Document:

EX-10.02

 

Exhibit
10.02

GRANT NOTICE AGREEMENT FOR

PERFORMANCE RESTRICTED STOCK AWARD 

                                                      
      , 200_

          THIS GRANT NOTICE FOR PERFORMANCE RESTRICTED STOCK AWARD (this “Grant Notice”) is entered into
as of the date first written above between Education Management Corporation (the “Company”) and the
Grantee identified below. Capitalized terms used in this Grant Notice shall have the respective
meanings given to such terms in the Agreement, unless otherwise defined in this Grant Notice. This
Grant Notice confirms the grant to the Grantee of an award of Restricted Shares with the terms set
forth below. Such grant was made under the Education Management Corporation 2003 Incentive Plan.

	 	 	 
	Grantee Name:

	 	                                                            
	 
	 	 
	Grant Date:

	 	                                                         
      , 200_
	 
	 	 
	Number of Restricted Shares
Granted:

	 	                                        
	 
	 	 
	Performance Period:

	 	July 1, 200___to June 30, 200_
	 
	 	 
	Key Performance Objectives

(“KPOs”):

	 	[KPO’S AND WEIGHTING FOR EACH KPO TO COME]

          This Grant Notice hereby incorporates the provisions with respect to satisfaction of the KPOs
set forth in the Company’s 2006 Management Incentive Compensation Plan (the “2006 MICP”) under the
section titled “Long Term Equity Award Component”. The Restricted Shares granted pursuant to this
Grant Notice (the “Restricted Shares”) will be earned by the Grantee in accordance with the
provisions of the 2006 MICP. The Grantee will have the opportunity to vest in fifty percent (50%)
of the Restricted Shares on each of the first and second anniversaries of the Grant Date to the
extent that the applicable KPOs are satisfied during each such one-year period. Upon vesting, all
restrictions on the vested portion of the Restricted Shares shall cease and shall no longer be in
effect. The determination of whether the Grantee has earned the Restricted Shares will be made in
accordance with the terms of the 2006 MICP. All such determinations shall be final and binding
upon the parties hereto.

          This Grant Notice shall be subject to the terms and conditions of this Performance Restricted
Stock Award Agreement (the “Agreement”) attached hereto as Exhibit A. The Agreement shall
be deemed to be incorporated by reference into this Grant Notice to form a complete agreement
between the parties.

 

 

          IN WITNESS WHEREOF, the parties hereto, intending to be legally bound and for good and
valuable consideration, the sufficiency of which is hereby acknowledged, have entered into this
Grant Notice as of the date first written above.

Education Management Corporation

By:                                                             

Name:

Title:

GRANTEE

                                                            

Name:

Address:

- 2 -

 

EXHIBIT A

EDUCATION MANAGEMENT CORPORATION

PERFORMANCE RESTRICTED STOCK AWARD AGREEMENT

          The parties to this Performance Restricted Stock Award Agreement (this “Agreement”) are
Education Management Corporation, a Pennsylvania corporation (the “Company”), and the person
identified as the “Grantee” on the signature page to the Grant Notice (“Grant Notice”) to which
this Agreement is attached as Exhibit A.

          The Company has adopted the Education Management Corporation 2003 Stock Incentive Plan, as
amended (the “Plan”), for the benefit of eligible employees of the Company and its Subsidiaries.
Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the
Plan. The Compensation Committee of the Board of Directors of the Company approved the award of
shares of the Company’s Common Stock to the Grantee subject to certain transfer and forfeiture
restrictions set forth in this Agreement, as well as the provisions of the Plan. The Grant Notice
specifies the date of grant of the Award (the “Grant Date”), the number of Restricted Shares
granted and the Key Performance Objective applicable to such Restricted Shares. Such award shall
be subject to the terms and conditions of this Agreement and this Agreement shall be deemed to be
incorporated by reference into the Grant Notice to form a complete agreement between the parties.

			
	1.	 	RESTRICTED SHARES

          1.1      Grant of Restricted Shares.

          (a) As of the Date of Grant, the Company grants to the Grantee the number of shares of
Common Stock (the “Restricted Shares”) specified in the Grant Notice, subject to the terms,
condition and restrictions set forth in this Agreement and the terms and conditions of the
Plan. If and when the Restricted Period set forth in the Grant Notice expires without
forfeiture of the Restricted Shares, and upon the satisfaction of all other applicable
conditions as to the Restricted Shares, such shares shall no longer be considered Restricted
Shares for purposes of this Agreement.

          (b) As soon as practicable after the Grant Date, the Company shall direct that the
Restricted Shares be credited to the Grantee but held by the Company’s transfer agent in an
account in electronic form. The Restricted Shares shall be subject to such stop-transfer
orders and other restrictions as the Company may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal or state
securities law.

          (c) As soon as administratively practicable following the expiration of the Restricted
Period without a forfeiture of such Restricted Shares, and upon the satisfaction of all
other applicable conditions as to the Restricted Shares, including, but not limited to, the
payment by the Grantee of all applicable withholding taxes, the Company shall deliver or
cause to be delivered to the Grantee, either electronically or in certificate form, the
applicable Restricted Shares which shall not bear a restrictive legend. The Company may
cause a legend or legends to be placed on any such stock certificate to make appropriate
reference to any securities law or other legal restrictions applicable to such shares.

 

 

          1.2      Restrictions.

          (a) The Grantee shall have all rights and privileges of a shareholder as to the
Restricted Shares, including the right to vote and receive dividends or other distributions
with respect to the Restricted Shares, except that the following restrictions shall apply:

          (i) the Grantee shall not be entitled to delivery of the Restricted Shares,
electronically or in certificate form, until the expiration of the applicable
restrictions as set forth in the Grant Notice and upon the satisfaction of all other
applicable conditions;

          (ii) none of the Restricted Shares may be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of during the applicable Restricted Period,
except as provided in Section 7.01(c) of the Plan or as otherwise permitted by the
Committee in its sole discretion or pursuant to rules adopted by the Committee in
accordance with the Plan; provided, however, that unless the Committee determines
otherwise, the Grantee shall be permitted, upon request to the Committee, to sell or
otherwise dispose of a sufficient number of Restricted Shares which have vested in
accordance with this Agreement as may be reasonably necessary to satisfy any
applicable tax liability of the Grantee (including federal, state or local taxes,
estimated tax payments or required tax withholding) related to the vesting of such
Restricted Shares;

          (iii) all shares of Common Stock distributed as a dividend or distribution, if
any, with respect to the Restricted Shares prior to the expiration of the Restricted
Period shall be delivered to and held by the Company and subject to the same
restrictions as the Restricted Shares until the termination of the Restricted Period;
and

          (iv) all of the Restricted Shares shall be forfeited and returned to the Company
and all rights of the Grantee with respect to the Restricted Shares shall terminate
in their entirety on the terms and conditions set forth in Paragraph 1.3 and in the
Grant Notice.

          (b) Any attempt to dispose of Restricted Shares or any interest in the Restricted
Shares in a manner contrary to the restrictions set forth in this Agreement shall be void
and of no effect.

          1.3      Vesting/Forfeiture of the Restricted Shares. The Restricted Shares shall be
subject to the vesting terms and conditions set forth in the Grant Notice. In the event any
Restricted Shares are forfeited under the terms and conditions of the Grant Notice, the electronic
records of the Company’s transfer agent shall reflect the cancellation of the Restricted Shares to
the extent of any Restricted Shares that were forfeited.

          1.4      Withholding.

          (a) The Committee shall determine the amount of any withholding or other tax required
by law to be withheld or paid by the Company with respect to any income recognized by the
Grantee with respect to the Restricted Shares.

          (b) The Grantee shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 10.05 of the Plan.

- 2 -

 

          (c) The Committee shall be authorized, in its sole discretion, to establish such rules
and procedures relating to the use of shares of Common Stock to satisfy tax withholding
obligations as it deems necessary or appropriate to facilitate and promote the conformity of
the Grantee’s transactions under the Plan and this Agreement with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, if such Rule is applicable to transactions by
the Grantee.

          1.5      Committee’s Discretion. Notwithstanding any provision of this Agreement to the
contrary, the Committee shall have discretion under Section 7.02(b) of the Plan to waive any
forfeiture of the Restricted Shares and any other conditions set forth in this Agreement.

			
	2.	 	REPRESENTATIONS OF THE GRANTEE

          The Grantee hereby represents to the Company that the Grantee has read and fully understands
the provisions of this Agreement and the Plan and his or her decision to participate in the Plan is
completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his
or her own advisors with respect to the tax consequences of this restricted stock award.

			
	3.	 	NOTICES

          All notices or communications under this Agreement shall be in writing, addressed as follows:

To the Company:

Education Management Corporation

210 Sixth Avenue

Pittsburgh, PA 15222

Attention:                                                             ,

To the Grantee:

To the address set forth on the Grant Notice

Any such notice or communication shall be (a) delivered by hand (with written confirmation of
receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b)
be sent certified or registered mail, return receipt requested, postage prepaid, addressed as above
(or to such other address as such party may designate in writing from time to time), and the actual
date of receipt shall determine the time at which notice was given.

			
	4.	 	ASSIGNMENT; BINDING AGREEMENT

          This Agreement shall be binding upon and inure to the benefit of the heirs and representatives
of the Grantee and the assigns and successors of the Company, but neither this Agreement nor any
rights hereunder shall be assignable or otherwise subject to hypothecation by the Grantee.

- 3 -

 

			
	5.	 	ENTIRE AGREEMENT; AMENDMENT; TERMINATION

          This Agreement represents the entire agreement of the parties with respect to the subject
matter hereof. The provisions of the Plan are incorporated in this Agreement in their entirety.
In the event of any conflict between the provisions of this Agreement and the Plan, the provisions
of the Plan shall control. The Agreement may be amended at any time by written agreement of the
parties hereto.

			
	6.	 	GOVERNING LAW

          This Agreement and its validity, interpretation, performance and enforcement shall be governed
by the laws of the Commonwealth of Pennsylvania other than the conflict of laws provisions of such
laws.

			
	7.	 	SEVERABILITY

          Whenever possible, each provision in this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement shall be held
to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of this Agreement shall remain in full force and
effect.

			
	8.	 	NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER PLANS

          This Agreement shall not confer upon the Grantee any right with respect to continued
employment by the Company or its Subsidiaries or continued participation under the Plan, nor shall
it interfere in any way with the right of the Company and its Subsidiaries to terminate the
Grantee’s employment at any time. Payments received by the Grantee pursuant to this Agreement
shall not be included in the determination of benefits under any pension, group insurance or other
benefit plan of the Company or any Subsidiaries in which the Grantee may be enrolled or for which
the Grantee may become eligible, except as may be provided under the terms of such plans or
determined by the Board.

			
	9.	 	NO STRICT CONSTRUCTION

          No rule of strict construction shall be implied against the Company, the Committee or any
other person in the interpretation of any of the terms of the Plan, this Agreement or any rule or
procedure established by the Committee.

			
	10.	 	USE OF THE WORD “GRANTEE”

          Wherever the word “Grantee” is used in any provision of this Agreement under circumstances
where the provision should logically be construed to apply to the executors, the administrators, or
the person or persons to whom the Restricted Shares may be transferred by will or the laws of
descent and distribution, the word “Grantee” shall be deemed to include such person or persons.

			
	11.	 	FURTHER ASSURANCES

          The Grantee agrees, upon demand of the Company or the Committee, to do all acts and execute,
deliver and perform all additional documents, instruments and agreements (including, without
limitation, stock powers with respect to shares of Common Stock issued as a dividend or
distribution on Restricted

- 4 -

 

Shares) which may be reasonably required by the Company or the Committee, as the case may be, to
implement the provisions and purposes of this Agreement and the Plan.

- 5 -Exhibit 4.1 - Trust Supplement

    

      EXECUTION
        COPY

      

      

      

      

      

      

      TRUST
        SUPPLEMENT No. 2005-ERJ1

      

      Dated
        as
        of September 22, 2005

      

      

      between

      

      WILMINGTON
        TRUST COMPANY,

      as
        Trustee,

      

      

      and

      

      

      CONTINENTAL
        AIRLINES, INC.

      

      to

      

      PASS
        THROUGH TRUST AGREEMENT

      Dated
        as
        of September 25, 1997

      

      

      $311,010,000

      

      Continental
        Airlines Pass Through Trust 2005-ERJ1

      9.798%
        Continental Airlines

      Pass
        Through Certificates,

      Series
        2005-ERJ1

      

      

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      This
        Trust Supplement No. 2005-ERJ1, dated as of September 22, 2005 (herein called
        the “Trust
        Supplement”),
        between Continental Airlines, Inc., a Delaware corporation (the “Company”),
        and
        Wilmington Trust Company (the “Trustee”),
        to
        the Pass Through Trust Agreement, dated as of September 25, 1997, between
        the
        Company and the Trustee (the “Basic
        Agreement”).

      

      

      W I T N E S S E T H:

      

      WHEREAS,
        the Basic Agreement, unlimited as to the aggregate principal amount of
        Certificates (unless otherwise specified herein, capitalized terms used herein
        without definition having the respective meanings specified in the Basic
        Agreement) which may be issued thereunder, has heretofore been executed and
        delivered;

       

      WHEREAS,
        the Company wishes to lease certain Aircraft from the relevant Owner
        Trustees;

      

      WHEREAS,
        in the case of each Aircraft, the related Owner Trustee, acting on behalf
        of the
        related Owner Participant, will issue pursuant to an Indenture, on a
        non-recourse basis, one series of Equipment Notes in order to finance the
        debt
        portion of the purchase price of such Aircraft;

      

      WHEREAS,
        the Trustee hereby declares the creation of this Continental Airlines Pass
        Through Trust 2005-ERJ1 (the “Applicable
        Trust”)
        for
        the benefit of the Applicable Certificateholders, and the initial Applicable
        Certificateholders as the grantors of the Applicable Trust, by their respective
        acceptances of the Applicable Certificates, join in the creation of the
        Applicable Trust with the Trustee;

      

      WHEREAS,
        all Certificates to be issued by the Applicable Trust will evidence fractional
        undivided interests in the Applicable Trust and will convey no rights, benefits
        or interests in respect of any property other than the Trust Property except
        for
        those Certificates to which an Escrow Receipt has been affixed;

      

      WHEREAS,
        the Escrow Agent and the Underwriter have contemporaneously herewith entered
        into an Escrow Agreement with the Escrow Paying Agent pursuant to which the
        Underwriter has delivered to the Escrow Agent the proceeds from the sale
        of the
        Applicable Certificates, to the extent not used to purchase Equipment Notes
        on
        the Issuance Date, and have irrevocably instructed the Escrow Agent to withdraw
        and pay funds from such proceeds upon request and proper certification by
        the
        Trustee to purchase Equipment Notes as the Aircraft are financed under the
        NPA
        (as hereinafter defined) from time to time prior to the Delivery Period
        Termination Date;

      

      WHEREAS,
        the Escrow Agent on behalf of the Applicable Certificateholders has
        contemporaneously herewith entered into a Deposit Agreement with the Depositary
        under which the Deposits referred to therein will be made and from which
        it will
        withdraw funds to allow the Trustee to purchase Equipment Notes from time
        to
        time prior to the Delivery Period Termination Date;

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

      

      WHEREAS,
        pursuant to the terms and conditions of the Basic Agreement as supplemented
        by
        this Trust Supplement (the “Agreement”)
        and
        the NPA, upon the financing of an Aircraft, the Trustee on behalf of the
        Applicable Trust, using funds withdrawn under the Escrow Agreement (or, if
        financed on the Issuance Date, using a portion of the proceeds of the sale
        of
        the Applicable Certificates), shall purchase one or more Equipment Notes
        having
        the same interest rate as, and final maturity date not later than the final
        Regular Distribution Date of, the Applicable Certificates issued hereunder
        and
        shall hold such Equipment Notes in trust for the benefit of the Applicable
        Certificateholders;

      

      WHEREAS,
        all of the conditions and requirements necessary to make this Trust Supplement,
        when duly executed and delivered, a valid, binding and legal instrument in
        accordance with its terms and for the purposes herein expressed, have been
        done,
        performed and fulfilled, and the execution and delivery of this Trust Supplement
        in the form and with the terms hereof have been in all respects duly authorized;
        and

       

      
         WHEREAS,
          this Trust Supplement is subject to the provisions of the Trust Indenture
          Act of
          1939, as amended, and shall, to the extent applicable, be governed by such
          provisions.

      

      

      NOW
        THEREFORE, in consideration of the premises herein, it is agreed between
        the
        Company and the Trustee as follows:

      

      

      ARTICLE
        I

      THE
        CERTIFICATES

      

      Section
        1.01. The
        Certificates.
        There
        is hereby created a series of Certificates to be issued under the Agreement
        to
        be distinguished and known as “9.798% Continental Airlines Pass Through
        Certificates, Series 2005-ERJ1” (hereinafter defined as the “Applicable
        Certificates”).
        Each
        Applicable Certificate represents a fractional undivided interest in the
        Applicable Trust created hereby. The Applicable Certificates shall be the
        only
        instruments evidencing a fractional undivided interest in the Applicable
        Trust.

      

      The
        terms
        and conditions applicable to the Applicable Certificates are as
        follows:

      

      (a) The
        aggregate principal amount of the Applicable Certificates that shall be
        authenticated under the Agreement (except for Applicable Certificates
        authenticated and delivered pursuant to Sections 3.03, 3.04, 3.05 and 3.06
        of the Basic Agreement) is $311,010,000.

      

      (b) The
        Regular Distribution Dates with respect to any payment of Scheduled Payments
        means the 1st
        day of
        each month, commencing on October 1, 2005 until payment of all of the Scheduled
        Payments to be made under the Equipment Notes has been made.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      

      (c) The
        Special Distribution Dates with respect to the Applicable Certificates means
        any
        Business Day on which a Special Payment is to be distributed pursuant to
        the
        Agreement.

      

      (d) At
        the
        Escrow Agent’s request under the Escrow Agreement, the Trustee shall affix the
        corresponding Escrow Receipt to each Applicable Certificate. In any event,
        any
        transfer or exchange of any Applicable Certificate shall also effect a transfer
        or exchange of the related Escrow Receipt. Prior to the Final Withdrawal
        Date,
        no transfer or exchange of any Applicable Certificate shall be permitted
        unless
        the corresponding Escrow Receipt is attached thereto and also is so transferred
        or exchanged. By acceptance of any Applicable Certificate to which an Escrow
        Receipt is attached, each Holder of such an Applicable Certificate acknowledges
        and accepts the restrictions on transfer of the Escrow Receipt set forth
        herein
        and in the Escrow Agreement.

      

      (e) (i) The
        Applicable Certificates shall be in the form attached hereto as Exhibit A.
        Any
        Person acquiring or accepting an Applicable Certificate or an interest therein
        will, by such acquisition or acceptance, be deemed to represent and warrant
        to
        and for the benefit of each Owner Participant and the Company that either
        (i)
        the assets of an employee benefit plan subject to Title I of the Employee
        Retirement Income Security Act of 1974, as amended (“ERISA”),
        or of
        a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
        (the “Code”),
        have
        not been used to purchase Applicable Certificates or an interest therein
        or (ii)
        the purchase and holding of Applicable Certificates or an interest therein
        is
        exempt from the prohibited transaction restrictions of ERISA and the Code
        pursuant to one or more prohibited transaction statutory or administrative
        exemptions.

      

      (ii) The
        Applicable Certificates shall be Book-Entry Certificates and shall be subject
        to
        the conditions set forth in the Letter of Representations between the Company
        and the Clearing Agency attached hereto as Exhibit B.

      

      (f) The
        “Participation Agreements” as defined in this Trust Supplement are the “Note
        Purchase Agreements” referred to in the Basic Agreement.

      

      (g) The
        Applicable Certificates are subject to the Intercreditor Agreement, the Deposit
        Agreement and the Escrow Agreement.

      

      (h) The
        Applicable Certificates are entitled to the benefits of the Liquidity
        Facility.

      

      (i) The
        Responsible Party is the Company.

      

      (j) The
        date
        referred to in clause (i) of the definition of the term “PTC Event of Default”
in the Basic Agreement is the Final Maturity Date.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      (k) The
        “particular sections of the Note Purchase Agreement”, for purposes of clause (3)
        of Section 7.07 of the Basic Agreement, are Section 9.1 of each Participation
        Agreement.

      

      (l) The
        Equipment Notes to be acquired and held in the Applicable Trust, and the
        related
        Aircraft and Note Documents, are described in the NPA.

      

      

      ARTICLE
        II

      DEFINITIONS

      

      Section
        2.01. Definitions.
        For all
        purposes of the Basic Agreement as supplemented by this Trust Supplement,
        the
        following capitalized terms have the following meanings (any term used herein
        which is defined in both this Trust Supplement and the Basic Agreement shall
        have the meaning assigned thereto in this Trust Supplement for purposes of
        the
        Basic Agreement as supplemented by this Trust Supplement):

      

      Agreement:
        Has the
        meaning specified in the recitals hereto.

      

      Aircraft:
        Means
        each of the Aircraft (as defined in the NPA) or Substitute Aircraft in respect
        of which a Participation Agreement is to be or is, as the case may be, entered
        into in accordance with the NPA (or any substitute aircraft, including engines
        therefor, leased to the Company and securing one or more Equipment
        Notes).

      

      Aircraft
        Purchase Agreement:
        Means
        the “Purchase Agreement” as defined in the NPA.

      

      Applicable
        Certificate:
        Has the
        meaning specified in Section 1.01 of this Trust Supplement.

      

      Applicable
        Certificateholder:
        Means
        the Person in whose name an Applicable Certificate is registered on the Register
        for the Applicable Certificates.

      

      Applicable
        Closing Date:
        Has the
        meaning specified in Section 5.01(b) of this Trust Supplement.

      

      Applicable
        Participation Agreement:
        Has the
        meaning specified in Section 5.01(b) of this Trust Supplement.

      

      Applicable
        Trust:
        Has the
        meaning specified in the recitals hereto.

      

      Basic
        Agreement:
        Has the
        meaning specified in the first paragraph of this Trust Supplement.

       

      Business
        Day: Means any day other than a Saturday, a Sunday or a day on which
        commercial banks are required or authorized to close in Houston, Texas, New
        York, New 

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      York,
        Salt Lake City, Utah or, so long as any Applicable Certificate is Outstanding,
        the city and state in which the Trustee or any Loan Trustee maintains its
        Corporate Trust Office or receives and disburses funds.

       

      Company:
        Has the
        meaning specified in the first paragraph of this Trust Supplement.

      

      Controlling
        Party:
        Has the
        meaning specified in the Intercreditor Agreement.

      

      Cut-off
        Date:
        Means
        the earlier of (a) the Delivery Period Termination Date and (b) the date
        on
        which a Triggering Event occurs.

      

      Delivery
        Notice:
        Has the
        meaning specified in the NPA.

       

      Delivery
        Period Termination Date:
        Means
        the earlier of (a) May 31, 2006, or, if the Equipment Notes relating to all
        of
        the Aircraft (or Substitute Aircraft in lieu thereof) have not been purchased
        by
        the Trustee on or prior to such date due to any reason beyond the control
        of the
        Company and not occasioned by the Company’s fault or negligence, August 31, 2006
        and (b) the date on which Equipment Notes issued with respect to all of the
        Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by
        the
        Pass Through Trustee in accordance with the NPA.

      

      Deposit
        Agreement:
        Means
        the Deposit Agreement dated as of September 22, 2005 relating to the Applicable
        Certificates between the Depositary and the Escrow Agent, as the same may
        be
        amended, supplemented or otherwise modified from time to time in accordance
        with
        its terms.

      

      Depositary:
        Means
        Citibank, N.A., a national banking association.

      

      Deposits:
        Has the
        meaning specified in the Deposit Agreement.

      

      Distribution
        Date:
        Means
        any Regular Distribution Date or Special Distribution Date as the context
        requires.

      

      Embraer:
        Means
        Embraer-Empresa
        Brasileira de Aeronáutica S.A.

      

      Escrow
        Agent:
        Means,
        initially, Wells Fargo Bank Northwest, National Association, and any replacement
        or successor therefor appointed in accordance with the Escrow
        Agreement.

      

      Escrow
        Agreement:
        Means
        the Escrow and Paying Agent Agreement dated as of September 22, 2005 relating
        to
        the Applicable Certificates, among the Escrow Agent, the Escrow Paying Agent,
        the Trustee and Underwriter, as the same may be amended, supplemented or
        otherwise modified from time to time in accordance with its terms.

      

      Escrow
        Paying Agent:
        Means
        the Person acting as paying agent under the Escrow Agreement.

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      Escrow
        Receipt:
        Means
        the receipt substantially in the form annexed to the Escrow Agreement
        representing a fractional undivided interest in the funds held in escrow
        thereunder.

      

      Final
        Maturity Date:
        Means
        October 1, 2022.

      

      Final
        Withdrawal:
        Has the
        meaning specified in the Escrow Agreement.

      

      Final
        Withdrawal Date:
        Has the
        meaning specified in the Escrow Agreement.

      

      Final
        Withdrawal Notice:
        Has the
        meaning specified in Section 5.02 of this Trust Supplement.

      

      Indenture:
        Means
        each of the separate trust indentures and mortgages relating to the Aircraft,
        each as specified or described in a Delivery Notice delivered pursuant to
        the
        NPA or the related Participation Agreement, in each case as the same may
        be
        amended, supplemented or otherwise modified from time to time in accordance
        with
        its terms.

      

      Intercreditor
        Agreement:
        Means
        the Intercreditor Agreement (2005-ERJ1) dated as of September 22, 2005 among
        the
        Trustee, the Liquidity Provider and Wilmington Trust Company, as Subordination
        Agent and as trustee thereunder, as amended, supplemented or otherwise modified
        from time to time in accordance with its terms.

      

      Investors:
        Means
        the Underwriter together with all subsequent beneficial owners of the Applicable
        Certificates.

      

      Liquidity
        Facility:
        Means,
        initially, the Revolving Credit Agreement (2005-ERJ1) dated as of September
        22,
        2005 relating to the Applicable Certificates, between Landesbank
        Baden-Württemberg and Wilmington Trust Company, as Subordination Agent, as agent
        and trustee for the Applicable Trust and, from and after the replacement
        of such
        agreement pursuant to the Intercreditor Agreement, the replacement liquidity
        facility therefor, as amended, supplemented or otherwise modified from time
        to
        time in accordance with its terms.

      

      Liquidity
        Provider:
        Means,
        initially, Landesbank Baden-Württemberg, a bank established in Germany as a
        public law institution with legal capacity (Rechtsfähige
        Anstalt des Öffentlichen Rechts),
        and
        any replacement or successor therefor appointed in accordance with the
        Intercreditor Agreement.

      

      Note
        Documents:
        Means
        the Equipment Notes with respect to the Applicable Certificates and, with
        respect to any such Equipment Note, the related Indenture, Participation
        Agreement and Lease.

      

      Notice
        of Purchase Withdrawal:
        Has the
        meaning specified in the Deposit Agreement.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      NPA:
        Means
        the Note Purchase Agreement dated as of September 22, 2005 among the Trustee,
        the Company, the Escrow Agent, the Escrow Paying Agent and the Subordination
        Agent, providing for, among other things, the purchase of Equipment Notes
        by the
        Trustee on behalf of the Applicable Trust, as the same may be amended,
        supplemented or otherwise modified from time to time, in accordance with
        its
        terms.

      

      Participation
        Agreement:
        Means
        each Participation Agreement entered into or to be entered into, as the case
        may
        be, by the Trustee pursuant to the NPA, as the same may be amended, supplemented
        or otherwise modified from time to time in accordance with its
        terms.

      

      Pool
        Balance:
        Means,
        as of any date, (i) the original aggregate face amount of the Applicable
        Certificates less (ii) the aggregate amount of all payments made in respect
        of
        such Applicable Certificates or in respect of Deposits other than payments
        made
        in respect of interest or premium thereon or reimbursement of any costs or
        expenses incurred in connection therewith. The Pool Balance as of any
        Distribution Date shall be computed after giving effect to any special
        distribution with respect to unused Deposits, payment of principal of the
        Equipment Notes or payment with respect to other Trust Property and the
        distribution thereof to be made on that date.

      

      Pool
        Factor:
        Means,
        as of any Distribution Date, the quotient (rounded to the seventh decimal
        place)
        computed by dividing (i) the Pool Balance by (ii) the original aggregate
        face
        amount of the Applicable Certificates. The Pool Factor as of any Distribution
        Date shall be computed after giving effect to any special distribution with
        respect to unused Deposits, payment of principal of the Equipment Notes or
        payments with respect to other Trust Property and the distribution thereof
        to be
        made on that date.

      

      Prospectus
        Supplement:
        Means
        the final Prospectus Supplement dated September 14, 2005 relating to the
        offering of the Applicable Certificates.

      

      Ratings
        Confirmation:
        Has the
        meaning specified in the Intercreditor Agreement.

      

      Scheduled
        Closing Date:
        Has the
        meaning specified in the NPA.

      

      Special
        Payment:
        Means
        any payment (other than a Scheduled Payment) in respect of, or any proceeds
        of,
        any Equipment Note or Trust Indenture Estate (as defined in each
        Indenture).

      

      Substitute
        Aircraft:
        Has the
        meaning specified in the NPA.

      

      Triggering
        Event:
        Has the
        meaning assigned to such term in the Intercreditor Agreement.

      

      Trust
        Property:
        Means
        (i) subject to the Intercreditor Agreement, the Equipment Notes held as the
        property of the Applicable Trust, all monies at any time paid thereon 

      
        
          
          

        

        
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      and
        all
        monies due and to become due thereunder, (ii) funds from time to time deposited
        in the Certificate Account and the Special Payments Account and, subject
        to
the
        Intercreditor Agreement, any proceeds from the sale by the Trustee pursuant
        to
        Article VI of the Basic Agreement of any Equipment Note and (iii) all rights
        of
        the Applicable Trust and the Trustee, on behalf of the Applicable Trust,
        under
        the Intercreditor Agreement, the Escrow Agreement, the NPA and the Liquidity
        Facility, including, without limitation, all rights to receive certain payments
        thereunder, and all monies paid to the Trustee on behalf of the Applicable
        Trust
        pursuant to the Intercreditor Agreement or the Liquidity Facility, provided
        that
        rights with respect to the Deposits or under the Escrow Agreement, except
        for
        the right to direct withdrawals for the purchase of Equipment Notes to be
        held
        herein, will not constitute Trust Property.

      

      Trust
        Supplement:
        Has the
        meaning specified in the first paragraph of this trust supplement.

      

      Underwriter:
        Means
        Citigroup Global Markets Inc.

      

      Underwriting
        Agreement:
        Means
        the Underwriting Agreement dated September 14, 2005 among the Underwriter,
        the
        Company, the Depositary and Embraer, as the same may be amended, supplemented
        or
        otherwise modified from time to time in accordance with its terms.

      

      ARTICLE
        III

      DISTRIBUTIONS;
        STATEMENTS TO CERTIFICATEHOLDERS

      

      Section
        3.01. Statements
        to Applicable Certificateholders.
        (a)  On each Distribution Date, the Trustee will include with each
        distribution to Applicable Certificateholders of a Scheduled Payment or Special
        Payment, as the case may be, a statement setting forth the information provided
        below (in the case of a Special Payment, reflecting in part the information
        provided by the Escrow Paying Agent under the Escrow Agreement). Such statement
        shall set forth (per $1,000 face amount Applicable Certificate as to (ii),
        (iii), (iv) and (v) below) the following information:

      

      (i) the
        aggregate amount of funds distributed on such Distribution Date under the
        Agreement and under the Escrow Agreement, indicating the amount allocable
        to
        each source;

      

      (ii) the
        amount of such distribution under the Agreement allocable to principal and
        the
        amount allocable to premium, if any;

      

      (iii) the
        amount of such distribution under the Agreement allocable to
        interest;

      

      (iv) the
        amount of such distribution under the Escrow Agreement allocable to
        interest;

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (v) the
        amount of such distribution under the Escrow Agreement allocable to unused
        Deposits, if any; and

      

      (vi) the
        Pool
        Balance and the Pool Factor.

      

      With
        respect to the Applicable Certificates registered in the name of a Clearing
        Agency, on the Record Date prior to each Distribution Date, the Trustee will
        request from such Clearing Agency a securities position listing setting forth
        the names of all Clearing Agency Participants reflected on such Clearing
        Agency’s books as holding interests in the Applicable Certificates on such
        Record Date. On each Distribution Date, the Trustee will mail to each such
        Clearing Agency Participant the statement described above and will make
        available additional copies as requested by such Clearing Agency Participant
        for
        forwarding to holders of interests in the Applicable Certificates.

      

      (b) Within
        a
        reasonable period of time after the end of each calendar year but not later
        than
        the latest date permitted by law, the Trustee shall furnish to each Person
        who
        at any time during such calendar year was an Applicable Certificateholder
        of
        record a statement containing the sum of the amounts determined pursuant
        to
        clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and (a)(v) above for such calendar
        year or, in the event such Person was an Applicable Certificateholder of
        record
        during a portion of such calendar year, for such portion of such calendar
        year,
        and such other items as are readily available to the Trustee and which an
        Applicable Certificateholder shall reasonably request as necessary for the
        purpose of such Applicable Certificateholder’s preparation of its federal income
        tax returns. Such statement and such other items shall be prepared on the
        basis
        of information supplied to the Trustee by the Clearing Agency Participants
        and
        shall be delivered by the Trustee to such Clearing Agency Participants to
        be
        available for forwarding by such Clearing Agency Participants to the holders
        of
        interests in the Applicable Certificates in the manner described in Section
        3.01(a) of this Trust Supplement.

      

      (c) Promptly
        following (i) the Delivery Period Termination Date, if there has been any
        change
        in the information set forth in clauses (y) and (z) below from that set forth
        in
        pages S-32 through S-36 of the Prospectus Supplement, and (ii) the date of
        any early redemption or purchase of, or any default in the payment of principal
        or interest in respect of, any of the Equipment Notes held in the Applicable
        Trust, or any Final Withdrawal, the Trustee shall furnish to Applicable
        Certificateholders of record on such date a statement setting forth (x) the
        expected Pool Balances for each subsequent Regular Distribution Date following
        the Delivery Period Termination Date, (y) the related Pool Factors for such
        Regular Distribution Dates and (z) the expected principal distribution schedule
        of the Equipment Notes, in the aggregate, held as Trust Property at the date
        of
        such notice. With respect to the Applicable Certificates registered in the
        name
        of a Clearing Agency, on the Delivery Period Termination Date, the Trustee
        will
        request from such Clearing Agency a securities position listing setting forth
        the names of all Clearing Agency Participants reflected on such Clearing
        Agency’s books as holding interests in the Applicable Certificates on such date.
        The Trustee will mail to each such Clearing Agency Participant the statement
        described above and will make available additional copies as requested by
        such
        Clearing Agency Participant for forwarding to holders of interests in the
        Applicable Certificates.

       

      
        
          
          

        

        
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      (d) This
        Section 3.01 supersedes and replaces Section 4.03 of the Basic Agreement,
        with
        respect to the Applicable Trust.

       

       

      Section
        3.02. Special
        Payments Account.
        (a) The
        Trustee shall establish and maintain on behalf of the Applicable
        Certificateholders a Special Payments Account as one or more accounts, which
        shall be non-interest bearing except as provided in Section 4.04 of the Basic
        Agreement. The Trustee shall hold the Special Payments Account in trust for
        the
        benefit of the Applicable Certificateholders and shall make or permit
        withdrawals therefrom only as provided in the Agreement. On each day when
        one or
        more Special Payments are made to the Trustee under the Intercreditor Agreement,
        the Trustee, upon receipt thereof, shall immediately deposit the aggregate
        amount of such Special Payments in the Special Payments Account.

       

      (b)
        This
        Section 3.02 supersedes and replaces Section 4.01(b) of the Basic Agreement
        in
        its entirety, with respect to the Applicable Trust.

       

      Section
        3.03. Distributions
        from Special Payments Account.
        (a) On
        each Special Distribution Date with respect to any Special Payment or as
        soon
        thereafter as the Trustee has confirmed receipt of any Special Payments due
        on
        the Equipment Notes held (subject to the Intercreditor Agreement) in the
        Applicable Trust or realized upon the sale of such Equipment Notes, the Trustee
        shall distribute out of the Special Payments Account the entire amount of
        such
        Special Payment deposited therein pursuant to Section 3.02(a) of this Trust
        Supplement. There shall be so distributed to each Applicable Certificateholder
        of record on the Record Date with respect to such Special Distribution Date
        (other than as provided in Section 11.01 of the Basic Agreement concerning
        the
        final distribution) by check mailed to such Applicable Certificateholder,
        at the
        address appearing in the Register, such Applicable Certificateholder’s pro rata
        share (based on the Fractional Undivided Interest in the Applicable Trust
        held
        by such Applicable Certificateholder) of the total amount in the Special
        Payments Account on account of such Special Payment, except that, with respect
        to Applicable Certificates registered on the Record Date in the name of a
        Clearing Agency (or its nominee), such distribution shall be made by wire
        transfer in immediately available funds to the account designated by such
        Clearing Agency (or such nominee).

       

      (b) The
        Trustee shall, at the expense of the Company, cause notice of each Special
        Payment to be mailed to each Applicable Certificateholder at his address
        as it
        appears in the Register. In the event of redemption or purchase of Equipment
        Notes held in the Applicable Trust, such notice shall be mailed not less
        than 15
        days prior to the Special Distribution Date for the Special Payment resulting
        from such redemption or purchase, which Special Distribution Date shall be
        the
        date of such redemption or purchase. In the case of any other Special Payments,
        such notice shall be mailed as soon as practicable after the Trustee has
        confirmed that it has received funds for such Special Payment, stating the
        Special Distribution Date for such Special Payment which shall occur not
        less
        than 15 days after the date of such notice and as soon as practicable
        thereafter. Notices mailed by the Trustee shall set forth:

       

      (i) the
        Special Distribution Date and the Record Date therefor (except as otherwise
        provided in Section 11.01 of the Basic Agreement),

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (ii) the
        amount of the Special Payment for each $1,000 face amount Applicable Certificate
        and the amount thereof constituting principal, premium, if any, and
        interest,

       

      (iii) the
        reason for the Special Payment, and

       

      (iv) if
        the
        Special Distribution Date is the same date as a Regular Distribution Date,
        the
        total amount to be received on such date for each $1,000 face amount Applicable
        Certificate.

       

      If
        the
        amount of premium, if any, payable upon the redemption or purchase of an
        Equipment Note has not been calculated at the time that the Trustee mails
        notice
        of a Special Payment, it shall be sufficient if the notice sets forth the
        other
        amounts to be distributed and states that any premium received will also
        be
        distributed.

       

      If
        any
        redemption of the Equipment Notes held in the Trust is canceled, the Trustee,
        as
        soon as possible after learning thereof, shall cause notice thereof to be
        mailed
        to each Applicable Certificateholder at its address as it appears on the
        Register.

       

      (b)
        This
        Section 3.03 supersedes and replaces Section 4.02(b) and Section 4.02(c)
        of the
        Basic Agreement in their entirety, with respect to the Applicable
        Trust.

      

      ARTICLE
        IV

      DEFAULT

      

      Section
        4.01. Amendment
        of Section 6.05 of the Basic Agreement.
        Section
        6.05 of the Basic Agreement shall be amended, with respect to the Applicable
        Trust, by deleting the phrase “and thereby annul any Direction given by such
        Certificateholders or the Trustee to such Loan Trustee with respect thereto,”
set forth in the first sentence thereof.

      

      

      ARTICLE
        V

      THE
        TRUSTEE

      

      

      Section
        5.01. Delivery
        of Documents; Delivery Dates.
        (a) The
        Trustee is hereby directed (i) to execute and deliver the Intercreditor
        Agreement, the Escrow Agreement and the NPA on or prior to the Issuance Date,
        each in the form delivered to the Trustee by the Company, and (ii) subject
        to
        the respective terms thereof, to perform its obligations thereunder. Upon
        request of the Company and the satisfaction or waiver of the closing conditions
        specified in the Underwriting Agreement, the Trustee shall execute, deliver,
        authenticate, issue and sell Applicable Certificates in authorized denominations
        equaling in the aggregate the amount set forth, with respect to the Applicable
        Trust, in Schedule I to the Underwriting Agreement evidencing the entire
        ownership interest in the Applicable Trust, which amount equals the maximum
        aggregate principal amount of Equipment Notes which may be purchased by the
        Trustee pursuant to the NPA. Except as provided in Sections 3.03, 3.04, 3.05
        and
        3.06 of the Basic Agreement, the Trustee shall not execute, authenticate
        or  deliver Applicable Certificates in excess of the aggregate amount
        specified in this paragraph. The provisions of this 

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Section 5.01(a)
        supersede and replace the first sentence of Section 3.02(a) of the Basic
        Agreement, with respect to the Applicable Trust.

      

      (b) On
        or
        after the Issuance Date, the Company may deliver from time to time to the
        Trustee a Delivery Notice relating to one or more Equipment Notes. After
        receipt
        of a Delivery Notice and in any case no later than one Business Day prior
        to a
        Scheduled Closing Date as to which such Delivery Notice relates (the
“Applicable
        Closing Date”),
        the
        Trustee shall (as and when specified in the Delivery Notice) instruct the
        Escrow
        Agent to provide a Notice of Purchase Withdrawal to the Depositary requesting
        (A) the withdrawal of one or more Deposits on the Applicable Closing Date
        in
        accordance with and to the extent permitted by the terms of the Escrow Agreement
        and the Deposit Agreement and (B) the payment of all, or a portion, of such
        Deposit or Deposits in an amount equal in the aggregate to the purchase price
        of
        such Equipment Notes to or on behalf of the Owner Trustee issuing such Equipment
        Notes, all as shall be described in the Delivery Notice; provided
        that, if
        the Issuance Date is an Applicable Closing Date, the Trustee shall not so
        instruct the Escrow Agent, and the purchase price of such Equipment Notes
        shall
        be paid from a portion of the proceeds of the sale of the Applicable
        Certificates. The Trustee shall (as and when specified in such Delivery Notice),
        subject to the conditions set forth in Section 2 of the NPA, enter into and
        perform its obligations under the Participation Agreement specified in such
        Delivery Notice (the “Applicable
        Participation Agreement”)
        and
        cause such certificates, documents and legal opinions relating to the Trustee
        to
        be duly delivered as required by the Applicable Participation Agreement.
        If at
        any time prior to the Applicable Closing Date, the Trustee receives a notice
        of
        postponement pursuant to Section 1(e) or 1(f) of the NPA, then the Trustee
        shall
        give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
        of such Notice of Purchase Withdrawal relating to such Deposit or Deposits
        on
        such Applicable Closing Date. Upon satisfaction of the conditions specified
        in
        the NPA and the Applicable Participation Agreement, the Trustee shall purchase
        the applicable Equipment Notes with the proceeds of the withdrawals of one
        or
        more Deposits made on the Applicable Closing Date in accordance with the
        terms
        of the Deposit Agreement and the Escrow Agreement (or, if the Issuance Date
        is
        the Applicable Closing Date with respect to such Applicable Participation
        Agreement, from a portion of the proceeds of the sale of the Applicable
        Certificates; provided,
        that,
        if any portion of such proceeds is not used to purchase Equipment Notes by
        3:30
        p.m., New York time, on such date, the Trustee (on behalf of the Investors)
        shall immediately (but in no event later than 4:00 p.m., New York time, on
        such
        date) deposit such unused proceeds with the Depositary (in Federal immediately
        available funds by wire transfer) in accordance with the Deposit Agreement
        and
        such deposit or deposits shall constitute a "Deposit" or "Deposits" (as defined
        therein) for all purposes thereunder). The purchase price of such Equipment
        Notes shall equal the principal amount of such Equipment Notes. Amounts
        withdrawn from such Deposit or Deposits in excess of the purchase price of
        the
        Equipment Notes or to the extent not applied on the Applicable Closing Date
        to
        the purchase price of the Equipment Notes, shall be re-deposited by the Trustee
        with the Depositary on the Applicable Closing Date in accordance with the
        terms
        of the Deposit Agreement. The provisions of this Section 5.01(b) supersede
        and
        replace the provisions of Section 2.02 of the Basic Agreement with respect
        to
        the Applicable Trust, and all provisions of the Basic Agreement relating
        to
        Postponed Notes and Section 2.02 of the Basic Agreement shall not apply to
        the
        Applicable Trust.

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (c)
        The
        Trustee acknowledges its acceptance of all right, title and interest in and
        to
        the Trust Property to be acquired pursuant to Section 5.01(b) of this Trust
        Supplement, the NPA and each Applicable Participation Agreement, and declares
        that it holds and will hold such right, title and interest for the benefit
        of
        all present and future Applicable Certificateholders, upon the trusts set
        forth
        in the Agreement. By its acceptance of an Applicable Certificate, each initial
        Applicable Certificateholder, as a grantor of the Applicable Trust, joins
        with
        the Trustee in the creation of the Applicable Trust. The provisions of this
        Section 5.01(c) supersede and replace the provisions of Section 2.03 of the
        Basic Agreement, with respect to the Applicable Trust.

      

      Section
        5.02. Withdrawal
        of Deposits.
        If any
        Deposits remain outstanding on the Business Day next succeeding the Cut-off
        Date, the Trustee shall give the Escrow Agent notice that the Trustee’s
        obligation to purchase Equipment Notes under the NPA has terminated and instruct
        the Escrow Agent to provide a notice of Final Withdrawal to the Depositary
        substantially in the form of Exhibit B to the Deposit Agreement (the
“Final
        Withdrawal Notice”).

      

      Section
        5.03. The
        Trustee.
        (a)
        Subject to Section 5.04 of this Trust Supplement and Section 7.15 of the
        Basic
        Agreement, the Trustee shall not be responsible in any manner whatsoever
        for or
        in respect of the validity or sufficiency of this Trust Supplement, the Deposit
        Agreement, the NPA or the Escrow Agreement or the due execution hereof or
        thereof by the Company or the other parties thereto (other than the Trustee),
        or
        for or in respect of the recitals and statements contained herein or therein,
        all of which recitals and statements are made solely by the Company, except
        that
        the Trustee hereby represents and warrants that each of this Trust Supplement,
        the Basic Agreement, each Applicable Certificate, the Intercreditor Agreement,
        the NPA and the Escrow Agreement has been executed and delivered by one of
        its
        officers who is duly authorized to execute and deliver such document on its
        behalf.

      

      (b) Except
        as
        herein otherwise provided and except during the continuation of an Event
        of
        Default in respect of the Applicable Trust created hereby, no duties,
        responsibilities or liabilities are assumed, or shall be construed to be
        assumed, by the Trustee by reason of this Trust Supplement other than as
        set
        forth in the Agreement, and this Trust Supplement is executed and accepted
        on
        behalf of the Trustee, subject to all the terms and conditions set forth
        in the
        Agreement, as fully to all intents as if the same were herein set forth at
        length.

      

      Section
        5.04. Representations
        and Warranties of the Trustee.
        The
        Trustee hereby represents and warrants that:

      

      (a) the
        Trustee has full power, authority and legal right to execute, deliver and
        perform this Trust Supplement, the Intercreditor Agreement, the Escrow
        Agreement, the NPA and the Note Documents to which it is or is to become
        a party
        and has taken all necessary action to authorize the execution, delivery and
        performance by it of this Trust Supplement, the Intercreditor Agreement,
        the
        Escrow Agreement, the NPA and the Note Documents to which it is or is to
        become
        a party;

      

      (b) the
        execution, delivery and performance by the Trustee of this Trust Supplement,
        the
        Intercreditor Agreement, the Escrow Agreement, the NPA and the Note

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      Documents
        to which it is or is to become a party (i) will not violate any provision
        of any United States federal law or the law of the state of the United States
        where it is located governing the banking and trust powers of the Trustee
        or any
        order, writ, judgment, or decree of any court, arbitrator or governmental
        authority applicable to the Trustee or any of its assets, (ii) will not
        violate any provision of the articles of association or by-laws of the Trustee,
        and (iii) will not violate any provision of, or constitute, with or without
        notice or lapse of time, a default under, or result in the creation or
        imposition of any lien on any properties included in the Trust Property pursuant
        to the provisions of any mortgage, indenture, contract, agreement or other
        undertaking to which it is a party, which violation, default or lien could
        reasonably be expected to have an adverse effect on the Trustee’s performance or
        ability to perform its duties hereunder or thereunder or on the transactions
        contemplated herein or therein;

      

      (c) the
        execution, delivery and performance by the Trustee of this Trust Supplement,
        the
        Intercreditor Agreement, the Escrow Agreement, the NPA and the Note Documents
        to
        which it is or is to become a party will not require the authorization, consent,
        or approval of, the giving of notice to, the filing or registration with,
        or the
        taking of any other action in respect of, any governmental authority or agency
        of the United States or the state of the United States where it is located
        regulating the banking and corporate trust activities of the Trustee;
        and

      

      (d) this
        Trust Supplement, the Intercreditor Agreement, the Escrow Agreement, the
        NPA and
        the Note Documents to which it is or is to become a party have been, or will
        be,
        as applicable, duly executed and delivered by the Trustee and constitute,
        or
        will constitute, as applicable, the legal, valid and binding agreements of
        the
        Trustee, enforceable against it in accordance with their respective terms;
        provided,
        however,
        that
        enforceability may be limited by (i) applicable bankruptcy, insolvency,
        reorganization, moratorium or similar laws affecting the rights of creditors
        generally and (ii) general principles of equity.

      

      Section
        5.05. Trustee
        Liens.
        The
        Trustee in its individual capacity agrees, in addition to the agreements
        contained in Section 7.17 of the Basic Agreement, that it will at its own
        cost
        and expense promptly take any action as may be necessary to duly discharge
        and
        satisfy in full any Trustee’s Liens on or with respect to the Trust Property
        which is attributable to the Trustee in its individual capacity and which
        is
        unrelated to the transactions contemplated by the Intercreditor Agreement
        or the
        NPA.

      

      
        
          
          

        

        
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      ARTICLE
        VI

      ADDITIONAL
        AMENDMENT; SUPPLEMENTAL AGREEMENTS

      

      Section
        6.01. Amendment
        of Section 5.02 of the Basic Agreement.
        Section
        5.02 of the Basic Agreement shall be amended, with respect to the Applicable
        Trust, by (i) replacing the phrase “of the Note Documents and of this Agreement”
set forth in paragraph (b) thereof with the phrase “of the Note Documents, of
        the NPA and of this Agreement” and (ii) replacing the phrase “of this Agreement
        and any Note Document” set forth in the last paragraph of Section 5.02 with
        the phrase “of this Agreement, the NPA and any Note Document”.

      

      Section
        6.02. Supplemental
        Agreements Without Consent of Applicable Certificateholders.
        Without
        limitation of Section 9.01 of the Basic Agreement, under the terms of, and
        subject to the limitations contained in, Section 9.01 of the Basic Agreement,
        the Company may (but will not be required to), and the Trustee (subject to
        Section 9.03 of the Basic Agreement) shall, at the Company’s request, at any
        time and from time to time, enter into one or more agreements supplemental
        to
        the Escrow Agreement, the NPA or the Deposit Agreement, for any of the purposes
        set forth in clauses (1) through (9) of such Section 9.01, and (without
        limitation of the foregoing or Section 9.01 of the Basic Agreement) (a) clauses
        (2) and (3) of such Section 9.01 shall also be deemed to include the Company’s
        obligations under (in the case of clause (2)), and the Company’s rights and
        powers conferred by (in the case of clause (3)), the NPA, and
        (b) references in clauses (4), (6) and (7) of such Section 9.01 to “any
        Intercreditor Agreement or any Liquidity Facility” shall also be deemed to refer
        to “the Intercreditor Agreement, the Liquidity Facility, the Escrow Agreement,
        the NPA or the Deposit Agreement”.

      

      Section
        6.03. Supplemental
        Agreements with Consent of Applicable Certificateholders.
        Without
        limitation of Section 9.02 of the Basic Agreement, the provisions of Section
        9.02 of the Basic Agreement shall apply to agreements or amendments for the
        purpose of adding any provisions to or changing in any manner or eliminating
        any
        of the provisions of the Escrow Agreement, the Deposit Agreement or the NPA
        or
        modifying in any manner the rights and obligations of the Applicable
        Certificateholders under the Escrow Agreement, the Deposit Agreement or the
        NPA;
        provided that the provisions of Section 9.02(1) of the Basic Agreement shall
        be
        deemed to include reductions in any manner of, or delay in the timing of,
        any
        receipt by the Applicable Certificateholders of payments upon the
        Deposits.

      

      

      ARTICLE
        VII

      MISCELLANEOUS
        PROVISIONS

      

      Section 7.01.
        Basic
        Agreement Ratified.
        Except
        and so far as herein expressly provided, all of the provisions, terms and
        conditions of the Basic Agreement are in all respects ratified and confirmed;
        and the Basic Agreement and this Trust Supplement shall be taken, read and
        construed as one and the same instrument. All replacements of provisions
        of, and
        other modifications of the Basic Agreement set forth in this Trust Supplement
        are solely with respect to the Applicable Trust.

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      Section
        7.02. GOVERNING
        LAW.
        THE AGREEMENT AND THE APPLICABLE CERTIFICATES HAVE BEEN DELIVERED IN THE
        STATE
        OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
        LAWS
        OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
        PARTIES
        HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. THIS SECTION
        7.02
        SUPERSEDES AND REPLACES SECTION 12.05 OF THE BASIC AGREEMENT, WITH RESPECT
        TO
        THE APPLICABLE TRUST.

      

      Section
        7.03. Execution
        in Counterparts.
        This
        Trust Supplement may be executed in any number of counterparts, each of which
        shall be an original, but such counterparts shall together constitute but
        one
        and the same instrument.

      

      Section
        7.04. Intention
        of Parties.
        The
        parties hereto intend that the Applicable Trust be classified for U.S. federal
        income tax purposes as a grantor trust under Subpart E, Part I of Subchapter
        J
        of the Internal Revenue Code of 1986, as amended, and not as a trust or
        association taxable as a corporation or as a partnership. Each Applicable
        Certificateholder and Investor, by its acceptance of its Applicable Certificate
        or a beneficial interest therein, agrees to treat the Applicable Trust as
        a
        grantor trust for all U.S. federal, state and local income tax purposes.
        The
        powers granted and obligations undertaken pursuant to the Agreement shall
        be so
        construed so as to further such intent.

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company and the Trustee have caused this Trust Supplement
        to be duly executed by their respective officers thereto duly authorized,
        as of
        the day and year first written above.

      

      CONTINENTAL
        AIRLINES, INC.

      

      

      By:_________________________

      Name:

      Title:

      

      

      

      WILMINGTON
        TRUST COMPANY,

                     as
        Trustee

      

      

      By:_________________________

      Name:

      Title:

      

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      

      

      FORM
        OF
        CERTIFICATE

      

      Certificate

      No.
              

      

      [Unless
        this certificate is presented by an authorized representative of The Depository
        Trust Company, a New York corporation (“DTC”),
        to
        Issuer or its agent for registration of transfer, exchange or payment, and
        any
        certificate issued is registered in the name of Cede & Co. or in such other
        name as is requested by an authorized representative of DTC (and any payment
        is
        made to Cede & Co. or to such other entity as is requested by an authorized
        representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
        OR
        OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
        Cede & Co., has an interest herein.]* 

      

      

      

      CONTINENTAL
        AIRLINES PASS THROUGH TRUST 2005-ERJ1

      

      9.798%
        Continental Airlines Pass Through Certificate, Series 2005-ERJ1

      Issuance
        Date: September 22, 2005

      

      Final
        Maturity Date: October 1, 2022

      

      Evidencing
        A Fractional Undivided Interest In The Continental Airlines Pass Through
        Trust
        2005-ERJ1, The Property Of Which Shall Include Certain Equipment Notes Each
        Secured By An Aircraft Leased To Continental Airlines, Inc.

      

      

      $[_____________]
        Fractional Undivided Interest

      representing
        0.0003215330697% of the Trust per $1,000 face amount

      

      THIS
        CERTIFIES THAT __________, for value received, is the registered owner of
        a
        $___________ (_________________________________________________ DOLLARS)
        Fractional Undivided Interest in the Continental Airlines Pass Through Trust
        2005-ERJ1 (the “Trust”)
        created by Wilmington Trust Company, as trustee (the “Trustee”),
        pursuant to a Pass Through Trust Agreement, dated as of September 25, 1997
        (the
“Basic
        Agreement”),
        between the Trustee and Continental Airlines, Inc., a Delaware corporation
        (the
“Company”),
        as  

       

      __________________

      * This
        legend to appear on Book-Entry Certificates to be deposited with the Depository
        Trust Company.

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      supplemented
        by Trust Supplement No. 2005-ERJ1 thereto, dated as of September 22, 2005
        (the
“Trust
        Supplement”
        and,
        together with the Basic Agreement, the “Agreement”),
        between the Trustee and the Company, a summary of certain of the pertinent
        provisions of which is set forth below. To the extent not otherwise defined
        herein, the capitalized terms used herein have the meanings assigned to them
        in
        the Agreement. This Certificate is one of the duly authorized Certificates
        designated as “9.798% Continental Airlines Pass Through Certificates, Series
        2005-ERJ1”(herein called the “Certificates”).
        This
        Certificate is issued under and is subject to the terms, provisions and
        conditions of the Agreement. By virtue of its acceptance hereof, the holder
        of
        this Certificate (the “Certificateholder”
and,
        together with all other holders of Certificates issued by the Trust, the
        “Certificateholders”)
        assents to and agrees to be bound by the provisions of the Agreement and
        the
        Intercreditor Agreement. The property of the Trust includes certain Equipment
        Notes and all rights of the Trust to receive payments under the Intercreditor
        Agreement and the Liquidity Facility (the “Trust
        Property”).
        Each
        issue of the Equipment Notes is secured by, among other things, a security
        interest in an Aircraft leased to the Company.

      

      The
        Certificates represent Fractional Undivided Interests in the Trust and the
        Trust
        Property and have no rights, benefits or interest in respect of any other
        separate trust established pursuant to the terms of the Basic Agreement for
        any
        other series of certificates issued pursuant thereto.

      

      Subject
        to and in accordance with the terms of the Agreement and the Intercreditor
        Agreement, from funds then available to the Trustee, there will be distributed
        on the 1st
        day of
        each month (a “Regular
        Distribution Date”)
        commencing on October 1, 2005 to the Person in whose name this Certificate
        is
        registered at the close of business on the 15th day preceding the Regular
        Distribution Date, an amount in respect of the Scheduled Payments on the
        Equipment Notes due on such Regular Distribution Date, the receipt of which
        has
        been confirmed by the Trustee, equal to the product of the percentage interest
        in the Trust evidenced by this Certificate and an amount equal to the sum
        of
        such Scheduled Payments. Subject to and in accordance with the terms of the
        Agreement and the Intercreditor Agreement, in the event that Special Payments
        on
        the Equipment Notes are received by the Trustee, from funds then available
        to
        the Trustee, there shall be distributed on the applicable Special Distribution
        Date, to the Person in whose name this Certificate is registered at the close
        of
        business on the 15th day preceding the Special Distribution Date, an amount
        in respect of such Special Payments on the Equipment Notes, the receipt of
        which
        has been confirmed by the Trustee, equal to the product of the percentage
        interest in the Trust evidenced by this Certificate and an amount equal to
        the
        sum of such Special Payments so received. If a Regular Distribution Date
        or
        Special Distribution Date is not a Business Day, distribution shall be made
        on
        the immediately following Business Day with the same force and effect as
        if made
        on such Regular Distribution Date or Special Distribution Date and no interest
        shall accrue during the intervening period. The Trustee shall mail notice
        of
        each Special Payment and the Special Distribution Date therefor to the
        Certificateholder of this Certificate.

      

      Distributions
        on this Certificate will be made by the Trustee by check mailed to the Person
        entitled thereto, without presentation or surrender of this Certificate or
        the
        making of any notation hereon, except that with respect to Certificates
        registered on the Record Date in the name of a Clearing Agency (or its nominee),
        such distribution shall be made by wire transfer. 

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      Except
        as
        otherwise provided in the Agreement and notwithstanding the above, the final
        distribution on this Certificate will be made after notice mailed by the
        Trustee
        of the pendency of such distribution and only upon presentation and surrender
        of
        this Certificate at the office or agency of the Trustee specified in such
        notice.

      

      The
        Certificates do not represent a direct obligation of, or an obligation
        guaranteed by, or an interest in, the Company or the Trustee or any affiliate
        thereof. The Certificates are limited in right of payment, all as more
        specifically set forth on the face hereof and in the Agreement. All payments
        or
        distributions made to Certificateholders under the Agreement shall be made
        only
        from the Trust Property and only to the extent that the Trustee shall have
        sufficient income or proceeds from the Trust Property to make such payments
        in
        accordance with the terms of the Agreement. Each Certificateholder of this
        Certificate, by its acceptance hereof, agrees that it will look solely to
        the
        income and proceeds from the Trust Property to the extent available for
        distribution to such Certificateholder as provided in the Agreement. This
        Certificate does not purport to summarize the Agreement and reference is
        made to
        the Agreement for information with respect to the interests, rights, benefits,
        obligations, privileges, and duties evidenced hereby. A copy of the Agreement
        may be examined during normal business hours at the principal office of the
        Trustee, and at such other places, if any, designated by the Trustee, by
        any
        Certificateholder upon request.

      

      The
        Agreement permits, with certain exceptions therein provided, the amendment
        thereof and the modification of the rights and obligations of the Company
        and
        the rights of the Certificateholders under the Agreement at any time by the
        Company and the Trustee with the consent of the Certificateholders holding
        Certificates evidencing Fractional Undivided Interests aggregating not less
        than
        a majority in interest in the Trust. Any such consent by the Certificateholder
        of this Certificate shall be conclusive and binding on such Certificateholder
        and upon all future Certificateholders of this Certificate and of any
        Certificate issued upon the transfer hereof or in exchange hereof or in lieu
        hereof whether or not notation of such consent is made upon this Certificate.
        The Agreement also permits the amendment thereof, in certain limited
        circumstances, without the consent of the Certificateholders of any of the
        Certificates.

      

      As
        provided in the Agreement and subject to certain limitations set forth therein,
        the transfer of this Certificate is registrable in the Register upon surrender
        of this Certificate for registration of transfer at the offices or agencies
        maintained by the Trustee in its capacity as Registrar, or by any successor
        Registrar, duly endorsed or accompanied by a written instrument of transfer
        in
        form satisfactory to the Trustee and the Registrar, duly executed by the
        Certificateholder hereof or such Certificateholder’s attorney duly authorized in
        writing, and thereupon one or more new Certificates of authorized denominations
        evidencing the same aggregate Fractional Undivided Interest in the Trust
        will be
        issued to the designated transferee or transferees.

      

      The
        Certificates are issuable only as registered Certificates without coupons
        in
        minimum denominations of $1,000 Fractional Undivided Interest and integral
        multiples thereof except that one Certificate may be issued in a different
        denomination. As provided in the Agreement and subject to certain limitations
        therein set forth, the Certificates are exchangeable

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      for
        new
        Certificates of authorized denominations evidencing the same aggregate
        Fractional Undivided Interest in the Trust, as requested by the
        Certificateholder surrendering the same.

      

      No
        service charge will be made for any such registration of transfer or exchange,
        but the Trustee shall require payment of a sum sufficient to cover any tax
        or
        governmental charge payable in connection therewith.

      

      Each
        Certificateholder and Investor, by its acceptance of this Certificate or
        a
        beneficial interest herein, agrees to treat the Trust as a grantor trust
        for all
        U.S. federal, state and local income tax purposes.

      

      The
        Trustee, the Registrar, and any agent of the Trustee or the Registrar may
        treat
        the person in whose name this Certificate is registered as the owner hereof
        for
        all purposes, and neither the Trustee, the Registrar, nor any such agent
        shall
        be affected by any notice to the contrary.

      

      The
        obligations and responsibilities created by the Agreement and the Trust created
        thereby shall terminate upon the distribution to Certificateholders of all
        amounts required to be distributed to them pursuant to the Agreement and
        the
        disposition of all property held as part of the Trust Property.

      

      Any
        Person acquiring or accepting this Certificate or an interest herein will,
        by
        such acquisition or acceptance, be deemed to have represented and warranted
        to
        and for the benefit of each Owner Participant and the Company that either:
        (i)
        the assets of an employee benefit plan subject to Title I of the Employee
        Retirement Income Security Act of 1974, as amended (“ERISA”),
        or of
        a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
        (the “Code”),
        have
        not been used to purchase this Certificate or an interest herein or
        (ii) the purchase and holding of this Certificate or an interest herein are
        exempt from the prohibited transaction restrictions of ERISA and the Code
        pursuant to one or more prohibited transaction statutory or administrative
        exemptions.

      

      THE
        AGREEMENT AND THIS CERTIFICATE HAVE BEEN DELIVERED IN THE STATE OF NEW YORK
        AND
        SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
        OF
        NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
        SHALL
        BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      

      Unless
        the certificate of authentication hereon has been executed by the Trustee,
        by
        manual signature, this Certificate shall not be entitled to any benefit under
        the Agreement or be valid for any purpose.

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
        executed.

      

      

                          CONTINENTAL
        AIRLINES PASS
        THROUGH 

                                      TRUST
        2005-ERJ1

      

      By:  WILMINGTON
        TRUST COMPANY,

          as
        Trustee

      

      

      By:_________________________

      Name:

      Title:

      

      

      
 

      
        
          
            

          

          
          

        

        
          A-5

          
            

          

        

        
          
          

          
             

            

          

        

      

      FORM
        OF
        THE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

      

      

      This
        is
        one of the Certificates referred to in the within-mentioned
        Agreement.

      

      

                                
WILMINGTON
        TRUST COMPANY,

                                      as
        Trustee

      

      

       
        By:_________________________ 

       
        Name:

       
        Title:

      

      

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

      

      

      [DTC
        Letter of Representations]

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