               -------
     3(a)(iii), shall each be satisfactory in form and substance to AFE Trust,
     ---------
     shall be in full force and effect on the Closing Date, and an executed
     counterpart of each thereof (other than the AFE Notes) shall have been
     delivered to AFE Trust or counsel for AFE Trust.

                                       8
<PAGE>

          (ii)   AFE Trust shall have received a copy of the organizational
     documents, by-laws and general authorizing resolutions of the boards of
     directors (or executive committees) or other satisfactory evidence of
     authorization of United, the AFE Indenture Trustee, the Pass Through
     Trustee and the Subordination Agent, certified as of the Closing Date by
     the Secretary or an Assistant Secretary of each such party, respectively,
     that authorize the execution, delivery and performance by United, the AFE
     Indenture Trustee, the Pass Through Trustee and the Subordination Agent,
     respectively, of all the Fundamental Documents to which each such party is
     a party, together with such other documents and evidence with respect to
     United,  the AFE Indenture Trustee, the Pass Through Trustee and the
     Subordination Agent as AFE Trust or its counsel may reasonably request in
     order to establish the consummation of the transactions contemplated by
     this Agreement, the taking of all corporate proceedings in connection
     therewith and compliance with the conditions set forth herein.

          (iii)  A certificate signed by the Secretary or an Assistant Secretary
     of United, the AFE Indenture Trustee, the Pass Through Trustee and the
     Subordination Agent as to the Person or Persons authorized to execute and
     deliver this Agreement and any other Fundamental Document to be executed on
     behalf of such party in connection with the transactions contemplated
     hereby and as to the signature of such Person or Persons.

          (iv)   The representations and warranties of United in Section 5 and
                                                                ---------
     the in Section 6, shall be true and correct in all material respects as of
            ---------
     the Closing Date as though made on and as of such date except to the extent
     that such representations and warranties relate solely to an earlier date
     (in which event such representations and warranties shall have been true
     and correct in all material respects on and as of such earlier date).

          (v)    AFE Trust shall have received the opinions set forth in
     Sections 3(a)(vii)-3(a)(xiv) (except receipt by AFE Trust of the opinions
     -------- --------- ---------
     set forth in Section 3(a)(vii) shall not be a condition precedent to its
                  -----------------
     obligations hereunder), in each case addressed to AFE Trust and dated the

     Closing Date and otherwise in form and substance satisfactory to AFE Trust.

          (vi)   AFE Trust shall have received a copy of the reports required to
     be delivered pursuant to Section 3(a)(xvi).
                              -----------------

          (vii)  The conditions precedent to the transactions specified in the
     Underwriting Agreement shall have been satisfied (or waived) in accordance
     with the terms thereof.

          (viii) No change shall have occurred after the date of the execution
     and delivery of this Agreement in applicable law or regulations thereunder
     or interpretations thereof by appropriate regulatory authorities which, in
     the opinion of AFE Trust, would make it a

                                       9
<PAGE>

     violation of law or regulations for AFE Trust to enter into any transaction
     contemplated by the Fundamental Documents.

     (c) Conditions Precedent to the Obligations of United.  The obligations of
         -------------------------------------------------
United to participate in the transactions contemplated hereby and to enter into
the Fundamental Documents to which United is a party are all subject to the
fulfillment to the satisfaction of or waiver by United, on or prior to the
Closing Date, of the following conditions precedent:

          (i)   Those documents described in Section 3(a)(iii) shall have been
                                             -----------------
     duly authorized, executed and delivered by the respective party or parties
     thereto (other than United) in the manner specified in Section 3(a)(iii),
                                                            -----------------
     shall each be satisfactory in form and substance to United, shall be in
     full force and effect on the Closing Date, and an executed counterpart of
     each thereof (other than the AFE Notes) shall have been delivered to United
     or counsel for United.

          (ii)  United shall have received a copy of the organizational
     documents, by-laws and general authorizing resolutions of the boards of
     directors (or executive committees) or other satisfactory evidence of
     authorization of   the AFE Indenture Trustee, the Pass Through Trustee and
     the Subordination Agent, certified as of the Closing Date by the Secretary
     or an Assistant Secretary of each such party, respectively, that authorize
     the execution, delivery and performance by the AFE Indenture Trustee, the
     Pass Through Trustee and the Subordination Agent, respectively, of all the
     Fundamental Documents to which each such party is a party, together with
     such other documents and evidence with respect to the AFE Indenture
     Trustee, the Pass Through Trustee and the Subordination Agent as AFE Trust,
     United or its counsel may reasonably request in order to establish the
     consummation of the transactions contemplated by this Agreement, the taking
     of all corporate proceedings in connection therewith and compliance with
     the conditions set forth herein.

          (iii) A certificate signed by the Secretary or an Assistant Secretary
     of the AFE Indenture Trustee, the Pass Through Trustee and the
     Subordination Agent as to the Person or Persons authorized to execute and
     deliver this Agreement and any other Fundamental Document to be executed on
     behalf of such party in connection with the transactions contemplated
     hereby and as to the signature of such Person or Persons.

          (iv)  The representations and warranties of the AFE Indenture
     Trustee, the Pass Through Trustee and the Subordination Agent contained in
     Section 6, shall be true and correct in all material respects as of the
     ---------
     Closing Date as though made on and as of such date except to the extent
     that such representations and warranties relate solely to an earlier date
     (in which event such representations and warranties shall have been true
     and correct in all material respects on and as of such earlier date).

          (v)   United shall have received the opinions set forth in Sections
                                                                     --------
     3(a)(vii)-3(a)(xiv) (except receipt by United of the opinions set forth in
     --------- ---------
     Sections 3(a)(vii), 3(a)(xii),
     ------------------  ---------
                                       10
<PAGE>

     and 3(a)(xiv) shall not be a condition precedent to its obligations
         --------
     hereunder), in each case addressed to United and dated the Closing Date and
     otherwise in form and substance satisfactory to United.

          (vi)   United shall have received a copy of the reports required to be
     delivered pursuant to Section 3(a)(xvi).
                           -----------------

          (vii)  The conditions precedent to the transactions specified in the
     Underwriting Agreement shall have been satisfied (or waived) in accordance
     with the terms thereof.

          (viii) No change shall have occurred after the date of the execution
     and delivery of this Agreement in applicable law or regulations thereunder
     or interpretations thereof by appropriate regulatory authorities which, in
     the opinion of  United, would make it a violation of law or regulations for
     United to enter into any transaction contemplated by the Fundamental
     Documents.

          SECTION 4.  Representations, Warranties and Covenants of AFE Trust.
                      ------------------------------------------------------
AFE Trust represents, warrants and covenants to the Pass Through Trustee, United
and the AFE Indenture Trustee that:

          (a)  AFE Trust is a Delaware business trust duly formed, validly
existing and in good standing under the laws of the State of Delaware; is duly
qualified to conduct business and is in good standing in each other jurisdiction
where the conduct of its business requires such qualification; has the requisite
power and authority as a Delaware business trust and the legal right to acquire,
assign, grant, transfer, pledge, mortgage and convey Trust Property, issue AFE
Notes pursuant to the AFE Indenture, issue the AFE Trust Certificates pursuant
to the AFE Trust Agreement and to conduct its business as now, heretofore and
proposed to be conducted; has its chief executive office (as such term is
defined in Article 9 of the Uniform Commercial Code) in Wilmington, Delaware;
has all licenses, permits, consents or approvals from or by, and has made all
filings with, and has given all notices to, all governmental authorities having
jurisdiction, to the extent required for such conduct and is in compliance with
the AFE Trust Agreement.

          (b)  The execution, delivery and performance by AFE Trust of this
Agreement, the AFE Notes issued under the AFE Indenture and the other
Fundamental Documents to which it is a party are within its power as a Delaware
business trust; have been duly authorized by all necessary or proper action; do
not contravene any provision of the AFE Trust Agreement or its other
organizational documents; do not violate any law or regulation, or any order or
decree of any court or any federal, state or local authority or agency,
governing the banking and trust powers of Wilmington Trust Company in its
capacity as trustee in connection with the AFE Trust Agreement; do not conflict
with or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, its
Certificate of Trust, or any indenture, mortgage, deed of trust, chattel
mortgage, conditional sales contract, bank loan or credit agreement, or other
agreement or  instrument to which it is a party or by which it or any of its
property is bound; and do not require the consent or approval of, the giving of
notice to, the registration with, or the

                                       11
<PAGE>

taking of any other action in respect of any federal, state, local or foreign
government authority or agency, except for (A) any required qualifications of
each Pass Through Trust Agreement under the Trust Indenture Act of 1939, as
amended, pursuant to an order of the Securities and Exchange Commission, (B) the
filings referred to in Section 3(a)(iv), and (C) any normal periodic and other
                       ----------------
reporting requirements under the applicable rules and regulations of the Federal
Aviation Administration ("FAA") to the extent required to be given or obtained
                          ---
after the Closing Date.

          (c) The execution, delivery and performance by AFE Trust of this
Agreement, the AFE Notes issued under the AFE Indenture and each other
Fundamental Document to which it is a party will not result in the creation of
any Lien (other than Permitted Liens (as defined in the AFE Indenture)) upon the
property of AFE Trust under, its Certificate of Trust or any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement or other agreement or instrument to which AFE Trust is a
party or by which it or its properties may be bound or affected which
contravention, default or Lien, individually or in the aggregate, would be
reasonably likely to have a material adverse effect on the ability of AFE Trust
to perform its obligations under the Fundamental Documents to which it is a
party.

          (d) There are no pending or threatened actions or proceedings against
AFE Trust before any court or administrative agency which, if determined
adversely to it, would have a material adverse effect on the ability of AFE
Trust to perform its obligations under this Agreement or any other Fundamental
Document executed by AFE Trust in connection with the transactions contemplated
by the Fundamental Documents.

          (e) This Agreement, the AFE Notes issued under the AFE Indenture and
each other Fundamental Document to which AFE Trust is a party have been duly
executed and delivered by AFE Trust and constitute legal, valid and binding
obligations of AFE Trust enforceable against AFE Trust in accordance with the
terms thereof, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether considered in a
proceeding at law or in equity.

          (f) There has not occurred any event that constitutes an AFE Indenture
Default under the AFE Indenture that is presently continuing and there has not
occurred any event that constitutes or would, with the passage of time or the
giving of notice, or both, constitute an Event of Default (as defined in the AFE
Indenture) under the AFE Indenture.

          (g) Neither United nor anyone acting on behalf of United has offered
any interest in any Pass Through Certificate and any AFE Trust Certificate or
any AFE Note in a manner that would violate the Securities Act of 1933, as
amended, the regulations thereunder, administrative and judicial interpretation
thereof or the securities laws, rules or regulations of any state.

          (h) None of the proceeds from the sale of the AFE Notes will be used
directly or indirectly by AFE Trust to purchase or carry any "margin stock" as
such term is defined in Regulation G or U of the Board of Governors of the
Federal Reserve System.

                                       12
<PAGE>

          (i) AFE Trust agrees to give each AFE Indenture Trustee and the Pass
Through Trustee at least 30 days' prior written notice of any relocation of its
chief executive office from its present location.

          (j) There are no Taxes payable by AFE Trust imposed by the Sate of
Delaware or any political subdivision or taxing authority thereof in connection
with the execution, delivery and performance by AFE Trust of this Agreement or
any other Fundamental Document to which AFE Trust is a party (other than
franchise or other taxes based on or measured by any fees or compensation
received by the AFE Indenture Trustee for services rendered in connection with
the transactions contemplated by the AFE Trust Agreement and AFE Indenture, and
there are no Taxes payable by  AFE Trust imposed by the State of Delaware or any
political subdivision thereof in connection with the acquisition, possession or
ownership by AFE Trust of any of the AFE Notes (other than franchise or other
taxes based on or measured by any fees or compensation received by the AFE
Indenture Trustee for services rendered in connection with the transactions
contemplated by the AFE Trust Agreement and the AFE Indenture).

          (k) Except for the issue and sale of the AFE Notes contemplated
hereby, AFE Trust has not directly or indirectly offered any AFE Notes for sale
to any Person or solicited any offer to acquire any AFE Notes from any Person,
nor has AFE Trust authorized anyone to act on its behalf to offer directly or
indirectly any AFE Note for sale to any Person, or to solicit any offer to
acquire any AFE Notes from any Person; and AFE Trust is not in default under the
AFE Trust Agreement or the AFE Indenture, and

          (l) AFE Trust is not directly or indirectly controlling, controlled by
or under common control with the Pass Through Trustee or the Subordination
Agent.

          SECTION 5.   Representations, Warranties and Covenants of United.
                       ---------------------------------------------------
United represents, warrants, and covenants to the Pass Through Trustee and the
AFE Indenture Trustee that:

          (a) United is a corporation duly organized and validly existing in
good standing pursuant to the laws of the State of Delaware; is an "air carrier"
within the meaning of 49 U.S.C. 40102(a)(15); holds a certificate of public
convenience and necessity in accordance with 49 U.S.C. Section 41102, and an air
carrier operating certificate issued by the Secretary of Transportation pursuant
to Chapter 447 of Title 49 of United States Code for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo, is a "citizen
of the United States" as defined in 49 U.S.C. Section 40102; has its chief
executive office (as such term is defined in Article 9 of the Uniform Commercial
Code) in Elk Grove Township, Illinois; is duly qualified to do business as a
foreign corporation in each jurisdiction in which its operations or the nature
of its business requires, except where the failure to be so qualified would not
have a material adverse effect on the ability of United to perform its
obligations under the Fundamental Documents to which it is a party; holds all
material licenses, certificates, permits and franchises from the appropriate
agencies of the United States of America and/or all other governmental
authorities having jurisdiction, necessary to

                                       13
<PAGE>

authorize United to engage in air transport and to carry on scheduled passenger
service, in each case as presently conducted; and has, or had on the respective
dates of execution thereof, the corporate power and authority to conduct its
business as it is presently being conducted, and to enter into and perform its
obligations under this Agreement and each other Fundamental Document to which it
is a party.

          (b) The execution, delivery and performance by United of this
Agreement and each other Fundamental Document to which it is a party, including
any transfer of the Lease Notes by United or its affiliates to AFE Trust, have
been duly authorized by all necessary corporate action on the part of United, do
not require any stockholder approval or approval or consent of any trustee or
holders of any indebtedness or obligations of United, except such as have been
duly obtained, and none of the execution, delivery and performance by United of
this Agreement or such Fundamental Documents contravenes any law, judgment,
governmental rule, regulation or order binding on United or the certificate of
incorporation or by-laws of United or contravenes the provisions of, or
constitutes a default under, or results in the creation of any Lien (other than
Permitted Liens (as defined in the AFE Indenture)) upon the property of United
under, its certificate of incorporation or bylaws, or any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which United is a party or by
which it or its properties may be bound or affected which contravention, default
or Lien, individually or in the aggregate, would be reasonably likely to have a
material adverse effect on the ability of United to perform its obligations
under the Fundamental Documents to which it is a party.

          (c) Neither the execution and delivery by United of this Agreement,
the AFE Notes issued under the AFE Indenture or any other Fundamental Document
to which it is a party nor the performance by United of its obligations
hereunder or thereunder require the consent or approval of, the giving of notice
to, or the registration with, or the taking of any other action in respect of
any federal, state, local or foreign government authority or agency, except for
(A) any required qualifications of each Pass Through Trust Agreement under the
Trust Indenture Act of 1939, as amended, pursuant to an order of the Securities
and Exchange Commission, (B) the filings referred to in Section 3(a)(iv), (C)
                                                        ----------------
authorizations, consents, approvals, actions, notices and filings required to be
obtained, taken, given or made, the failure to obtain, take, give or make would
not have a material adverse effect on the financial condition, properties or
results of operations of United, and (D) any normal periodic and other reporting
requirements under the applicable rules and regulations of the Federal Aviation
Administration ("FAA") to the extent required to be given or obtained after the
                 ---
Closing Date.

          (d) This Agreement and each other Fundamental Document to which United
is a party have been duly executed and delivered by United and constitute legal,
valid and binding obligations of United enforceable against United in accordance
with the terms thereof, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.

                                       14
<PAGE>

          (e) To the best of its knowledge, there has not occurred any event
that constitutes an AFE Indenture Default under the AFE Indenture that is
presently continuing.

          (f) Neither United nor anyone acting on behalf of United has offered
any interest in any Pass Through Certificate, any AFE Trust Certificate or any
AFE Note in a manner that would violate the Securities Act of 1933, as amended,
the regulations thereunder, administrative and judicial interpretation thereof
or the securities laws, rules or regulations of any state.

          (g) Neither United nor any subsidiary of United is an "investment
company" or a company "controlled by an investment company" within the meaning
of the Investment Company Act of 1940, as amended.

          (h) Except for the proceedings described in the discussion of Legal
Proceedings in United's Annual Report on Form 10-K for the year ended December
31, 1999 and subsequently filed Form 10-Qs filed prior to the Closing Date,
there are no pending or, to the knowledge of United, threatened actions or
proceedings before any court or administrative agency which individually (or in
the aggregate in the case of any group of related lawsuits) would have a
material adverse effect on the financial condition of United or the ability of
United to perform its obligations hereunder or under any Fundamental Document to
which United is a party.

          (i) United agrees to pay to the Subordination Agent any amounts
required to be paid by the Subordination Agent pursuant to Sections 2.03, 3.01,
3.02, 3.03, 3.09, 7.05 and 7.07 of any Liquidity Facility.

          (j) United agrees to give each AFE Indenture Trustee and the Pass
Through Trustee at least 30 days' prior written notice of any relocation of its
chief executive office from its present location.

          (k) The trustee under each Leveraged Lease Indenture, as a secured
party under such Leveraged Lease Indenture (for the benefit of AFE Trust, as a
holder of Leased Notes, and AFE Indenture Trustee as a holder of a security
interest in the Leased Notes) would be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to the obligations secured by such Leveraged
Lease Indenture with respect to each relevant Aircraft.

          (l) Each Leased Aircraft has been duly certified by the FAA as to type
and airworthiness and such certification remains in full force and effect.

          (m) The Leveraged Lease Indentures have been duly filed for recording
with the FAA pursuant to the Federal Aviation Act.

          (n) With respect to each Lease Aircraft, the Leveraged Lease Documents
to which United is a party have been duly executed and delivered by United and
constitute legal, valid and binding obligations of United enforceable against
United in accordance with the terms thereof,

                                       15
<PAGE>

except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in a
proceeding at law or equity.

          (o) With respect to each Leased Aircraft, there has not occurred any
event that constitutes a Lease Default (as defined in the applicable Leveraged
Lease Documents) or, to the best of its knowledge, an Indenture Default under
any Leveraged Lease Indenture that is presently continuing and there has not
occurred any event that constitutes or would, with the passage of time or the
giving of notice, or both, constitute an Event of Loss (as defined in the
applicable Leverage Lease Documents).

          (p) The Leveraged Lease Documents for each Leased Aircraft and all of
the related documentation delivered to the AFE Indenture Trustee and the Pass
Through Trustee is complete, true and accurate.

          (q) United agrees that after the pending revisions to Article 9 are
adopted in the State of Illinois, but before July 1, 2002, it will file any
Uniform Commercial Code financing statements in Delaware and Illinois covering
all the security interests created by and pursuant to the Granting Clause of the
AFE Indenture necessary to continue the perfection thereof.

          (r) United agrees that it will not permit any Lease to be terminated
unless it has paid the excess, if any, of the Make-Whole Amount, if any, in
respect of the principal amount of the AFE Notes and AFE Trust Certificates
subject to prepayment over the Break Amount, if any, in respect of the Lease
Notes related to such Lease.

          SECTION 6.   Representations, Warranties and Covenants of Other
                       --------------------------------------------------
Parties.  Each of the parties below represents, warrants and covenants to each
-------
of the other parties to this Agreement as follows:

          (a) The AFE Indenture Trustee represents, warrants and covenants that:

              (i) the AFE Indenture Trustee is a national banking association
          duly organized, validly existing and in good standing under the laws
          of the United States of America, is a "citizen of the United States"
          as defined in 49 U.S.C. Section 40102(a)(15) (without making use of a
          voting trust agreement, voting powers agreement or similar
          arrangements) and will resign as AFE Indenture Trustee promptly after
          it obtains actual knowledge that it has ceased to be such a citizen,
          and has, or had on the respective dates of execution thereof, the full
          corporate power, authority and legal right under the laws of the State
          of Connecticut and the United States of America pertaining to its
          banking, trust and fiduciary powers to execute and deliver this
          Agreement and each other Fundamental Document to which it is a party,
          to authenticate the AFE Notes and to carry out its obligations under
          this Agreement and each other Fundamental Document to which it is a
          party;

                                       16
<PAGE>

               (ii)  the execution and delivery by the AFE Indenture Trustee of
          this Agreement and each other Fundamental Document to which it is a
          party, the authentication of the AFE Notes and the performance by the
          AFE Indenture Trustee of its obligations under this Agreement and each
          other Fundamental Document to which it is a party have been duly
          authorized by the AFE Indenture Trustee and will not violate its
          charter or by-laws, the provisions of any indenture, mortgage,
          contract or other agreement to which it is a party or by which it is
          bound or any federal or Connecticut law or regulation relating to the
          banking, trust or fiduciary powers of the AFE Indenture Trustee;

               (iii) this Agreement and each other Fundamental Document to
          which the AFE Indenture Trustee is a party have been duly authorized,
          executed and delivered by the AFE Indenture Trustee; this Agreement
          constitutes, and each Fundamental Document to which the AFE Indenture
          Trustee is a party, when it has been executed and delivered by the AFE
          Indenture Trustee, will constitute, the legal, valid and binding
          obligations of the AFE Indenture Trustee enforceable against it in
          accordance with their respective terms, except as the same may be
          limited by applicable bankruptcy, insolvency, reorganization,
          moratorium or similar laws affecting the rights of creditors generally
          and by general principles of equity, whether considered in a
          proceeding at law or in equity;

               (iv)  no consent, approval, order or authorization of, giving of
          notice to, or registration or filing with, or taking of any other
          action in respect of, any Connecticut state or local governmental
          authority or agency or any United States federal governmental
          authority or agency regulating the banking or trust powers of the AFE
          Indenture Trustee is required for the execution and delivery of, or
          the carrying out by, the AFE Indenture Trustee, of any of the
          transactions contemplated by any of the Fundamental Documents to which
          the AFE Indenture Trustee is or is to be a party, other than any such
          consent, approval, order, authorization, registration, notice or
          action as has been duly obtained, given or taken; and

               (v)   there are no pending or threatened actions or proceedings
          against the AFE Indenture Trustee before any court or administrative
          agency which, if determined adversely to it, would have a material
          adverse effect on the ability of the AFE Indenture Trustee to perform
          its obligations under this Agreement or any other Fundamental Document
          executed by the AFE Indenture Trustee in connection with the
          transactions contemplated by the Fundamental Documents.

          (b)  The Pass Through Trustee represents, warrants and covenants that:

               (i)   the Pass Through Trustee is a national banking association
          duly organized, validly existing and in good standing under the laws
          of the United States

                                       17
<PAGE>

          of America, and has the full corporate power, authority and legal
          right under the laws of the State of Connecticut and the United States
          of America pertaining to its banking, trust and fiduciary powers to
          execute and deliver this Agreement and each other Fundamental Document
          to which it is a party and to perform its obligations hereunder and
          thereunder;

               (ii) this Agreement and each other Fundamental Document to which
          the Pass Through Trustee is a party have been duly authorized,
          executed and delivered by the Pass Through Trustee; this Agreement and
          each other Fundamental Document to which the Pass Through Trustee is a
          party constitute the legal, valid and binding obligations of the Pass
          Through Trustee enforceable against it in accordance with their
          respective terms, except as the same may be limited by applicable
          bankruptcy, insolvency, reorganization, moratorium or similar laws
          affecting the rights of creditors generally and by general principles
          of equity, whether considered in a proceeding at law or in equity;

               (iii) none of the execution, delivery and performance by the Pass
          Through Trustee of this Agreement or any other Fundamental Document to
          which the Pass Through Trustee is a party, the purchase by the Pass
          Through Trustee of the AFE Notes pursuant to this Agreement, or the
          issuance and sale of the Pass Through Certificates pursuant to the
          Pass Through Trust Agreements, and the Underwriting Agreement,
          contravenes any law, rule or regulation of the State of Connecticut or
          any United States governmental authority or agency regulating the Pass
          Through Trustee's banking, trust or fiduciary powers or any judgment
          or order applicable to or binding on the Pass Through Trustee and do
          not contravene or result in any breach of, or constitute a default
          under, the Pass Through Trustee's charter or by-laws or any agreement
          or instrument to which the Pass Through Trustee is a party or by which
          it or any of its properties may be bound;

               (iv) neither the execution and delivery by the Pass Through
          Trustee of this Agreement or any of the other Fundamental Documents to
          which the Pass Through Trustee is a party, nor the consummation by the
          Pass Through Trustee of any of the transactions contemplated hereby or
          thereby, requires the consent or approval of, the giving of notice to,
          the registration with, or the taking of any other action with respect
          to, any Connecticut governmental authority or agency or any Federal
          governmental authority or agency regulating the Pass Through Trustee's
          banking, trust or fiduciary powers;

               (v) there are no Taxes payable by the Pass Through Trustee
          imposed by the State of Connecticut or any political subdivision or
          taxing authority thereof in connection with the execution, delivery
          and performance by the Pass Through Trustee of this Agreement or any
          other Fundamental Document to which the Pass Through Trustee is a
          party (other than franchise or other taxes based on or measured

                                       18
<PAGE>

          by any fees or compensation received by the Pass Through Trustee for
          services rendered in connection with the transactions contemplated by
          the Pass Through Trust Agreements), and there are no Taxes payable by
          the Pass Through Trustee imposed by the State of Connecticut or any
          political subdivision thereof in connection with the acquisition,
          possession or ownership by the Pass Through Trustee of any of the AFE
          Notes (other than franchise or other taxes based on or measured by any
          fees or compensation received by the Pass Through Trustee for services
          rendered in connection with the transactions contemplated by the Pass
          Through Trust Agreements);

               (vi)   there are no pending or threatened actions or proceedings
          against the Pass Through Trustee before any court or administrative
          agency which individually or in the aggregate, if determined adversely
          to it, would have a material adverse effect on the ability of the Pass
          Through Trustee to perform its obligations under this Agreement or any
          other Fundamental Document to which the Pass Through Trustee is a
          party;

               (vii)  except for the issue and sale of the AFE Notes
          contemplated hereby, the Pass Through Trustee has not directly or
          indirectly offered any AFE Notes for sale to any Person or solicited
          any offer to acquire any AFE Notes from any Person, nor has the Pass
          Through Trustee authorized anyone to act on its behalf to offer
          directly or indirectly any AFE Note for sale to any Person, or to
          solicit any offer to acquire any AFE Note from any Person; and the
          Pass Through Trustee is not in default under any Pass Through Trust
          Agreement; and

               (viii) the Pass Through Trustee is not directly or indirectly
          controlling, controlled by or under common control with AFE Trust.

          (c)  The Subordination Agent represents, warrants and covenants that:

               (i)    the Subordination Agent is a national banking association
          duly organized, validly existing and in good standing under the laws
          of the United States of America, and has the full corporate power,
          authority and legal right under the laws of the State of Connecticut
          and the United States of America pertaining to its banking, trust and
          fiduciary powers to execute and deliver this Agreement and each other
          Fundamental Document to which it is a party and to perform its
          obligations hereunder and thereunder;

               (ii)   this Agreement and each other Fundamental Document to
          which it is a party have been duly authorized, executed and delivered
          by the Subordination Agent; this Agreement and each other Fundamental
          Document to which it is a party constitute the legal, valid and
          binding obligations of the Subordination Agent enforceable against it
          in accordance with their respective terms, except as the same

                                       19
<PAGE>

          may be limited by applicable bankruptcy, insolvency, reorganization,
          moratorium or similar laws affecting the rights of creditors generally
          and by general principles of equity, whether considered in a
          proceeding at law or in equity;

               (iii)  none of the execution, delivery and performance by the
          Subordination Agent of this Agreement or any other Fundamental
          Document to which the Subordination Agent is a party contravene any
          law, rule or regulation of the State of Connecticut or any United
          States governmental authority or agency regulating the Subordination
          Agent's banking, trust or fiduciary powers or any judgment or order
          applicable to or binding on the Subordination Agent and does not
          contravene or result in any breach of, or constitute a default under,
          the Subordination Agent's charter or by-laws or any agreement or
          instrument to which the Subordination Agent is a party or by which it
          or any of its properties may be bound;

               (iv)   neither the execution and delivery by the Subordination
          Agent of this Agreement or any other Fundamental Document to which the
          Subordination Agent is a party nor the consummation by the
          Subordination Agent of any of the transactions contemplated hereby or
          thereby requires the consent or approval of, the giving of notice to,
          the registration with, or the taking of any other action with respect
          to, any Connecticut governmental authority or agency or any federal
          governmental authority or agency regulating the Subordination Agent's
          banking, trust or fiduciary powers;

               (v)   there are no Taxes payable by the Subordination Agent
          imposed by the State of Connecticut or any political subdivision or
          taxing authority thereof in connection with the execution, delivery
          and performance by the Subordination Agent of this Agreement or any
          other Fundamental Document to which the Subordination Agent is a party
          (other than franchise or other taxes based on or measured by any fees
          or compensation received by the Subordination Agent for services
          rendered in connection with the transactions contemplated by the
          Intercreditor Agreement or any Liquidity Facility), and there are no
          Taxes payable by the Subordination Agent imposed by the State of
          Connecticut or any political subdivision thereof in connection with
          the acquisition, possession or ownership by the Subordination Agent of
          any of the AFE Notes (other than franchise or other taxes based on or
          measured by any fees or compensation received by the Subordination
          Agent for services rendered in connection with the transactions
          contemplated by the Intercreditor Agreement or any Liquidity
          Facility);

               (vi)   there are no pending or threatened actions or proceedings
          against the Subordination Agent before any court or administrative
          agency which individually or in the aggregate, if determined adversely
          to it, would materially adversely affect the ability of the
          Subordination Agent to perform its obligations under this

                                       20
<PAGE>

          Agreement or any other Fundamental Document to which the Subordination
          Agent is a party;

               (vii)  the Subordination Agent has not directly or indirectly
          offered any AFE Notes for sale to any Person or solicited any offer to
          acquire any AFE Notes from any Person, nor has the Subordination Agent
          authorized anyone to act on its behalf to offer directly or indirectly
          any AFE Note for sale to any Person, or to solicit any offer to
          acquire any AFE Note from any Person; and the Subordination Agent is
          not in default under any Liquidity Facility; and

               (viii) the Subordination Agent is not directly or indirectly
          controlling, controlled by or under common control with AFE Trust.

          SECTION 7.  Indemnification by United. United hereby agrees to
                      -------------------------
indemnify the AFE Trust, the AFE Trustee, the Pass Through Trustee, the
Subordination Agent, the AFE Indenture Trustee and the AFE Investors, and, in
each case, each of their respective affiliates, successors and permitted assigns
and each of their respective directors, officers, employees, agents and servants
(collectively, the "Indemnitees") against, and agrees to protect, save and keep
                    -----------
harmless and shall pay on demand each of them from (whether or not the
transactions contemplated herein or in any of the other Operative Documents or
the Pass Through Trust Agreements are consummated), any and all Expenses imposed
on, incurred by or asserted against any Indemnitee, in any way relating to or
arising out of (A) this Agreement, the AFE Trust Certificates issued under the
AFE Trust Agreement, the AFE Notes issued under the AFE Indenture, the
Fundamental Documents, and each Pass Through Trust Agreement (and any amendments
thereto), or the enforcement of any of the terms of any thereof, or (B) the
manufacture, design, purchase, resale, acceptance or rejection of the Airframe
or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any
Engine whether or not installed on the Airframe or any airframe on which an
Engine is installed whether or not arising out of the finance, refinance,
ownership, delivery, nondelivery, storage, lease, possession, use, non-use,
operation, maintenance, modification, alteration, condition, sale, replacement,
substitution, disposition, registration, reregistration or airworthiness of the
Aircraft (or any portion thereof) including, without limitation, latent or other
defects, whether or not discoverable, strict tort liability and any damage to
property or the environment, death or injury to any person and any claim for
patent, trademark or copyright infringement; (D) the offer, sale, holding,
transfer or delivery of the AFE Notes, the AFE Trust Certificates or the Pass
Through Certificates, whether before, on or after the applicable issuance date
(the indemnity in this clause (D) to extend also to any person who controls an
Indemnitee, its successors, assigns, employees, directors, officers, servants
and agents within the meaning of Section 15 of the Securities Act of 1933, as
amended); (E) fees incurred by AFE Trust in connection with the AFE Notes issued
under the AFE Indenture, the AFE Trust Certificates issued under the AFE Trust
Agreement, and the Fundamental Documents, and Wilmington Trust Company in its
capacity as trustee in connection with the AFE Trust Agreement; (F) any
shortfall that may result if the Make-Whole Amount, if any, with respect to the
AFE Notes and the AFE Trust Certificates exceeds the Break Amount, if any, with
respect to the Lease Notes; (G) any pre-existing claims or liabilities under the
Leveraged Lease Documents to the extent United

                                       21
<PAGE>

is required to indemnify therefor under the Leveraged Lease Documents; and (H)
amounts equal to (i) the fees payable to the relevant Liquidity Provider under
the related Fee Letter; (ii) all compensation and reimbursement of expenses,
disbursements and advances payable to the Pass Through Trustee under the Pass
Through Trust Agreements, except with respect to any income or franchise taxes
incurred by the Pass Through Trustee in connection with the Pass Through Trust
Agreements or; (iii) 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; and (iv) all compensation and reimbursement of
expenses, disbursements and advances payable to AFE Trust or AFE Trustee under
the AFE Trust Agreement; provided, with respect to an Indemnitee, that the
foregoing indemnity shall not extend to any Expense to the extent resulting from
or arising out of one or more of the following:

          (1)  any representation or warranty by such Indemnitee or any Related
     Indemnitee (as defined below) thereof in the Operative Documents or in any
     other Fundamental Document being incorrect; or

          (2)  the failure by such Indemnitee or any Related Indemnitee thereof
     to perform or observe any agreement, covenant or condition in any of the
     Fundamental Documents; or

          (3)  the willful misconduct or the gross negligence of such Indemnitee
     or any Related Indemnitee thereof (other than gross negligence imputed to
     such Indemnitee or any Related Indemnitee thereof solely by reason of its
     interest in the Aircraft); or

          (4)  a disposition (voluntary or involuntary) by such Indemnitee of
     all or any part of its interest in the Fundamental Documents, other than
     during the continuance of an AFE Indenture Event of Default (as defined in
     the AFE Indenture) or in connection with the exercise of remedies under any
     Fundamental Documents; or

          (5)  any Tax; provided, however, this Section 7 shall not apply to
                        --------                ---------
     Taxes taken into consideration in making any payments on an after-tax
      basis; or

          (6)  in the case of the AFE Indenture Trustee in its individual
     capacity, any Expense to the extent attributable to the failure of the AFE
     Indenture Trustee to distribute funds received and distributable by it in
     accordance with the AFE Indenture, (B) in the case of the Subordination
     Agent in its individual capacity, any Expense to the extent attributable to
     the failure of the Subordination Agent to distribute funds received and
     distributable by it in accordance with the Intercreditor Agreement, or (C)
     in the case of any Pass Through Trustee in its individual capacity, any
     Expense to the extent attributable to the failure of such Pass Through
     Trustee to distribute funds received and distributable by it in accordance
     with the Pass Through Trust Agreement to which it is a party or, (D) in
     case of AFE Trust, any expense to the extent attributable to the failure of
     AFE Trust to distribute funds received and distributable by it in
     accordance with the Confirmations and the AFE Indenture; or

                                       22
<PAGE>

          (7)  the authorization or giving or withholding of any future
     amendments, supplements, waivers or consents by such Indemnitee or any
     Related Indemnitee thereof with respect to any of the Fundamental Documents
     unless such amendments, supplements, waivers or consents are requested by
     United or are required pursuant to the terms of the Fundamental Documents
     (unless the same results from the actions of such Indemnitee or Related
     Indemnitee), or

          (8)  except to the extent attributable to acts or events occurring on
     or prior thereto, acts or events which occur after the termination of the
     AFE Indenture in accordance with Section 10.01 thereof; or

          (9)  any Expense to the extent attributable to the offer or sale by
     such Indemnitee or any Related Indemnitee of any interest in the Aircraft,
     any Lease Note, any AFE Note, any AFE Trust Certificate, any Pass Through
     Certificate or any similar interest in violation of the Securities Act,
     other applicable federal, state or foreign securities laws or any other law
     on or prior to the applicable issuance date thereof; or

          (10) any Expense or other amount which such Indemnitee expressly
     agrees to pay or such Indemnitee expressly agrees shall not be paid by or
     be reimbursed by United; or

          (11) any Expense that is an ordinary and usual operating or overhead
     expense; or

          (12) any Expense resulting from any Lien on the Aircraft which such
     Indemnitee or any of its Related Indemnitees is required to discharge under
     the Operative Documents; or

          (13) activities or transactions of such Indemnitee not arising out of
     or resulting form, or attributable to the transactions contemplated by the
     Operative Documents; or

          (14) any Expense incurred by or asserted against such Indemnitee or
     any Related Indemnitee as a result of any "prohibited transaction" within
     the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code.

          For purposes of this Section 7, a Person shall be considered a
                               ---------
"Related Indemnitee" with respect to an Indemnitee if such Person is a director,
officer, employee, agent, servant or Affiliate thereof or, if such Indemnitee is
a Pass Through Trustee, the Subordination Agent or the AFE Indenture Trustee or
a director, officer, employee, agent, servant or Affiliate of any thereof, a
Person shall be considered a "Related Indemnitee" with respect to any such
Person if such Person is a Pass Through Trustee, the Subordination Agent or the
AFE Indenture Trustee or a director, officer, employee, agent, servant or
Affiliate of any thereof.

                                       23
<PAGE>

          Notwithstanding clause (5) above, United further agrees that any
                          ----------
payment or indemnity pursuant to this Section 7 in respect of any "Expenses"
                                      ---------
shall be in an amount which, after deduction of all Taxes required to be paid by
such recipient with respect to such payment or indemnity under the laws of any
federal, state or local government or taxing authority in the United States, or
under the laws of any taxing authority or governmental subdivision of a foreign
country, or any territory or possession of the United States or any
international authority, shall be equal to the excess, if any, of (A) the amount
of such Expense over (B) the current net reduction in Taxes actually realized by
such recipient resulting from the accrual or payment of such Expense.

          Nothing in this Section 7 shall be construed as a guaranty by United
                          ---------
of payments due pursuant to the AFE Notes, the AFE Trust Certificates or Pass
Through Certificates or of the residual value of the Aircraft.

          If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly
after receiving such notice give notice of such claim to United; provided that
the failure to provide such notice shall not release United from any of its
obligations to indemnify hereunder except to the extent that such failure
results in an additional Expense to United (in which case United shall not be
responsible for such additional Expense) or United is prejudiced in the conduct
of or precluded from conducting a meritorious contest of such claim; provided
further that no payment by United to an Indemnitee pursuant to this Section 7
                                                                    ---------
shall be deemed to constitute a waiver or release of any right or remedy which
United may have against such Indemnitee for any actual damages as a result of
the failure by such Indemnitee to give United such notice.  United shall be
entitled, at its sole cost and expense, acting through counsel reasonably
acceptable to the respective Indemnitee, (A) in any judicial or administrative
proceeding that involves solely a claim for one or more Expenses, to assume
responsibility for and control thereof, (B) in any judicial or administrative
proceeding involving a claim for one or more Expenses and other claims related
or unrelated to the transactions contemplated by the Operative Documents, to
assume responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such Indemnitee
shall use reasonable efforts to obtain such severance), and (C) in any other
case, to be consulted by such Indemnitee with respect to judicial proceedings
subject to the control of such Indemnitee and to be allowed, at United's sole
expense, to participate therein.  Notwithstanding any of the foregoing to the
contrary, United shall not be entitled to assume responsibility for and control
of any such judicial or administrative proceedings if such proceedings could, in
the reasonable judgment of the Indemnitee, entail any risk of criminal
liability.  The Indemnitee may participate at its own expense and with its own
counsel in any judicial proceeding controlled by United pursuant to the
preceding provisions; provided, that such Indemnitee's participation does not,
                      --------
in the reasonable opinion of the independent counsel appointed by United or its
insurers to conduct such proceedings, interfere with the defense of such case.

          The Indemnitee shall supply United, at United's expense, with such
information reasonably requested by United as is necessary or advisable for
United to control or participate in any proceeding to the extent permitted by
this Section 7.  In no event shall any Indemnitee enter into
     ---------

                                       24
<PAGE>

a settlement or other compromise with respect to any Expense (i) unless (x) the
Indemnitee has given United at least 30 days' prior written notice of the nature
and scope of the proposed settlement or compromise and (y) such Indemnitee has
received United's prior written consent, which consent shall not be unreasonably
withheld or delayed, or (ii) unless such Indemnitee waives its right to be
indemnified with respect to such Expense under this Section 7.
                                                    ---------

          When United or the insurers under a policy of insurance maintained by
United undertakes the defense of an Indemnitee with respect to an Expense, no
additional legal fees or expenses of such Indemnitee in connection with the
defense of such Indemnitee shall be indemnified hereunder unless such fees or
expenses were incurred at the written request of United or such insurers,
provided that no such defense shall be compromised or settled on a basis that
admits any gross negligence or willful misconduct on the part of such Indemnitee
without such Indemnitee's prior consent.

          In the case of any Expense indemnified by United hereunder which is
covered by a policy of insurance maintained by United, it shall be a condition
of such indemnity with respect to any particular Indemnitee that such Indemnitee
shall cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be required to retain the
benefits of such insurance with respect to such Expense. Notwithstanding any of
the foregoing to the contrary, with respect to any Expense which is covered
under policies of insurance maintained by United, the rights of an Indemnitee to
control or participate in any proceeding shall be modified to the extent
necessary to comply with the requirements of such policies and the rights of the
insurers thereunder.

          United shall supply the Indemnitee with such information reasonably
requested by the Indemnitee as is necessary or advisable for the Indemnitee to
control or participate in any proceeding to the extent permitted by this
Section 7.
---------

          Upon payment of any Expense pursuant to this Section 7, United,
                                                       ---------
without any further action, shall be subrogated to any claims the Indemnitee may
have relating thereto. The Indemnitee agrees to give such further assurances or
agreements and to cooperate with United to permit United to pursue such claims,
if any, to the extent reasonably requested by United.

          In the event that United shall have paid an amount to an Indemnitee
pursuant to this Section 7, and such Indemnitee subsequently shall be reimbursed
in respect of such indemnified amount from any other person, such Indemnitee
shall promptly pay United an amount equal to the sum of (1) the amount of such
reimbursement, including interest received attributable thereto, net of taxes
required to be paid by such Indemnitee as a result of any reimbursement
including interest received attributable thereto and (2) any tax benefit
realized by such Indemnitee as a result of any payment to United hereunder;
provided, however, that (x) such amount attributable to (1) above shall not be
in excess of the amount of such Expense payment made by United plus interest
received attributable thereto and (y) any amount which is payable to United by
any Person pursuant to this

                                       25
<PAGE>

Section 7 shall not be paid to United if any payment is due and owing by United
---------
to such Person hereunder or under any other Operative Document.

          United's obligations under the indemnities provided for in this
Agreement shall be those of a primary obligor, whether or not the Person
indemnified shall also be indemnified with respect to the same matter under the
terms of any other document or instrument, and the Person seeking
indemnification from United pursuant to any provision of this Agreement may
proceed directly against United without first seeking to enforce any other right
of indemnification.

          SECTION 8.  Limited Liability.  It is expressly understood and
                      -----------------
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as
trustee of AFE Trust, in the exercise of the powers and authority conferred and
vested in it under the AFE Trust Agreement, (b) each of the representations,
undertakings and agreements herein made on the part of the AFE Trust is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose of binding
only the AFE Trust and (c) under no circumstances shall Wilmington Trust Company
be personally liable for the payment of any indebtedness or expenses of AFE
Trust or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by AFE Trust under this Agreement or the
other related agreements.

          SECTION 9.  Notices.  Unless otherwise specifically provided herein,
                      -------
all notices required or permitted by the terms of this Agreement shall be in
English and in writing, and any such notice shall become effective five days
after being deposited in the United States mail, with proper postage for first-
class registered or certified mail prepaid, or when delivered personally or, if
promptly confirmed by mail as provided above, when dispatched by facsimile or
other written telecommunication, addressed, if to AFE Trust, United, the Pass
Through Trustee, the Subordination Agent or the AFE Indenture Trustee, at their
respective addresses or facsimile numbers set forth on Schedule 1.
                                                       ----------

          SECTION 10. Expenses.  All of the reasonable out-of-pocket costs, fees
                      --------
and expenses incurred by the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider, AFE Trust, AFE Trustee and the AFE Indenture Trustee in
connection with the transactions contemplated by this Agreement shall be paid on
or prior to the Closing Date by United.

          SECTION 11. Withholding.  United shall advise the AFE Indenture
                      ------------
Trustee and the relevant Noteholder in writing if it believes that interest on
its AFE Notes is subject to United States withholding tax.  The AFE Indenture
Trustee shall, if required, withhold as provided in Section 2.10 of the AFE
Indenture.

          SECTION 12. Miscellaneous.  (a) Provided that the transactions
                      -------------
contemplated hereby have been consummated, and except as otherwise provided for
herein, the representations, warranties and agreements herein of AFE Trust,
United, the AFE Indenture Trustee, the Subordination Agent and the Pass Through
Trustee, and AFE Trust's, United's, the AFE Indenture Trustee's, the
Subordination Agent's and the Pass Through Trustee's obligations hereunder,

                                       26
<PAGE>

shall survive the expiration or other termination of this Agreement and the
other agreements referred to herein.

          (b)  This Agreement may be executed in any number of counterparts and
each counterpart of this Agreement, including a signature page executed by each
of the parties hereto, shall be an original counterpart of this Agreement, but
all of such counterparts together shall constitute one instrument. Neither this
Agreement nor any of the terms hereof may be terminated, amended or waived
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment or waiver is sought; and no such
termination, amendment or waiver shall be effective unless a signed copy thereof
shall have been delivered to the AFE Indenture Trustee. The table of contents
preceding this Agreement and the headings of the various Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof. The terms of this
Agreement shall be binding upon, and shall inure to the benefit of, AFE Trust
and its successors and permitted assigns, United and its successors and
permitted assigns, the Pass Through Trustee and its successors as Pass Through
Trustee (and any additional trustee properly appointed) under any of the Trust
Supplements, the AFE Indenture Trustee and its successors as AFE Indenture
Trustee (and any additional AFE Indenture Trustee properly appointed) under the
AFE Indenture and the Subordination Agent and its successors as Subordination
Agent under the Intercreditor Agreement.

          (c)  This Agreement is not intended to, and shall not, provide any
Person not a party hereto with any rights of any nature whatsoever against any
of the parties hereto, and no Person not a party hereto shall have any right,
power or privilege in respect of, or have any benefit or interest arising out
of, this Agreement; provided, however, that each of the parties hereto agrees
                    --------  -------
and acknowledges that the Liquidity Provider shall be a third party beneficiary
of each of the representations and warranties made herein by such party, and
that the Liquidity Provider may rely on such representations and warranties to
the same extent as if such representations and warranties were made to the
Liquidity Provider directly and that Section 7 inures to the benefit of AFE
                                     ----------
Trustee and the AFE Investors.  The terms of this Agreement shall inure to the
benefit of the Liquidity Provider, its successors and permitted assigns.

          (d)  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW)), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (e)  Each of the parties hereto hereby irrevocably and
          unconditionally:

               (i) submits for itself and its property in any legal action or
          proceeding relating to this Agreement or any other Fundamental
          Document, or for recognition and enforcement of any judgment in
          respect hereof or thereof, to the non-exclusive

                                       27
<PAGE>

          general jurisdiction of the courts of the State of New York, the
          courts of the United States of America for the Southern District of
          New York, and the appellate courts from any thereof;

               (ii)   consents that any such action or proceeding may be brought
          in such courts, and waives any objection that it may now or hereafter
          have to the venue of any such action or proceeding in any such court
          or that such action or proceeding was brought in an inconvenient court
          and agrees not to plead or claim the same;

               (iii)  agrees that service of process in any such action or
          proceeding may be effected by mailing a copy thereof by registered or
          certified mail (or any substantially similar form and mail), postage
          prepaid, to each party hereto at its address set forth in Schedule I,
                                                                    ----------
          or at such other address of which the other Person shall have been
          notified pursuant thereto; and

               (iv)   agrees that nothing herein shall affect the right to
          effect service of process in any other manner permitted by law or
          shall limit the right to sue in any other jurisdiction.

          (f)  EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims.  Each of the parties warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel.  THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

          SECTION 12.  No Petition.  United hereby covenants and agrees that it
                       -----------
will not at any time institute against the Lease Notes Seller, or join in any
institution against the Lease Notes Seller of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the AFE Trust Certificates, the AFE Notes, this
Agreement or any of the Indenture Documents (as defined in the AFE Indenture).

                            [signature pages follow]

                                       28
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.

                              UNITED AIR LINES, INC.

                              By:___________________________
                                  Name:
                                  Title:

                                      S-1
<PAGE>

                         STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                         NATIONAL ASSOCIATION, not in its individual capacity,
                         except as otherwise provided herein, but solely as Pass
                         Through Trustee, Subordination Agent, and AFE Indenture
                         Trustee

                         By: ___________________________________
                             Name:
                             Title:

                                      S-2
<PAGE>

                         AFE TRUST
                         By:  WILMINGTON TRUST COMPANY,
                         not in its individual capacity, but solely as AFE
                         Trustee

                         By: ____________________________________
                             Name:
                             Title:

                                      S-3
<PAGE>

                                 SCHEDULE I to
                          AFE Note Purchase Agreement

                     NAMES; ADDRESSES AND WIRE INSTRUCTIONS
                     --------------------------------------

UNITED:
------

Address for Notices:

  If by U.S. Mail
  ---------------
  United Air Lines, Inc.
  P.O. Box 66100
  WHQFT
  Chicago, IL 60666
  Attention:  Vice President and Treasurer
  Telecopy:  (847) 700-7117

  If by Overnight Delivery Service
  --------------------------------

  United Air Lines, Inc.
  1200 East Algonquin Road
  WHQFT
  Elk Grove Township, IL 60007
  Attention: Vice President and Treasurer
  Telecopy: (847) 700-7117

PASS THROUGH TRUSTEE, SUBORDINATION AGENT AND AFE INDENTURE TRUSTEE:
-------------------------------------------------------------------

Address for Notices:

  State Street Bank and Trust Company
  of Connecticut, National Association
  225 Asylum Street
  Goodwin Square
  Hartford, Connecticut 06103
  Attention:  Corporate Trust Division
  Telecopy: (860) 244-1881

and
<PAGE>

State Street Bank and Trust Company
of Connecticut, National Association
c/o 2 Avenue de Lafayette, 6/th/ Floor
Boston, Massachusetts 02111-1724
Attention: Corporate Trust
Telecopy: (617) 662-1465

AFE TRUST:
---------

Address for Notices:

  c/o Wilmington Trust Company
  Rodney Square North
  1100 North Market Street
  Wilmington, DE 19890
  Attention: Corporate Trust Administration
  Telecopy: (302) 651-8882

                                      S-5
<PAGE>

                                SCHEDULE II to
                          AFE Note Purchase Agreement

                                   AFE NOTES,
                         PURCHASERS AND PURCHASE PRICE
                         -----------------------------

                           [To be completed by VPKK]

<TABLE>
<CAPTION>
Series         Purchaser      Interest Rate       Principal Amount
--------       ---------      -------------       ----------------
<S>            <C>            <C>                 <C>
</TABLE>

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