Document:

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                       TRUST INDENTURE AND MORTGAGE [___]

                        Dated as of [____________, 20___]

                                     Between

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

                                  Owner Trustee

                                       and

                            WILMINGTON TRUST COMPANY,
                         not in its individual capacity,
                       except as expressly stated herein,
                            but solely as Mortgagee,

                                    Mortgagee

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                            EQUIPMENT NOTES COVERING
                         ONE BOEING [________] AIRCRAFT
                     BEARING U.S. REGISTRATION MARK N[_____]
                      LEASED BY CONTINENTAL AIRLINES, INC.

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<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE I

                                   DEFINITIONS

                                   ARTICLE II

                               THE EQUIPMENT NOTES

SECTION 2.01.   Form of Equipment Notes........................................7
SECTION 2.02.   Issuance and Terms of Equipment Notes.........................13
SECTION 2.03.   Payments from Trust Indenture Estate Only.....................16
SECTION 2.04.   Method of Payment.............................................17
SECTION 2.05.   Application of Payments.......................................19
SECTION 2.06.   Termination of Interest in Trust Indenture Estate.............20
SECTION 2.07.   Registration Transfer and Exchange of Equipment Notes.........20
SECTION 2.08.   Mutilated, Destroyed, Lost or Stolen Equipment Notes..........21
SECTION 2.09.   Payment of Expenses on Transfer; Cancellation.................22
SECTION 2.10.   Mandatory Redemptions of Equipment Notes......................22
SECTION 2.11.   Voluntary Redemptions of Equipment Notes......................22
SECTION 2.12.   Redemptions; Notice of Redemption.............................23
SECTION 2.13.   Option to Purchase Equipment Notes............................23
SECTION 2.14.   Subordination.................................................24

                                   ARTICLE III

          RECEIPT, DISTRIBUTION AND APPLICATION OFINCOME FROM THE TRUST
                                INDENTURE ESTATE

SECTION 3.01.   Basic Rent Distribution.......................................25
SECTION 3.02.   Event of Loss; Replacement; Voluntary Termination; Optional
                Redemption....................................................26
SECTION 3.03.   Payments After Event of Default...............................27
SECTION 3.04.   Certain Payments..............................................30
SECTION 3.05.   Other Payments................................................30
SECTION 3.06.   Payments to Owner Trustee.....................................31

                                   ARTICLE IV

            COVENANTS OF OWNER TRUSTEE; EVENTS OFDEFAULT; REMEDIES OF
                                   MORTGAGEE

SECTION 4.01.   Covenants of Owner Trustee....................................31
SECTION 4.02.   Event of Default..............................................32
SECTION 4.03.   Certain Rights................................................34

<PAGE>
                                TABLE OF CONTENTS
                                   (Continued)

                                                                            PAGE

SECTION 4.04.   Remedies......................................................36
SECTION 4.05.   Return of Aircraft, Etc.......................................38
SECTION 4.06.   Remedies Cumulative...........................................39
SECTION 4.07.   Discontinance of Proceedings..................................40
SECTION 4.08.   Waiver of Past Defaults.......................................40
SECTION 4.09.   Appointment of Receiver.......................................40
SECTION 4.10.   Mortgagee Authorized to Execute Bills of Sale, Etc............40
SECTION 4.11.   Rights of Note Holders to Receive Payment.....................41

                                    ARTICLE V

                             DUTIES OF THE MORTGAGEE

SECTION 5.01.   Notice of Event of Default....................................41
SECTION 5.02.   Action Upon Instructions; Certain Rights and Limitations......41
SECTION 5.03.   Indemnification...............................................44
SECTION 5.04.   No Duties Except as Specified in Trust Indenture or
                Instructions..................................................45
SECTION 5.05.   No Action Except Under Lease, Trust Indenture or
                Instructions..................................................45
SECTION 5.06.   Replacement Airframes and Replacement Engines.................45
SECTION 5.07.   Indenture Supplements for Replacements........................46
SECTION 5.08.   Effect of Replacement.........................................46
SECTION 5.09.   Investment of Amounts Held by Mortgagee.......................46

                                   ARTICLE VI

                       THE OWNER TRUSTEE AND THE MORTGAGEE

SECTION 6.01.   Acceptance of Trusts and Duties...............................47
SECTION 6.02.   Absence of Duties.............................................47
SECTION 6.03.   No Representations or Warranties as to Aircraft or
                Documents.....................................................48
SECTION 6.04.   No Segregation of Monies; No Interest.........................48
SECTION 6.05.   Reliance; Agreements; Advice of Counsel.......................49
SECTION 6.06.   Capacity in Which Acting......................................49
SECTION 6.07.   Compensation..................................................49
SECTION 6.08.   Instructions from Note Holders................................50

                                   ARTICLE VII

                  INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE

SECTION 7.01.   Scope of Indemnification......................................50

<PAGE>
                                TABLE OF CONTENTS
                                  (Continued)

                                                                            PAGE

                                  ARTICLE VIII

                         SUCCESSOR AND SEPARATE TRUSTEES

SECTION 8.01.   Notice of Successor Owner Trustee.............................51
SECTION 8.02.   Resignation of Mortgagee; Appointment of Successor............51
SECTION 8.03.   Appointment of Additional and Separate Trustees...............52

                                   ARTICLE IX

           SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTUREAND OTHER
                                   DOCUMENTS

SECTION 9.01.   Instructions of Majority; Limitations.........................54
SECTION 9.02.   Trustees Protected............................................55
SECTION 9.03.   Documents Mailed to Note Holders..............................56
SECTION 9.04.   No Request Necessary for Lease Supplement or Trust Indenture
                Supplement....................................................56

                                    ARTICLE X

                                  MISCELLANEOUS

SECTION 10.01.  Termination of Trust Indenture................................56
SECTION 10.02.  No Legal Title to Trust Indenture Estate in Note Holders......57
SECTION 10.03.  Sale of Aircraft by Mortgagee Is Binding......................57
SECTION 10.04.  Trust Indenture for Benefit of Owner Trustee, Mortgagee, Owner
                Participant, Note Holders and Other Holders of Secured
                Obligations...................................................57
SECTION 10.05.  Notices.......................................................57
SECTION 10.06.  Severability..................................................58
SECTION 10.07.  No Oral Modification or Continuing Waivers....................58
SECTION 10.08.  Successors and Assigns........................................58
SECTION 10.09.  Headings......................................................58
SECTION 10.10.  Normal Commercial Relations...................................58
SECTION 10.11.  Governing Law; Counterpart Form...............................59
SECTION 10.12.  Voting By Note Holders........................................59
SECTION 10.13.  Bankruptcy....................................................59

EXHIBIT A       Form of Trust Indenture and Mortgage Supplement

SCHEDULE I      Equipment Notes Amortization and Interest Rates

<PAGE>

                       TRUST INDENTURE AND MORTGAGE [___]

            TRUST INDENTURE AND MORTGAGE [___], dated as of [___________, 20___]
("Trust Indenture"), between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "Mortgagee").

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

            WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;

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

            WHEREAS, the parties hereto desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee of the Series
of Equipment Notes specified on Schedule I hereto (it being understood that not
all Series may be issued, in which case references in this Trust Indenture to
Series not issued shall be disregarded) and (ii) to provide for the assignment,
mortgage and pledge by the Owner Trustee to the Mortgagee, as part of the Trust
Indenture Estate hereunder, among other things, of all of the Owner Trustee's
right, title and interest in and to the Aircraft and, except as hereinafter
expressly provided, all of the Owner Trustee's right, title and interest in, to
and under the Lease and the Participation Agreement and all payments and other
amounts received hereunder or thereunder in accordance with the terms hereof or
thereof, as security for, among other things, the Owner Trustee's obligations to
the Note Holders;

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

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

                                GRANTING CLAUSE

            NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that,
to secure the prompt payment of the Original Amount of, interest on, Make-Whole

<PAGE>

Amount, if any, and all other amounts due with respect to, all Equipment Notes
from time to time outstanding hereunder according to their tenor and effect and
to secure the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions contained herein and in the Participation
Agreement and the Equipment Notes, for the benefit of the Note Holders, the Loan
Participants and other holders of Secured Obligations and the prompt payment of
all amounts from time to time owing hereunder and under Participation Agreement
to the Loan Participants, the Note Holders and/or other holders of Secured
Obligations by the Owner Trustee and for the uses and purposes and subject to
the terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
holders thereof, and for other good and valuable consideration the receipt and
adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors in trust and
assigns, for the security and benefit of the Loan Participants, the Note Holders
and other holders of Secured Obligations, a first priority security interest in
and mortgage lien on all right, title and interest of the Owner Trustee in, to
and under the following described property, rights and privileges, whether now
or hereafter acquired, other than Excluded Payments (which, collectively,
excluding Excluded Payments but including all property hereafter specifically
subject to the Lien of this Trust Indenture by the terms hereof or any
supplement hereto, are included within, and are referred to as, the "Trust
Indenture Estate"), to wit:

          (1) The Airframe which is one Boeing [______] aircraft with the FAA
     Registration number of N[_____] and the manufacturer's serial number of
     [_______] and [_________] Engines with the manufacturer's serial numbers of
     [_____ and _____], each of which Engines is a [_______________________]
     engine and is of 750 or more rated takeoff horsepower or the equivalent of
     such horsepower (such Airframe and Engines more particularly described in
     the Indenture Supplement executed and delivered as provided herein) as the
     same is now and will hereafter be constituted, whether now owned by the
     Owner Trustee or hereafter acquired, leased or intended to be leased under
     the Lease, and in the case of such Engines, whether or not any such Engine
     shall be installed in or attached to the Airframe or any other airframe,
     together with (a) all Parts of whatever nature, which are from time to time
     included within the definitions of "Airframe" or "Engines", whether now
     owned or hereafter acquired, including all substitutions, renewals and
     replacements of and additions, improvements, accessions and accumulations
     to the Airframe and Engines (other than additions, improvements, accessions
     and accumulations which constitute appliances, parts, instruments,
     appurtenances, accessories, furnishings or other equipment excluded from
     the definition of Parts) and (b) all Aircraft Documents;

          (2) All right, title, interest, claims and demands of the Owner
     Trustee, as Lessor, in, to and under the Lease, together with all rights,
     powers, privileges, options and other benefits of the Owner Trustee as
     lessor under the Lease, including the immediate and continuing right to
     receive and collect all Rent, income, revenues, issues, profits, insurance
     proceeds, condemnation awards and other payments, tenders and security now
     or hereafter payable to or receivable by the Lessor under the Lease
     pursuant thereto, and, subject to Section 5.02 hereof, the right to make

<PAGE>

     all waivers and agreements, to give and receive copies of all notices and
     other instruments or communications, to accept surrender or redelivery of
     the Aircraft or any part thereof, as well as all the rights, powers and
     remedies on the part of the Owner Trustee as Lessor under the Lease, to
     take such action upon the occurrence of a Lease Event of Default
     thereunder, including the commencement, conduct and consummation of legal,
     administrative or other proceedings, as shall be permitted by the Lease or
     by Law, and to do any and all other things whatsoever which the Owner
     Trustee or any lessor is or may be entitled to do under or in respect of
     the Lease and any right to restitution from the Lessee or any other Person
     in respect of any determination of invalidity of the Lease;

          [(3)] Each Permitted Sublease assignment and each assigned Permitted
     Sublease (to the extent assigned under such Permitted Sublease assignment),
     and including, without limitation, all rents or other payments of any kind
     made under such assigned Permitted Sublease (to the extent assigned under
     such Permitted Sublease assignment);]<F1>

          [(3)/(4)] All right, title, interest, claims and demands of the Owner
     Trustee in, to and under:

            (a) the Purchase Agreement and the GTA;

            (b) the Purchase Agreement Assignment, with the Consent and
Agreement and the Engine Consent and Agreement attached thereto;

            (c) the Bills of Sale; and

            (d) any and all other contracts, agreements and instruments relating
to the Airframe and Engines or any rights or interests therein to which the
Owner Trustee is now or may hereafter be a party;

          together with all rights, powers, privileges, licenses, easements,
     options and other benefits of the Owner Trustee under each contract,
     agreement and instrument referred to in this clause [(3)/(4)], including
     the right to receive and collect all payments to the Owner Trustee
     thereunder now or hereafter payable to or receivable by the Owner Trustee
     pursuant thereto and, subject to Section 5.02 hereof, the right to make all
     waivers and agreements, to give and receive notices and other instruments
     or communications, or to take any other action under or in respect of any
     thereof or to take such action upon the occurrence of a default thereunder,
     including the commencement, conduct and consummation of legal,
     administrative or other proceedings, as shall be permitted thereby or by
     Law, and to do any and all other things which the Owner Trustee is or may
     be entitled to do thereunder and any right to restitution from the Lessee,

--------------
<F1>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
<PAGE>

     the Owner Participant or any other Person in respect of any determination
     of invalidity of any thereof;

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

          [(5)/(6)] Without limiting the generality of the foregoing, all
     insurance and requisition proceeds with respect to the Aircraft or any part
     thereof, including the insurance required under Section 11 of the Lease;

          [(6)/(7)] Without limiting the generality of the foregoing, all rights
     of the Owner Trustee to amounts paid or payable by Lessee to the Owner
     Trustee under the Participation Agreement and all rights of the Owner
     Trustee to enforce payments of any such amounts thereunder;

          [(7)/(8)] Without limiting the generality of the foregoing, all monies
     and securities from time to time deposited or required to be deposited with
     the Mortgagee pursuant to any terms of this Trust Indenture or the Lease or
     required hereby or by the Lease to be held by the Mortgagee hereunder as
     security for the obligations of the Lessee under the Lease or of the Owner
     Trustee hereunder; and

          [(8)/(9)] All proceeds of the foregoing; excluding, however, in all
     events from each of foregoing clauses (1) through [(8)/(9)] inclusive all
     Excluded Payments and the right to specifically enforce the same or to sue
     for damages for the breach thereof as provided in Section 5.02 hereof.

            Concurrently with the delivery of this Trust Indenture, the Owner
Trustee will deliver to the Mortgagee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement, the Purchase
Agreement and the GTA (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, with the Consent and Agreement
and the Engine Consent and Agreement attached thereto.

            TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participants, the Note Holders
and the other holders of Secured Obligations, except as provided in Section 2.14
and Article III hereof without any preference, distinction or priority of any
one Equipment Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and in all cases and as to all property specified
in clauses (1) through [(8)/(9)] inclusive above, subject to the terms and
provisions set forth in this Trust Indenture.

            It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under the

<PAGE>

Indenture Agreements, to perform all of the obligations assumed by it
thereunder, except to the extent prohibited or excluded from doing so pursuant
to the terms and provisions thereof, and the Mortgagee, the Loan Participants,
the Note Holders and the other holders of Secured Obligations shall have no
obligation or liability under the Indenture Agreements, by reason of or arising
out of the assignment hereunder, nor shall the Mortgagee, the Loan Participants,
the Note Holders or the other holders of Secured Obligations be required or
obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Agreements, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or present or file any claim, or
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.

            The Owner Trustee does hereby constitute the Mortgagee the true and
lawful attorney of the Owner Trustee, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Owner Trustee or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition proceeds
but in all cases excluding Excluded Payments) due and to become due under or
arising out of the Indenture Agreements, and all other property which now or
hereafter constitutes part of the Trust Indenture Estate, to endorse any checks
or other instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Mortgagee may deem
to be necessary or advisable in the premises. Without limiting the generality of
the foregoing, but subject to the rights of the Owner Trustee and the Owner
Participant under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
of any Event of Default under this Trust Indenture, the Mortgagee shall have the
right under such power of attorney to accept any offer in connection with the
exercise of remedies as set forth herein of any purchaser to purchase the
Airframe and Engines and upon such purchase to execute and deliver in the name
of and on behalf of the Owner Trustee an appropriate bill of sale and other
instruments of transfer relating to the Airframe and Engines, when purchased by
such purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of the
Owner Trustee or otherwise, which the Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Mortgagee in and to such Rents and other sums and the security intended to be
afforded hereby; PROVIDED, HOWEVER, that no action of the Mortgagee pursuant to
this paragraph shall increase the obligations or liabilities of the Owner
Trustee to any Person beyond those obligations and liabilities specifically set
forth in this Trust Indenture and in the other Operative Agreements. Under the
Lease, Lessee is directed, so long as this Trust Indenture shall not have been
fully discharged, to make all payments of Rent (other than Excluded Payments)
and all other amounts which are required to be paid to or deposited with the
Owner Trustee pursuant to the Lease (other than Excluded Payments) directly to,
or as directed by, the Mortgagee at such address or addresses as the Mortgagee
shall specify, for application as provided in this Trust Indenture. The Owner
Trustee agrees that promptly upon receipt thereof, it will transfer to the
Mortgagee any and all monies from time to time received by it constituting part
of the Trust Indenture Estate, for distribution by the Mortgagee pursuant to
this Trust Indenture, except that the Owner Trustee shall accept for
distribution pursuant to the Trust Agreement any amounts distributed to it by
the Mortgagee under this Trust Indenture.

<PAGE>

            The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Mortgagee, the Owner Trustee will promptly and
duly execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Mortgagee may reasonably deem
necessary or desirable to perfect, preserve or protect the mortgage, security
interests and assignments created or intended to be created hereby or to obtain
for the Mortgagee the full benefits of the assignment hereunder and of the
rights and powers herein granted.

            The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 10.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Mortgagee,
and that it will not, except as otherwise provided in this Trust Indenture and
except with respect to Excluded Payments to which it is entitled, (i) accept any
payment from Lessee [or any Permitted Sublessee]<F2> under any Indenture
Agreement, (ii) enter into any agreement amending or supplementing any Indenture
Agreement, (iii) execute any waiver or modification of, or consent under, the
terms of, or exercise any rights, powers or privileges under, any Indenture
Agreement, (iv) settle or compromise any claim arising under any Indenture
Agreement or (v) submit or consent to the submission of any dispute, difference
or other matter arising under or in respect of any Indenture Agreement to
arbitration thereunder.

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

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

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

            It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall IPSO FACTO, and without any other conveyance, assignment or

--------------
<F2>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
<PAGE>

act on the part of the Owner Trustee or the Mortgagee, become and be subject to
the Lien herein granted as fully and completely as though specifically described
herein, but nothing contained in this paragraph shall be deemed to modify or
change the obligations of the Owner Trustee contained in the foregoing
paragraphs.

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

            Notwithstanding the Granting Clause or any of the preceding
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments. Further,
nothing in the Granting Clause or the preceding paragraphs shall impair any of
the rights of the Owner Trustee or the Owner Participant under Section 2.13,
4.03, 4.04, 4.08, 5.02 or 5.03 hereof.

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

                                   ARTICLE I

                                   DEFINITIONS

            Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A to the Lease.

                                   ARTICLE II

                               THE EQUIPMENT NOTES

     SECTION 2.01 FORM OF EQUIPMENT NOTES.

            The Equipment Notes shall be substantially in the form set forth
below:

            THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES
LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS
EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.

            WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE
UNDER TRUST AGREEMENT [___] DATED AS OF [_______________, 20___]. SERIES [_____]
LIMITED RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE BOEING
MODEL [_______] AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N[_____].

No. ____                                              Date: [ __________, 20___]

<PAGE>

                            $_____________________

   INTEREST RATE                                                 MATURITY DATE
   -------------                                                 -------------
  [____________]                                                 [____________]

            WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity called
the "Owner Trustee") under that certain Trust Agreement [___], dated as of
[____________, 20___], between the Owner Participant named therein and Wells
Fargo Bank Northwest, National Association (herein as such Trust Agreement may
be supplemented or amended from time to time called the "Trust Agreement"),
hereby promises to pay to __________________, or the registered assignee
thereof, the principal sum of $____________ (the "Original Amount"), together
with interest on the amount of the Original Amount remaining unpaid from time to
time (calculated on the basis of a year of 360 days comprised of twelve 30-day
months) from the date hereof until paid in full at a rate per annum equal to the
Debt Rate. The Original Amount of this Equipment Note shall be [payable in
installments on the dates set forth in Schedule I hereto equal to the
corresponding percentage of the Original Amount of this Equipment Note set forth
in Schedule I hereto.]<F3> [paid in full on ____________.]<F4> Accrued but
unpaid interest shall be due and payable in semiannual installments commencing
on [_____________, 20___], and thereafter on [_______] and [_______] of each
year, to and including [_______________]. Notwithstanding the foregoing, the
final payment made on this Equipment Note shall be in an amount sufficient to
discharge in full the unpaid Original Amount and all accrued and unpaid interest
on, and any other amounts due under, this Equipment Note. Notwithstanding
anything to the contrary contained herein, if any date on which a payment under
this Equipment Note becomes due and payable is not a Business Day, then such
payment shall not be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment during such
extension.

            For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage [___], dated as of [_____________, 20___], between the
Owner Trustee and Wilmington Trust Company (the "Mortgagee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.

            This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole

--------------
<F3>
Not included in Series A-2 Equipment Notes.
<F4>
To be inserted in the case of a Series A-2 Equipment Note.
<PAGE>

Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).

            All payments of Original Amount, interest, Make-Whole Amount, if
any, and other amounts, if any, to be made by the Owner Trustee hereunder and
under the Trust Indenture or the Participation Agreement shall be payable only
from the income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Trust Indenture Estate to enable the Mortgagee to make such payments in
accordance with the terms of Section 2.03 and Article III of the Trust
Indenture, and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee and
the Mortgagee is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Equipment Note or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; PROVIDED,
HOWEVER, that nothing herein contained shall limit, restrict or impair the right
of the Mortgagee, subject always to the terms and provisions of the Trust
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Event of Default under the Trust Indenture in accordance with Section 4.04(b)
of the Trust Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Trust
Indenture Estate and to exercise all rights and remedies provided under the
Trust Indenture or otherwise realize upon the Trust Indenture Estate as provided
under the Trust Indenture.

            There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate Trust
Office of the Mortgagee or at the office of any successor in the manner provided
in Section 2.07 of the Trust Indenture.

            The Original Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Mortgagee, or as otherwise provided in the Trust Indenture.
Each such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in the case of any
final payment with respect to this Equipment Note, the Equipment Note shall be
surrendered promptly thereafter to the Mortgagee for cancellation.

            The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of the Original
Amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied, FIRST, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, or, to the extent permitted by Law, any overdue interest and
other amounts hereunder) to the date of such payment, SECOND, to the payment of
the Original Amount of this Equipment Note then due, THIRD, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and FOURTH, the balance, if any, remaining thereafter, to the payment

<PAGE>

of installments of the Original Amount of this Equipment Note remaining unpaid
in the inverse order of their maturity.

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

            As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate Original Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.

            Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Mortgagee shall treat the person in
whose name this Equipment Note is registered as the owner hereof for all
purposes, whether or not this Equipment Note be overdue, and neither the Owner
Trustee nor the Mortgagee shall be affected by notice to the contrary.

            This Equipment Note is subject to redemption as provided in Sections
2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This Equipment
Note is also subject to exchange and to purchase by the Owner Participant or the
Owner Trustee as provided in Section 2.13 of the Trust Indenture but not
otherwise. In addition, this Equipment Note may be accelerated as provided in
Section 4.04 of the Trust Indenture.

            [The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the Trust Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Trust Indenture) in respect of [Series A-1 and Series A-2
Equipment Notes]<F5> [Series A-1, Series A-2 and Series B Equipment Notes]<F6>
[Series A-1, Series A-2, Series B and Series C Equipment Notes],<F7> and this
Equipment Note is issued subject to such provisions. The Note Holder of this
Equipment Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Mortgagee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as

--------------
<F5>
To be inserted in the case of a Series B Equipment Note.
<F6>
To be inserted in the case of a Series C Equipment Note.
<F7>
To be inserted in the case of a Series D Equipment Note.
<PAGE>

provided in the Trust Indenture and (c) appoints the Mortgagee his
attorney-in-fact for such purpose.]<F8>

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

            THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

                                     * * *

--------------
<F8>
To be inserted for each Equipment Note other than any Series A-1 or Series A-2
Equipment Note.
<PAGE>

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

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

                                               By:______________________________
                                                  Name:
                                                  Title:

<PAGE>

                    MORTGAGEE'S CERTIFICATE OF AUTHENTICATION

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

                                              WILMINGTON TRUST COMPANY, as
                                              Mortgagee

                                               By_______________________________
                                                 Name:
                                                 Title:

                                  SCHEDULE I<F9>

                          EQUIPMENT NOTE AMORTIZATION

                                                         Percentage of
                                                        Original Amount
    Payment Date                                           to be Paid
-----------------------------------          -----------------------------------

                       [SEE SCHEDULE I TO TRUST INDENTURE

                        WHICH IS INSERTED UPON ISSUANCE]

                                     * * *

     SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES.

            The Equipment Notes shall be dated the date of issuance thereof,
shall be issued in up to six separate series consisting of Series A-1, Series
A-2, Series B, Series C and Series D and in the maturities and principal amounts
and shall bear interest as specified in Schedule I hereto. On the date of the
consummation of the Transaction, each Equipment Note shall be issued to the
Subordination Agent on behalf of the Applicable Pass Through Trustees under the

-------------
<F9>
Not included in Series A-2 Equipment Notes.
<PAGE>

Applicable Pass Through Trust Agreements. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations of
$1,000 and integral multiples thereof, except that one Equipment Note of each
Series may be in an amount that is not an integral multiple of $1,000.

            Each Equipment Note shall bear interest at the Debt Rate (calculated
on the basis of a year of 360 days comprised of twelve 30-day months) on the
unpaid Original Amount thereof from time to time outstanding, payable in arrears
on [_____________, 20___], and on each [_______] and [_______] thereafter until
maturity. The Original Amount of each Equipment Note (i) in the case of
Equipment Notes other than Series A-2 Equipment Notes, shall be payable on the
dates and in the installments equal to the corresponding percentage of the
Original Amount as set forth in Schedule I hereto which shall be attached as
Schedule I to such Equipment Notes, and (ii) in the case of Series A-2 Equipment
Notes, shall be payable in full on [__________]. Notwithstanding the foregoing,
the final payment made under each Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Original Amount and all accrued and
unpaid interest on, and any other amounts due under, such Equipment Note. Each
Equipment Note shall bear interest at the Payment Due Rate (calculated on the
basis of a year of 360 days comprised of twelve 30-day months) on any part of
the Original Amount, Make-Whole Amount, if any, and, to the extent permitted by
applicable Law, interest and any other amounts payable thereunder not paid when
due for any period during which the same shall be overdue, in each case for the
period the same is overdue. Amounts shall be overdue if not paid when due
(whether at stated maturity, by acceleration or otherwise). Notwithstanding
anything to the contrary contained herein, if any date on which a payment under
any Equipment Note becomes due and payable is not a Business Day then such
payment shall not be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment during such
extension.

            The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) any and all indemnity amounts which are
payable by the Lessee to (x) WTC and the Mortgagee, (y) each separate or
additional Trustee appointed pursuant to the Trust Indenture and (z) the Pass
Through Indemnitees pursuant to Section 9 of the Participation Agreement; (ii)
to the extent not payable (whether or not in fact paid) under Section 6(a) of
the Note Purchase Agreement (as originally in effect or amended with the consent
of the Owner Participant), an amount equal to the fees payable to the Liquidity
Provider under Section 2.03 of each Liquidity Facility and the related Fee
Letter (as defined in the Intercreditor Agreement) multiplied by a fraction the
numerator of which shall be the then outstanding aggregate principal amount of
the Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes and the denominator of which shall be the
then outstanding aggregate principal amount of all "Series A-1 Equipment Notes",
"Series A-2 Equipment Notes", "Series B Equipment Notes" and "Series C Equipment
Notes" (each as defined in the Note Purchase Agreement); (iii) (x) the amount
equal to interest on any Downgrade Advance (other than any Applied Downgrade
Advance) payable under Section 3.07 of each Liquidity Facility minus Investment
Earnings from such Downgrade Advance multiplied by (y) the fraction specified in

<PAGE>

the foregoing clause (ii); (iv) (x) the amount equal to interest on any
Non-Extension Advance (other than any Applied Non-Extension Advance) payable
under Section 3.07 of each Liquidity Facility minus Investment Earnings from
such Non-Extension Advance multiplied by (y) the fraction specified in the
foregoing clause (ii); (v) any amounts owed to the Liquidity Providers by the
Subordination Agent as borrower under the second sentence of Section 7.05 of
each Liquidity Facility (other than as a result of any "prohibited transaction"
within the meaning of Section 406 of the Employee Retirement Income Security Act
of 1974, as amended, or Section 4975(c)(1) of the Internal Revenue Code of 1986,
as amended) multiplied by the fraction specified in the foregoing clause (ii);
and (vi) if any payment default shall have occurred and be continuing with
respect to interest on any Series A-1 Equipment Notes, Series A-2 Equipment
Notes, Series B Equipment Notes or Series C Equipment Notes, (x) the excess, if
any, of (1) the amount equal to interest on any Unpaid Advance, Applied
Downgrade Advance or Applied Non-Extension Advance payable under Section 3.07 of
each Liquidity Facility OVER (2) the sum of Investment Earnings from any Final
Advance plus any amount of interest at the Payment Due Rate actually payable
(whether or not in fact paid) by the Owner Trustee on the overdue scheduled
interest on the Equipment Notes in respect of which such Unpaid Advance, Applied
Downgrade Advance or Applied Non-Extension Advance was made, multiplied by (y) a
fraction the numerator of which shall be the then aggregate overdue amounts of
interest on the Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and
the denominator of which shall be the then aggregate overdue amounts of interest
on all "Series A-1 Equipment Notes", "Series A-2 Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (each as defined in the Note
Purchase Agreement) (other than interest becoming due and payable solely as a
result of acceleration of any such "Equipment Notes"). For purposes of this
paragraph, the terms "Applied Downgrade Advance", "Applied Non-Extension
Advance", "Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall have
the meanings specified in each Liquidity Facility or the Intercreditor Agreement
referred to therein.

            The Equipment Notes shall be executed on behalf of the Owner Trustee
by its President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing the
signatures of individuals who were at any time the proper officers of the Owner
Trustee shall bind the Owner Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the respective
dates of such Equipment Notes. The Owner Trustee may from time to time execute
and deliver Equipment Notes with respect to the Aircraft to the Mortgagee for
authentication upon original issue and such Equipment Notes shall thereupon be
authenticated and delivered by the Mortgagee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or other
authorized officer of the Owner Trustee; PROVIDED, HOWEVER, that each such
request shall specify the aggregate Original Amount of all Equipment Notes to be
authenticated hereunder on original issue with respect to the Aircraft. No
Equipment Note shall be secured by or entitled to any benefit under this Trust
Indenture or be valid or obligatory for any purposes, unless there appears on
such Equipment Note a certificate of authentication in the form provided for
herein executed by the Mortgagee by the manual signature of one of its
authorized officers and such certificate upon any Equipment Notes be conclusive
evidence, and the only evidence, that such Equipment Note has been duly
authenticated and delivered hereunder.

<PAGE>

            The aggregate Original Amount of the Equipment Notes issued
hereunder shall not exceed [__]% of Lessor's Cost.

     SECTION 2.03. PAYMENTS FROM TRUST INDENTURE ESTATE ONLY.

            (a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this Trust
Indenture, each Note Holder, by its acceptance of an Equipment Note, agrees that
as between it and the Owner Trustee, except as expressly provided in this Trust
Indenture, the Participation Agreement or any other Operative Agreement, (i) the
obligation to make all payments of the Original Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to the
Equipment Notes, and the performance by the Owner Trustee of every obligation or
covenant contained in this Trust Indenture and in the Participation Agreement or
any of the other Operative Agreements, shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the Trust Indenture
Estate and only to the extent that the Owner Trustee shall have sufficient
income or proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Mortgagee to make such payments in accordance
with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Trust Indenture and any agreement referred
to herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this Trust
Indenture or such other agreements to the contrary notwithstanding (except for
any express provisions or representations that the Owner Trustee is responsible
for, or is making, in its individual capacity, for which there would be personal
liability of the Owner Trustee), no recourse shall be had with respect to this
Trust Indenture or such other agreements against the Owner Trustee in its
individual capacity or against any institution or person which becomes a
successor trustee or co-trustee or any officer, director, trustee, servant or
direct or indirect parent or controlling Person or Persons of any of them, and
(ii) none of the Owner Trustee, in its individual capacity, the Owner
Participant, the Mortgagee and any officer, director, trustee, servant,
employee, agent or direct or indirect parent or controlling Person or Persons of
any of them shall have any personal liability for any amounts payable hereunder,
under the Participation Agreement or any of the other Operative Agreements or
under the Equipment Notes except as expressly provided herein, in the Lease or
in the Participation Agreement; PROVIDED, HOWEVER, that nothing contained in
this Section 2.03(a) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Trust Indenture or such other agreements of
rights and remedies against the Trust Indenture Estate. These provisions are not
intended as any release or discharge of the indebtedness represented by the
Equipment Notes and the Trust Indenture, but are intended only as a covenant not
to sue the Owner Participant, the Owner Trustee or the Mortgagee in their
individual capacities, except as expressly provided herein or in the
Participation Agreement, for a deficiency with respect to such indebtedness, the
indebtedness represented by this Trust Indenture and the Equipment Notes to
remain in full force and effect as fully as though these provisions were not
contained in this Trust Indenture. The Owner Trustee hereby acknowledges that
the Note Holders have expressly reserved all their rights and remedies against
the Trust Indenture Estate, including the right, in the event of a default in
the payment of all or part of the Original Amount of, interest on, Make-Whole
Amount, if any, or any other amount due with respect to any Equipment Note

<PAGE>

within the periods provided for in Section 4.02(b) hereof, or upon the
occurrence and continuation of any other Event of Default under this Trust
Indenture, to foreclose upon this Trust Indenture, and/or to receive the
proceeds from the Trust Indenture Estate and otherwise to enforce any other
right under this Trust Indenture. Nothing in this Section 2.03(a) shall (x)
release the Owner Participant from personal liability, or constitute a covenant
not to sue the Owner Participant, for any breach by it of any of its covenants,
representations or warranties contained in the Participation Agreement or for
any of the payments it has agreed to make pursuant to the Participation
Agreement or (y) release the Owner Trustee or constitute a covenant not to sue
the Owner Trustee for any breach by it of any representations, warranties or
covenants of the Owner Trustee contained in the Operative Agreements or (z)
release the Owner Trustee in its individual capacity from personal liability, or
constitute a covenant not to sue the Owner Trustee in its individual capacity
for any breach by it of any representations, warranties or covenants of the
Owner Trustee made in its individual capacity in the Operative Agreements.

            (b) If (i) all or any part of the Trust Estate becomes the property
of, or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code, the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to any Note Holder or the
Mortgagee, directly or indirectly (other than the recourse liability of the
Owner Trustee (in its individual capacity) or the Owner Participant under the
Participation Agreement, the Lease or this Trust Indenture or by separate
agreement), to make payment on account of any amount payable as principal,
Make-Whole Amount, if any, interest or other amounts on the Equipment Notes and
(iii) any Note Holder or the Mortgagee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of clause (ii) above,
then such Note Holder or the Mortgagee, as the case may be, shall promptly
refund to the Owner Trustee (in its individual capacity) or the Owner
Participant (whichever shall have made such payment) such Excess Amount.

            For purposes of this Section 2.03(b), "Excess Amount" means the
amount by which such payment exceeds the amount that would have been received by
a Note Holder or the Trustee if the Owner Trustee (in its individual capacity)
or the Owner Participant had not become subject to the recourse liability
referred to in clause (ii) above. Nothing contained in this Section 2.03(b)
shall prevent a Note Holder or the Mortgagee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under the Participation
Agreement, the Lease or this Trust Indenture (and any exhibits or annexes hereto
or thereto) or from retaining any amount paid by Owner Participant under Section
2.13 or 4.03 hereof.

     SECTION 2.04. METHOD OF PAYMENT.

            (a) The Original Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 12:30
p.m., New York City time, on the due date of payment to the Mortgagee at the
Corporate Trust Office for distribution among the Note Holders in the manner

<PAGE>

provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, the Mortgagee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder's Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed pursuant to
Article III of this Trust Indenture) by transferring, or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 2:00 p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United States
the amount to be distributed to such holder, for credit to the account of such
holder maintained at such bank. If the Mortgagee shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, the Mortgagee, in its
individual capacity and not as trustee, agrees to compensate such holders for
loss of use of funds at the Debt Rate until such payment is made and the
Mortgagee shall be entitled to any interest earned on such funds until such
payment is made. Any payment made hereunder shall be made without any
presentment or surrender of any Equipment Note, except that, in the case of the
final payment in respect of any Equipment Note, such Equipment Note shall be
surrendered to the Mortgagee for cancellation promptly after such payment.
Notwithstanding any other provision of this Trust Indenture to the contrary, the
Mortgagee shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for the
Mortgagee to do so in view of the time of day when the funds to be so
transferred were received by it if such funds were received after 12:30 p.m.,
New York City time, at the place of payment. Prior to the due presentment for
registration of transfer of any Equipment Note, the Owner Trustee and the
Mortgagee shall deem and treat the Person in whose name any Equipment Note is
registered on the Equipment Note Register as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts payable
with respect to such Equipment Note and for all other purposes, and none of the
Owner Trustee or the Mortgagee shall be affected by any notice to the contrary.
So long as any signatory to the Participation Agreement or nominee thereof shall
be a registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Mortgagee
consistent with this Section 2.04.

            (b) The Mortgagee, as agent for the Owner Trustee, shall exclude and
withhold at the appropriate rate from each payment of Original Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (and such exclusion and withholding shall constitute payment
in respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by Law. The Mortgagee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
United States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner Trustee and the Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary evidence
as any such Note Holder may reasonably request from time to time.

<PAGE>

            If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form 1001 or W-8 (or such successor form or forms as may be
required by the United States Treasury Department) during the calendar year in
which the payment hereunder or under the Equipment Note(s) held by such holder
is made (but prior to the making of such payment), or in either of the two
preceding calendar years, and has not notified the Mortgagee of the withdrawal
or inaccuracy of such form prior to the date of such payment (and the Mortgagee
has no reason to believe that any information set forth in such form is
inaccurate), the Mortgagee shall withhold only the amount, if any, required by
Law (after taking into account any applicable exemptions properly claimed by the
Note Holder) to be withheld from payments hereunder or under the Equipment Notes
held by such holder in respect of United States federal income tax. If a Note
Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
W-8ECI in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made (but prior to the making of any payment
for such year), and has not notified the Mortgagee of the withdrawal or
inaccuracy of such certificate or form prior to the date of such payment (and
the Mortgagee has no reason to believe that any information set forth in such
form is inaccurate) or (y) which is a U.S. Person has furnished to the Mortgagee
a properly completed, accurate and currently effective U.S. Internal Revenue
Service Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from payments
in respect of United States federal income tax. If any Note Holder has notified
the Mortgagee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such holder has not filed a form claiming an exemption from
United States withholding tax or if the Code or the regulations thereunder or
the administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.

            Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Mortgagee to withhold taxes in the manner
provided for herein or for any false, inaccurate or untrue evidence provided by
any Note Holder hereunder, and Mortgagee shall pay, indemnify, protect, defend
and hold the Owner Participant and the Owner Trustee harmless on an after-tax
basis against any Taxes imposed as a result of such failure by the Mortgagee.

     SECTION 2.05. APPLICATION OF PAYMENTS.

            In the case of each Equipment Note, each payment of Original Amount,
Make-Whole Amount, if any, and interest due thereon shall be applied:

          First: to the payment of accrued interest on such Equipment Note (as
     well as any interest on any overdue Original Amount, any overdue Make-Whole

<PAGE>

     Amount, if any, and to the extent permitted by Law, any overdue interest
     and any other overdue amounts thereunder) to the date of such payment;

          Second: to the payment of the Original Amount of such Equipment Note
     (or a portion thereof) then due thereunder;

          Third: to the payment of Make-Whole Amount, if any, and any other
     amount due hereunder or under such Equipment Note; and

          Fourth: the balance, if any, remaining thereafter, to the payment of
     the Original Amount of such Equipment Note remaining unpaid (provided that
     such Equipment Note shall not be subject to redemption except as provided
     in Sections 2.10, 2.11 and 2.12 hereof).

The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Original Amount of such Equipment Note in the inverse order of
their normal maturity.

     SECTION 2.06. TERMINATION OF INTEREST IN TRUST INDENTURE ESTATE.

            No Note Holder shall, as such, have any further interest in, or
other right with respect to, the Trust Indenture Estate when and if the Original
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under all Equipment Notes held by such Note Holder and all other sums then due
and payable hereunder (including, without limitation, under the third paragraph
of Section 2.02 hereof) and under the other Operative Agreements by the Owner
Trustee (collectively, the "Secured Obligations") shall have been paid in full.

     SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES.

            The Mortgagee shall keep a register (the "Equipment Note Register")
in which the Mortgagee shall provide for the registration of Equipment Notes and
the registration of transfers of Equipment Notes. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Mortgagee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, the Owner
Trustee shall execute, and the Mortgagee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original Amount and of the same series. At the option
of the Note Holder, Equipment Notes may be exchanged for other Equipment Notes
of any authorized denominations of a like aggregate Original Amount, upon
surrender of the Equipment Notes to be exchanged to the Mortgagee at the
Corporate Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Mortgagee shall authenticate
and deliver, the Equipment Notes which the Note Holder making the exchange is
entitled to receive. All Equipment Notes issued upon any registration of

<PAGE>

transfer or exchange of Equipment Notes (whether under this Section 2.07 or
under Section 2.08 hereof or otherwise under this Trust Indenture) shall be the
valid obligations of the Owner Trustee evidencing the same respective
obligations, and entitled to the same security and benefits under this Trust
Indenture, as the Equipment Notes surrendered upon such registration of transfer
or exchange. Every Equipment Note presented or surrendered for registration of
transfer shall (if so required by the Mortgagee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Mortgagee duly executed by the Note Holder or such holder's attorney duly
authorized in writing, and the Mortgagee shall require evidence satisfactory to
it as to the compliance of any such transfer with the Securities Act, and the
securities Laws of any applicable state. The Mortgagee shall make a notation on
each new Equipment Note of the amount of all payments of Original Amount
previously made on the old Equipment Note or Equipment Notes with respect to
which such new Equipment Note is issued and the date to which interest on such
old Equipment Note or Equipment Notes has been paid. Interest shall be deemed to
have been paid on such new Equipment Note to the date on which interest shall
have been paid on such old Equipment Note, and all payments of the Original
Amount marked on such new Equipment Note, as provided above, shall be deemed to
have been made thereon. The Owner Trustee shall not be required to exchange any
surrendered Equipment Notes as provided above during the ten-day period
preceding the due date of any payment on such Equipment Note. The Owner Trustee
shall in all cases deem the Person in whose name any Equipment Note shall have
been issued and registered as the absolute owner and holder of such Equipment
Note for the purpose of receiving payment of all amounts payable by the Owner
Trustee with respect to such Equipment Note and for all purposes until a notice
stating otherwise is received from the Mortgagee and such change is reflected on
the Equipment Note Register. The Mortgagee will promptly notify the Owner
Trustee and the Lessee of each registration of a transfer of an Equipment Note.
Any such transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to the provisions of the Participation Agreement applicable to Note
Holders, and shall be deemed to have covenanted to the parties to the
Participation Agreement as to the matters covenanted by the original Loan
Participant in the Participation Agreement. Subject to compliance by the Note
Holder and its transferee (if any) of the requirements set forth in this Section
2.07, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within 10 Business Days of the date an
Equipment Note is surrendered for transfer or exchange.

     SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT NOTES.

            If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
to the Owner Trustee. If the Equipment Note being replaced has been destroyed,
lost or stolen, the holder of such Equipment Note shall furnish to the Owner
Trustee and the Mortgagee such security or indemnity as may be required by them
to save the Owner Trustee and the Mortgagee harmless and evidence satisfactory
to the Owner Trustee and the Mortgagee of the destruction, loss or theft of such
Equipment Note and of the ownership thereof. If a "qualified institutional
buyer" of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of

<PAGE>

Rule 144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of such
QIB, signed by an authorized officer thereof, in favor of, delivered to and in
form reasonably satisfactory to Lessee, Owner Trustee and Mortgagee shall be
accepted as satisfactory indemnity and security and no further indemnity or
security shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder with the
requirements set forth in this Section 2.08, Mortgagee and Owner Trustee shall
use all reasonable efforts to issue new Equipment Notes within 10 Business Days
of the date of the written request therefor from the Note Holder.

     SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.

            (a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Mortgagee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.

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

     SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES.

            (a) On the date on which Lessee is required pursuant to Section
10.1.2 of the Lease to make payment for an Event of Loss with respect to the
Aircraft, all of the Equipment Notes shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with all
accrued interest thereon to the date of redemption and all other Secured
Obligations owed or then due and payable to the Note Holders but without
Make-Whole Amount.

            (b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9 thereof, on the date the Lease is so terminated,
all the Equipment Notes shall be redeemed in whole at a redemption price equal
to 100% of the unpaid Original Amount thereof, together with accrued interest
thereon to the date of redemption and all other amounts then due and payable
hereunder and under the Participation Agreement and all other Operative
Agreements to the Note Holders plus Make-Whole Amount, if any.

     SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES.

            All (but not less than all) of the Equipment Notes may be redeemed
by the Owner Trustee in connection with a transaction described in, and subject
to the terms and conditions of, Section 11 of the Participation Agreement upon
at least 30 days' revocable prior written notice to the Mortgagee and the Note
Holders, and such Equipment Notes shall, as provided in Section 11 of the
Participation Agreement, be redeemed in whole at a redemption price equal to
100% of the unpaid Original Amount thereof, together with accrued interest
thereon to the date of redemption and all other Secured Obligations owed or then
due and payable to the Note Holders plus (except as provided in Section 11 of
the Participation Agreement) Make-Whole Amount, if any.

<PAGE>

     SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION.

            (a) Neither any redemption of any Equipment Note nor any purchase by
the Owner Trustee of any Equipment Note may be made except to the extent and in
the manner expressly permitted by this Trust Indenture. No purchase of any
Equipment Note may be made by the Mortgagee.

            (b) Notice of redemption with respect to the Equipment Notes shall
be given by the Mortgagee by first-class mail, postage prepaid, mailed not less
than 20 nor more than 60 days prior to the applicable redemption date, to each
Note Holder of such Equipment Notes to be redeemed, at such Note Holder's
address appearing in the Equipment Note Register; PROVIDED that, in the case of
a redemption to be made pursuant to Section 2.10(b) or Section 2.11, such notice
shall be revocable and shall be deemed revoked in the event that the Lease does
not in fact terminate on the specified termination date or if notice of such
redemption shall have been given in connection with a refinancing of Equipment
Notes and the Mortgagee receives written notice of such revocation from the
Lessee or the Owner Trustee not later than three days prior to the redemption
date. All notices of redemption shall state: (1) the redemption date, (2) the
applicable basis for determining the redemption price, (3) that on the
redemption date, the redemption price will become due and payable upon each such
Equipment Note, and that, if any such Equipment Notes are then outstanding,
interest on such Equipment Notes shall cease to accrue on and after such
redemption date, and (4) the place or places where such Equipment Notes are to
be surrendered for payment of the redemption price.

            (c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal to
the redemption price for the Equipment Notes to be redeemed on the redemption
date shall not then be held in the Trust Indenture Estate, deposit or cause to
be deposited with the Mortgagee by 12:00 noon on the redemption date in
immediately available funds the redemption price of the Equipment Notes to be
redeemed.

            (d) Notice of redemption having been given as aforesaid (and not
deemed revoked as contemplated in the proviso to Section 2.12(b)), the Equipment
Notes to be redeemed shall, on the redemption date, become due and payable at
the Corporate Trust Office of the Mortgagee or at any office or agency
maintained for such purposes pursuant to Section 2.07, and from and after such
redemption date (unless there shall be a default in the payment of the
redemption price) any such Equipment Notes then outstanding shall cease to bear
interest. Upon surrender of any such Equipment Note for redemption in accordance
with said notice, such Equipment Note shall be redeemed at the redemption price.
If any Equipment Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid, continue
to bear interest from the applicable redemption date at the interest rate in
effect for such Equipment Note as of such redemption date.

     SECTION 2.13. OPTION TO PURCHASE EQUIPMENT NOTES.

            The Owner Trustee and the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.13, purchase all but not less than all of the Equipment Notes outstanding

<PAGE>

hereunder, and each Note Holder agrees that it will, upon such events and
subject to such terms and conditions and upon receipt of such price, sell,
assign, transfer and convey to such purchaser or its nominee (without recourse
or warranty of any kind except against Liens on such Equipment Notes arising by,
through or under such holder), all of the right, title and interest of such Note
Holder in and to the Equipment Notes held by it, and such purchaser or its
nominee shall assume all of such holder's obligations under the Participation
Agreement and hereunder.

            Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant at any time following the occurrence of
any of the following events, and in any such event the purchase price thereof
shall equal for each Equipment Note, the aggregate unpaid Original Amount
thereof, plus accrued and unpaid interest thereon to, but not including, the
date of purchase and all other Secured Obligations owed, or then due and payable
hereunder, to the holder thereof (including under the third paragraph of Section
2.02 hereof). Such option to purchase the Equipment Notes may be exercised (x)
upon a Mortgagee Event or (y) in the event there shall have occurred and be
continuing a Lease Event of Default PROVIDED that if such option is exercised
pursuant to clause (y) at a time when there shall have occurred and be
continuing for less than 120 days a Lease Event of Default, the purchase price
thereof shall equal the price provided in the preceding sentence plus the
Make-Whole Amount, if any.

            Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant giving written notice of its election of
such option to the Mortgagee, which notice shall specify a date for such
purchase within 30 days of the date of such notice. The Mortgagee shall promptly
send a copy of such notice to each Note Holder. The Mortgagee shall not exercise
any of the remedies hereunder and, without the consent of the Owner Trustee or
the Owner Participant, under the Lease, during the period from the time that an
exercise by the Owner Participant of such option to purchase becomes irrevocable
until the date on which such purchase is required to occur pursuant to the terms
of the preceding sentence. Such election to purchase the Equipment Notes shall
become irrevocable upon the sixteenth day following the giving of written notice
as provided above.

            If the Owner Trustee or the Owner Participant on or before the date
of such purchase shall so request, the Note Holders will comply with all the
provisions of Section 2.07 to enable new Equipment Notes to be issued to the
Owner Trustee or the Owner Participant or its nominee in such denominations as
the Owner Trustee or the Owner Participant shall request. All taxes, charges and
expenses required pursuant to Section 2.09 in connection with the issuance of
such new Equipment Note shall be borne by the Owner Participant.

     SECTION 2.14. SUBORDINATION.

            (a) The Owner Trustee and, by acceptance of its Equipment Notes of
any Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed to
such Note Holder of such Series, including any payment or distribution of cash,
property or securities after the commencement of a proceeding of the type
referred to in Section 4.02(g) hereof, except as expressly provided in Article
III hereof.

<PAGE>

            (b) By the acceptance of its Equipment Notes of any Series (other
than Series A-1 and Series A-2), each Note Holder of such Series agrees that in
the event that such Note Holder, in its capacity as a Note Holder, shall receive
any payment or distribution on any Secured Obligations in respect of such Series
which it is not entitled to receive under this Section 2.14 or Article III
hereof, it will hold any amount so received in trust for the Senior Holder (as
defined in Section 2.14(c) hereof) and will forthwith turn over such payment to
the Mortgagee in the form received to be applied as provided in Article III
hereof.

            (c) As used in this Section 2.14, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A-1 and Series A-2 until the Secured
Obligations in respect of Series A-1 and Series A-2 Equipment Notes have been
paid in full, (ii) after the Secured Obligations in respect of Series A-1 and
Series A-2 Equipment Notes have been paid in full, the Note Holders of Series B
until the Secured Obligations in respect of Series B Equipment Notes have been
paid in full and (iii) after the Secured Obligations in respect of Series B
Equipment Notes have been paid in full, the Note Holders of Series C until the
Secured Obligations in respect of Series C Equipment Notes have been paid in
full.

                                  ARTICLE III

          RECEIPT, DISTRIBUTION AND APPLICATION OFINCOME FROM THE TRUST
                                INDENTURE ESTATE

     SECTION 3.01. BASIC RENT DISTRIBUTION.

            Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Mortgagee pursuant to Section 4.03
hereof shall be promptly distributed in the following order of priority:

FIRST,  (i) so much of such installment or payment as shall be required to pay
            in full the aggregate amount of the payment or payments of Original
            Amount and interest (as well as any interest on any overdue Original
            Amount and, to the extent permitted by Law, on any overdue interest)
            then due under all Series A-1 and Series A-2 Equipment Notes shall
            be distributed to the Note Holders of Series A-1 and Series A-2
            ratably, without priority of one over the other, in the proportion
            that the amount of such payment or payments then due under each
            Series A-1 and Series A-2 Equipment Note bears to the aggregate
            amount of the payments then due under all Series A-1 and Series A-2
            Equipment Notes;

       (ii) after giving effect to paragraph (i) above, so much of such
            installment or payment remaining as shall be required to pay in full
            the aggregate amount of the payment or payments of Original Amount
            and interest (as well as any interest on any overdue Original Amount
            and, to the extent permitted by Law, on interest) then due under all
            Series B Equipment Notes shall be distributed to the Note Holders of
            Series B ratably, without priority of one over the other, in the
            proportion that the amount of such payment or payments then due
            under each Series B Equipment Note bears to the aggregate amount of
            the payments then due under all Series B Equipment Notes;

<PAGE>

      (iii) after giving effect to paragraph (ii) above, so much of such
            installment or payment remaining as shall be required to pay in full
            the aggregate amount of the payment or payments of Original Amount
            and interest (as well as any interest on any overdue Original Amount
            and, to the extent permitted by Law, on any overdue interest) then
            due under all Series C Equipment Notes shall be distributed to the
            Note Holders of Series C ratably, without priority of one over the
            other, in the proportion that the amount of such payment or payments
            then due under each Series C Equipment Note bears to the aggregate
            amount of the payments then due under all Series C Equipment Notes;
            and

       (iv) after giving effect to paragraph (iii) above, so much of such
            payment remaining as shall be required to pay in full the aggregate
            amount of the payment or payments of Original Amount and interest
            (as well as any interest on any overdue Original Amount and, to the
            extent permitted by Law, on any overdue interest) then due under all
            Series D Equipment Notes shall be distributed to the Note Holders of
            Series D ratably, without priority of one over the other, in the
            proportion that the amount of such payment or payments then due
            under each Series D Equipment Note bears to the aggregate amount of
            the payments then due under all Series D Equipment Notes; and

SECOND,     the balance, if any, of such installment remaining thereafter shall
            be distributed to the Owner Trustee; PROVIDED, HOWEVER, that if an
            Event of Default shall have occurred and be continuing, then such
            balance shall not be distributed as provided in this clause "Second"
            but shall be held by the Mortgagee as part of the Trust Indenture
            Estate and invested in accordance with Section 5.09 hereof until
            whichever of the following shall first occur: (i) all Events of
            Default shall have been cured or waived, in which event such balance
            shall be distributed as provided in this clause "Second", (ii)
            Section 3.03 hereof shall be applicable, in which event such balance
            shall be distributed in accordance with the provisions of such
            Section 3.03, or (iii) the 120th day after the receipt of such
            payment in which case such payment shall be distributed as provided
            in this clause "Second".

     SECTION 3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION; OPTIONAL
                   REDEMPTION.

            Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee (i) with respect to the Airframe or the Airframe and
one or more Engines as the result of an Event of Loss, (ii) pursuant to a
voluntary termination of the Lease pursuant to Section 9 thereof, or (iii)
pursuant to an optional redemption of the Equipment Notes pursuant to Section 11
of the Participation Agreement shall be applied to redemption of the Equipment
Notes and to all other Secured Obligations by applying such funds in the
following order of priority:

FIRST,  (a) to reimburse the Mortgagee and the Note Holders for any reasonable
            costs or expenses incurred in connection with such redemption for

<PAGE>

            which they are entitled to reimbursement, or indemnity by Lessee,
            under the Operative Agreements and then (b) to pay any other amounts
            then due to the Mortgagee and the Note Holders under this Trust
            Indenture, the Participation Agreement or the Equipment Notes and
            any and all amounts payable pursuant to the third paragraph of
            Section 2.02 (other than amounts specified in clause Second below);

SECOND, (i) to pay the amounts specified in paragraph (i) of clause "Third" of
            Section 3.03 hereof plus Make-Whole Amount, if any, then due and
            payable in respect of the Series A-1 and Series A-2 Equipment Notes;

       (ii) after giving effect to paragraph (i) above, to pay the amounts
            specified in paragraph (ii) of clause "Third" of Section 3.03 hereof
            plus Make-Whole Amount, if any, then due and payable in respect of
            the Series B Equipment Notes;

      (iii) after giving effect to paragraph (ii) above, to pay the
            amounts specified in paragraph (iii) of clause "Third" of Section
            3.03 hereof plus Make-Whole Amount, if any, then due and payable in
            respect of the Series C Equipment Notes; and

       (iv) after giving effect to paragraph (iii) above, to pay the amounts
            specified in paragraph (iv) of clause "Third" of Section 3.03 hereof
            plus Make-Whole Amount, if any, then due and payable in respect of
            the Series D Equipment Notes; and

THIRD,      as provided in clause "Fourth" of Section 3.03 hereof;

PROVIDED, HOWEVER, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 10 of the Lease and in accordance with Section 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to the Mortgagee shall be held by the Mortgagee as permitted
by Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.09 hereof) as additional security for the obligations of Lessee
under the Lessee Operative Agreements and, unless otherwise applied pursuant to
the Lease, such proceeds (and such investment earnings) shall be released to the
Lessee at the Lessee's written request upon the release of such damaged Airframe
or Engine and the replacement thereof as provided in the Lease.

     SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT.

            Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Section
15 of the Lease or Article IV hereof) after an Event of Default shall have
occurred and be continuing and after the declaration specified in Section
4.04(b) hereof, as well as all payments or amounts then held by the Mortgagee as
part of the Trust Indenture Estate, shall be promptly distributed by the
Mortgagee in the following order of priority:

<PAGE>

FIRST,      so much of such payments or amounts as shall be required to (i)
            reimburse the Mortgagee or WTC for any tax (except to the extent
            resulting from a failure of the Mortgagee to withhold taxes pursuant
            to Section 2.04(b) hereof), expense or other loss (including,
            without limitation, all amounts to be expended at the expense of, or
            charged upon the rents, revenues, issues, products and profits of,
            the property included in the Trust Indenture Estate (all such
            property being herein called the "Mortgaged Property") pursuant to
            Section 4.05(b) hereof) incurred by the Mortgagee or WTC (to the
            extent not previously reimbursed), the expenses of any sale, or
            other proceeding, reasonable attorneys' fees and expenses, court
            costs, and any other expenditures incurred or expenditures or
            advances made by the Mortgagee, WTC or the Note Holders in the
            protection, exercise or enforcement of any right, power or remedy or
            any damages sustained by the Mortgagee, WTC or any Note Holder,
            liquidated or otherwise, upon such Event of Default shall be applied
            by the Mortgagee as between itself, WTC and the Note Holders in
            reimbursement of such expenses and any other expenses for which the
            Mortgagee, WTC or the Note Holders are entitled to reimbursement
            under any Operative Agreement and (ii) pay any and all amounts
            payable to WTC or the Mortgagee hereunder and any and all amounts
            payable pursuant to the third paragraph of Section 2.02 (other than
            amounts specified in clauses Second and Third below); and in the
            case the aggregate amount to be so distributed is insufficient to
            pay as aforesaid in clauses (i) and (ii), then ratably, without
            priority of one over the other, in proportion to the amounts owed
            each hereunder;

SECOND,     so much of such payments or amounts remaining as shall be required
            to reimburse the then existing or prior Note Holders for payments
            made pursuant to Section 5.03 hereof (to the extent not previously
            reimbursed) shall be distributed to such then existing or prior Note
            Holders ratably, without priority of one over the other, in
            accordance with the amount of the payment or payments made by each
            such then existing or prior Note Holder pursuant to said Section
            5.03 hereof;

THIRD,  (i) so much of such payments or amounts remaining as shall be required
            to pay in full the aggregate unpaid Original Amount of all Series
            A-1 and Series A-2 Equipment Notes, and the accrued but unpaid
            interest and other amounts due thereon (other than Make-Whole Amount
            which shall not be due and payable) and all other Secured
            Obligations in respect of the Series A-1 and Series A-2 Equipment
            Notes (other than Make-Whole Amount) to the date of distribution,
            shall be distributed to the Note Holders of Series A-1 and Series
            A-2, and in case the aggregate amount so to be distributed shall be
            insufficient to pay in full as aforesaid, then ratably, without
            priority of one over the other, in the proportion that the aggregate
            unpaid Original Amount of all Series A-1 and Series A-2 Equipment
            Notes held by each holder plus the accrued but unpaid interest and
            other amounts due hereunder or thereunder (other than Make-Whole
            Amount, if any) to the date of distribution, bears to the aggregate
            unpaid Original Amount of all Series A-1 and Series A-2 Equipment
            Notes held by all such holders plus the accrued but unpaid interest
            and other amounts due thereon (other than Make-Whole Amount) to the
            date of distribution;

<PAGE>

       (ii) after giving effect to paragraph (i) above, so much of such payments
            or amounts remaining as shall be required to pay in full the
            aggregate unpaid Original Amount of all Series B Equipment Notes,
            and the accrued but unpaid interest and other amounts due thereon
            (other than Make-Whole Amount which shall not be due and payable)
            and all other Secured Obligations in respect of the Series B
            Equipment Notes (other than Make-Whole Amount) to the date of
            distribution, shall be distributed to the Note Holders of Series B,
            and in case the aggregate amount so to be distributed shall be
            insufficient to pay in full as aforesaid, then ratably, without
            priority of one over the other, in the proportion that the aggregate
            unpaid Original Amount of all Series B Equipment Notes held by each
            holder plus the accrued but unpaid interest and other amounts due
            hereunder or thereunder (other than the Make-Whole Amount, if any)
            to the date of distribution, bears to the aggregate unpaid Original
            Amount of all Series B Equipment Notes held by all such holders plus
            the accrued but unpaid interest and other amounts due thereon (other
            than the Make-Whole Amount) to the date of distribution;

      (iii) after giving effect to paragraph (ii) above, so much of such
            payments or amounts remaining as shall be required to pay in full
            the aggregate unpaid Original Amount of all Series C Equipment
            Notes, and the accrued but unpaid interest and other amounts due
            thereon (other than Make-Whole Amount which shall not be due and
            payable) and all other Secured Obligations in respect of the Series
            C Equipment Notes (other than Make-Whole Amount) to the date of
            distribution, shall be distributed to the Note Holders of Series C,
            and in case the aggregate amount so to be distributed shall be
            insufficient to pay in full as aforesaid, then ratably, without
            priority of one over the other, in the proportion that the aggregate
            unpaid Original Amount of all Series C Equipment Notes held by each
            holder plus the accrued but unpaid interest and other amounts due
            hereunder or thereunder (other than the Make-Whole Amount, if any)
            to the date of distribution, bears to the aggregate unpaid Original
            Amount of all Series C Equipment Notes held by all such holders plus
            the accrued but unpaid interest and other amounts due thereon (other
            than the Make-Whole Amount) to the date of distribution; and

       (iv) after giving effect to paragraph (iii) above, so much of such
            payments or amounts remaining as shall be required to pay in full
            the aggregate unpaid Original Amount of all Series D Equipment
            Notes, and the accrued but unpaid interest and other amounts due
            thereon (other than Make-Whole Amount which shall not be due and
            payable) and all other Secured Obligations in respect of the Series
            D Equipment Notes (other than Make-Whole Amount) to the date of
            distribution, shall be distributed to the Note Holders of Series D,
            and in case the aggregate amount so to be distributed shall be
            insufficient to pay in full as aforesaid, then ratably, without
            priority of one over the other, in the proportion that the aggregate
            unpaid Original Amount of all Series D Equipment Notes held by each
            holder plus the accrued but unpaid interest and other amounts due
            hereunder or thereunder (other than the Make-Whole Amount, if any)
            to the date of distribution, bears to the aggregate unpaid Original

<PAGE>

            Amount of all Series D Equipment Notes held by all such holders plus
            the accrued but unpaid interest and other amounts due thereon (other
            than the Make-Whole Amount) to the date of distribution; and

FOURTH,     the balance, if any, of such payments or amounts remaining
            thereafter shall be distributed to the Owner Trustee.

            No Make-Whole Amount shall be due and payable on the Equipment Notes
as a consequence of the acceleration of the Equipment Notes as a result of an
Event of Default.

     SECTION 3.04. CERTAIN PAYMENTS.

            (a) Any payments received by the Mortgagee for which no provision as
to the application thereof is made in this Trust Indenture and for which such
provision is made in the Lease or the Participation Agreement shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of the Lease or the Participation Agreement, as the case may be.

            (b) Notwithstanding anything to the contrary contained in this
Article III, the Mortgagee will distribute promptly upon receipt any indemnity
payment received by it from the Owner Trustee or Lessee in respect of the
Mortgagee in its individual capacity, any Note Holder, WTC, the Mortgagee, each
separate or additional Trustee appointed pursuant to the Trust Indenture or the
Pass Through Indemnitees, in each case whether pursuant to Section 9 of the
Participation Agreement or as Supplemental Rent, directly to the Person entitled
thereto. Subject to the foregoing sentence of this Section 3.04(b), any payment
received by the Mortgagee under the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance with the
terms of the Intercreditor Agreement.

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

            (d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by Mortgagee pursuant to the terms of the Lease [or
any Permitted Sublease assignment]<F10> shall be held by the Mortgagee as
security for the obligations of Lessee under the Lessee Operative Agreements
and, if and when required by the Lease, paid and/or applied in accordance with
the applicable provisions of the Lease.

     SECTION 3.05. OTHER PAYMENTS.

            Any payments received by the Mortgagee for which no provision as to
the application thereof is made in the Lease, the Participation Agreement,

--------------
<F10>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

elsewhere in this Trust Indenture or in any other Operative Agreement shall be
distributed by the Mortgagee to the extent received or realized at any time (i)
prior to the payment in full of all Secured Obligations due the Note Holders, in
the order of priority specified in Section 3.01 hereof subject to the proviso
thereto, and (ii) after payment in full of all Secured Obligations, in the
following order of priority:

FIRST,      to the extent payments or amounts described in clause "First" of
            Section 3.03 hereof are otherwise obligations of Lessee under the
            Operative Agreements or for which the Lessee is obligated to
            indemnify against thereunder, in the manner provided in clause
            "First" of Section 3.03 hereof, and

SECOND,     in the manner provided in clause "Fourth" of Section 3.03 hereof.

            Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the Mortgagee under
the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft after
the termination of the Lease with respect thereto), to the extent received or
realized at any time after payment in full of all Secured Obligations due the
Note Holders, shall be distributed by the Mortgagee in the order of priority
specified in clause (ii) of the immediately preceding sentence of this Section
3.05.

      SECTION 3.06. PAYMENTS TO OWNER TRUSTEE.

                  Any amounts distributed hereunder by the Mortgagee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type received
by the Mortgagee at such office and to such account or accounts of such entity
or entities as shall be designated by notice from the Owner Trustee to the
Mortgagee from time to time. The Owner Trustee hereby notifies the Mortgagee
that unless and until the Mortgagee receives notice to the contrary from the
Owner Trustee, all amounts to be distributed to the Owner Trustee pursuant to
clause "Second" of Section 3.01 or clause "Fourth" of Section 3.03 hereof shall
be distributed by wire transfer of funds of the type received by the Mortgagee
to the Owner Participant's account (within the time limits contemplated by
Section 2.04(a)) specified in Schedule 1 to the Participation Agreement.

                                   ARTICLE IV

       COVENANTS OF OWNER TRUSTEE; EVENTS OFDEFAULT; REMEDIES OF MORTGAGEE

      SECTION 4.01. COVENANTS OF OWNER TRUSTEE.

            The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:

            (a) the Owner Trustee will duly and punctually pay the Original
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under the Equipment Notes and hereunder in accordance with the terms of the

<PAGE>

Equipment Notes and this Trust Indenture and all amounts, if any, payable by it
to the Note Holders under the Participation Agreement or Section 9 of the Lease;

            (b) the Owner Trustee in its individual capacity covenants and
agrees that it shall not, directly or indirectly, cause or permit to exist a
Lessor Lien attributable to it in its individual capacity with respect to the
Aircraft or any other portion of the Trust Estate; that it will promptly, at its
own expense, take such action as may be necessary to duly discharge such Lessor
Lien attributable to it in its individual capacity; and that it will make
restitution to the Trust Indenture Estate for any actual diminution of the
assets of the Trust Estate resulting from such Lessor Liens attributable to it
in its individual capacity;

            (c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will give
prompt written notice of such Event of Default, Default or Event of Loss to the
Mortgagee, each Note Holder, Lessee and the Owner Participant;

            (d) the Owner Trustee will furnish to the Note Holders and the
Mortgagee, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to the
Owner Trustee under the Lease, including, without limitation, a copy of each
report or notice received pursuant to Section 9 or 8.2 or Annex D, Paragraph E
of the Lease to the extent that the same shall not have been furnished or is not
required to be furnished by the Lessee to the Note Holders or the Mortgagee
pursuant to the Lease;

            (e) except with the consent of the Mortgagee (acting pursuant to
instructions given in accordance with Section 9.01 hereof) or as provided in
Sections 2, 11 and 16 of the Participation Agreement, the Owner Trustee will not
contract for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing, or otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other person; and

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

      SECTION 4.02. EVENT OF DEFAULT.

            "Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):

            (a) any Lease Event of Default (provided that any such Lease Event
of Default caused solely by a failure of Lessee to pay to the Owner Trustee or
the Owner Participant when due any amount that is included in the definition of

<PAGE>

Excluded Payments shall not constitute an Event of Default unless notice is
given by the Owner Trustee to the Mortgagee that such failure shall constitute
an Event of Default); or

            (b) the failure of the Owner Trustee to pay when due any payment of
Original Amount of, interest on, Make-Whole Amount, if any, or other amount due
and payable under any Equipment Note or hereunder (other than as a result of a
Lease Event of Default or a Lease Default) and such failure shall have continued
unremedied for ten Business Days in the case of any payment of Original Amount
or interest or Make-Whole Amount, if any, thereon and, in the case of any other
amount, for ten Business Days after the Owner Trustee or the Owner Participant
receives written demand from the Mortgagee or any Note Holder; or

            (c) any Lien required to be discharged by the Owner Trustee, in its
individual capacity pursuant to Section 4.01(b) hereof or in its individual or
trust capacity pursuant to Section 7.3.1 of the Participation Agreement, or by
the Owner Participant pursuant to Section 7.2.1 of the Participation Agreement
shall remain undischarged for a period of 30 days after the Owner Trustee or the
Owner Participant, as the case may be, shall have received written notice from
the Mortgagee or any Note Holder of such Lien; or

            (d) any representation or warranty made by the Owner Participant or
the Owner Trustee in the Participation Agreement or this Trust Indenture or in
any certificate furnished by the Owner Participant or the Owner Trustee to the
Mortgagee or any Note Holder in connection with the transactions contemplated by
the Operative Agreements shall prove to have been false or incorrect when made
in any material respect and continues to be material and adverse to the
interests of the Mortgagee or the Note Holders; and if such misrepresentation is
capable of being corrected and if such correction is being sought diligently,
such misrepresentation shall not have been corrected within 60 days (or, without
affecting Section 4.02(f) hereof, in the case of the representation made in
Section 6.3.6 or 6.2.6 of the Participation Agreement as to citizenship of the
Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within 60
days) following notice thereof from the Mortgagee or any Note Holder to the
Owner Trustee or the Owner Participant, as the case may be; or

            (e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other covenant
or obligation of the Owner Trustee or Owner Participant, as the case may be, for
the benefit of the Mortgagee or the Note Holders contained in the Participation
Agreement, Section 4.2.1 of the Trust Agreement, the Equipment Notes or this
Trust Indenture which is not remedied within a period of 60 days after notice
thereof has been given to the Owner Trustee and the Owner Participant; or

            (f) if at any time when the Aircraft is registered under the Laws of
the United States, the Owner Participant shall not be a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Part A of Subtitle VII of
Title 49, United States Code, and as the result thereof the registration of the
Aircraft under the Federal Aviation Act, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default shall
be deemed to have occurred under this paragraph (f) unless such circumstances
continue unremedied for more than 60 days after the Owner Participant has Actual
Knowledge of the state of facts that resulted in such ineffectiveness and of
such loss of citizenship; or

<PAGE>

            (g) at any time either (i) the commencement of an involuntary case
or other proceeding in respect of the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate under the federal bankruptcy Laws, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States or seeking the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or seeking the
winding-up or liquidation of its affairs and the continuation of any such case
or other proceeding undismissed and unstayed for a period of 60 consecutive
days; or (ii) the commencement by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate of a voluntary case or proceeding under the federal
bankruptcy Laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar Law in the
United States, or the consent by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or the making by
the Owner Participant, the Owner Trustee, the Trust or the Trust Estate of any
assignment for the benefit of creditors or the Owner Participant or the Owner
Trustee shall take any action to authorize any of the foregoing; PROVIDED,
HOWEVER, that an event referred to in this Section 4.02(g) with respect to the
Owner Participant shall not constitute an Event of Default if within 30 days of
the commencement of the case or proceeding a final non-appealable order,
judgment or decree shall be entered in such case or proceeding by a court or a
trustee, custodian, receiver or liquidator, to the effect that, no part of the
Trust Estate (except for the Owner Participant's beneficial interest therein)
and no right, title or interest under the Trust Indenture Estate shall be
included in, or be subject to, any declaration or adjudication of, or
proceedings with respect to, the bankruptcy, insolvency or liquidation of the
Owner Participant referred to in this Section 4.02(g).

      SECTION 4.03. CERTAIN RIGHTS.

            The Mortgagee shall give the Note Holders, the Owner Trustee and the
Owner Participant prompt written notice of any Event of Default of which the
Mortgagee has Actual Knowledge and shall give the Note Holders, the Owner
Trustee and the Owner Participant not less than ten Business Days' prior written
notice of the date (the "Enforcement Date") on or after which the Mortgagee may,
subject to the limitation set forth in Section 4.04(a), commence and consummate
the exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof; provided, however, that in the event the Mortgagee shall have validly
terminated the Lease, the Mortgagee shall not sell or lease, or otherwise afford
the use of, the Aircraft or any portion thereof to the Lessee or any Affiliate
thereof. Without limiting the generality of the foregoing, the Mortgagee shall
give the Owner Trustee, the Owner Participant and the Lessee at least ten
Business Days' prior written notice (which may be given concurrently with notice
of the Enforcement Date) of any declaration of the Lease to be in default
pursuant to Sections 14 and 15 of the Lease or any termination of the Lease or
of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
If an Event of Default shall have occurred and be continuing, the Owner Trustee
shall have the rights set forth below, any of which may be exercised directly by
the Owner Participant.

<PAGE>

            If as a result of the occurrence of an Event of Default in respect
of the nonpayment by Lessee of Basic Rent due under the Lease, the Mortgagee
shall have insufficient funds to make any payment of Original Amount and
interest on any Equipment Note on the day it becomes due and payable, the Owner
Trustee may, but shall not be obligated to pay the Mortgagee prior to the
Enforcement Date, in the manner provided in Section 2.04 hereof, for application
in accordance with Section 3.01 hereof, an amount equal to the portion of the
Original Amount and interest (including interest, if any, on any overdue
payments of such portion of Original Amount and interest) then due and payable
on the Equipment Notes, and, unless the Owner Trustee has cured Events of
Default in respect of payments of Basic Rent on each of the three immediately
preceding Basic Rent payment dates (or, for so long as any Affiliate of The
Boeing Company is the Owner Participant, six immediately preceding Basic Rent
payment dates), or the Owner Trustee has cured six previous Events of Default
(or for so long as any Affiliate of The Boeing Company is the Owner Participant,
eight previous Events of Default) in respect of payments of Basic Rent, such
payment by the Owner Trustee shall, solely for purposes of this Trust Indenture
be deemed to cure any Event of Default which would otherwise have arisen on
account of the nonpayment by Lessee of such installment of Basic Rent (but not
any other Default or Event of Default which shall have occurred and be
continuing).

            If any Event of Default (other than in respect of the nonpayment of
Basic Rent by the Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee may, but shall not be obligated to, cure such Event
of Default by making such payment prior to the Enforcement Date as is necessary
to accomplish the observance or performance of the defaulted covenant, condition
or agreement to the party entitled to the same.

            Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such Event of
Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
under the Lease for or on account of costs or expenses incurred in connection
with the exercise of such right, nor shall any claim of the Owner Trustee
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of the Mortgagee in and to the
Mortgaged Property. Upon any payment by the Owner Trustee pursuant to the first
or second preceding paragraphs of this Section 4.03, the Owner Trustee shall be
subrogated to the rights of the Mortgagee and the Note Holders in respect of the
Basic Rent which was overdue at the time of such payment and interest payable by
the Lessee on account of its being overdue and any Supplemental Rent in respect
of the reimbursement of amounts paid by Owner Trustee pursuant to the
immediately preceding paragraph (but in either case shall have no rights as a
secured party hereunder), and thereafter, the Owner Trustee shall be entitled
(so long as the application thereof shall not give rise to an Event of Default
hereunder) to receive such overdue Basic Rent or Supplemental Rent, as the case
may be, and interest thereon upon receipt thereof by the Mortgagee; PROVIDED,
HOWEVER, that (i) if the Original Amount and interest on the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) hereof, such
subrogation shall, until the Secured Obligations shall have been paid in full,
be subordinate to the rights of the Mortgagee, the Note Holders and other
holders of Secured Obligations in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not be
entitled to seek to recover any such payment (or any payment in lieu thereof)
except pursuant to the foregoing right of subrogation.

<PAGE>

            Neither the Owner Trustee nor the Owner Participant shall have the
right to cure any Lease Event of Default or Lease Default except as specified in
this Section 4.03.

      SECTION 4.04. REMEDIES.

            (a) If an Event of Default shall have occurred and be continuing and
so long as the same shall continue unremedied, then and in every such case the
Mortgagee may, subject to the second and third paragraphs of this Section
4.04(a), exercise any or all of the rights and powers and pursue any and all of
the remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial Code
and, in the event such Event of Default is also a Lease Event of Default, any
and all of the remedies pursuant to Section 15 of the Lease [and pursuant to any
Permitted Sublease assignment]<F11> and may take possession of all or any part
of the properties covered or intended to be covered by the Lien created hereby
or pursuant hereto and may exclude the Owner Participant, the Owner Trustee and
Lessee and all persons claiming under any of them wholly or partly therefrom;
provided, that the Mortgagee shall give the Owner Trustee and the Owner
Participant twenty days' prior written notice of its intention to sell the
Aircraft, and provided, further, that in the event the Mortgagee shall have
validly terminated the Lease, the Mortgagee shall not sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to the Lessee
or any Affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the Owner
Participant may bid at the sale and become the purchaser. Without limiting any
of the foregoing, it is understood and agreed that the Mortgagee may exercise
any right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.

            Anything in this Trust Indenture to the contrary notwithstanding,
the Mortgagee shall not be entitled to exercise any remedy hereunder as a result
of an Event of Default which arises solely by reason of one or more events or
circumstances which constitute a Lease Event of Default unless the Mortgagee as
security assignee of the Owner Trustee shall have exercised or concurrently be
exercising one or more of the dispossessory remedies provided for in Section 15
of the Lease with respect to the Aircraft; PROVIDED, HOWEVER, that such
requirement to exercise one or more of such remedies under the Lease shall not
apply in circumstances where the Mortgagee is, and has been, involuntarily
stayed or prohibited by applicable law or court order for a continuous period (a
"Continuous Stay Period") in excess of 60 days subsequent to an entry of an
order for relief pursuant to Chapter 11 of the Bankruptcy Code (such 60-day
period, the "Section 1110 Period"); PROVIDED FURTHER, HOWEVER, that the
requirement to exercise one or more of such remedies under the Lease shall
nonetheless be applicable during a Continuous Stay Period subsequent to the
expiration of the Section 1110 Period to the extent that the continuation of
such Continuous Stay Period subsequent to the expiration of the Section 1110
Period (A) results from an agreement by the trustee or the debtor-in-possession

----------------
<F11>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

in such proceeding during the Section 1110 Period with the approval of the
relevant court to perform the Lease in accordance with Section 1110(a)(2)(A) of
the Bankruptcy Code and continues to perform as required by Section 1110(a)(2)
of the Bankruptcy Code and cures any default (other than a default of the kind
specified in Section 365(b)(2) of the Bankruptcy Code) within the applicable
time period specified in Section 1110(a)(2)(B) of the Bankruptcy Code or (B) is
an extension of the Section 1110 Period with the consent of the Mortgagee
pursuant to Section 1110(b) of the Bankruptcy Code or (C) is the consequence of
the Mortgagee's own failure to give any requisite notice or demand to any
person. In the event that the applicability of Section 1110 of the Bankruptcy
Code to the Aircraft is being contested by Lessee in judicial proceedings, both
of the Mortgagee and the Owner Trustee shall have the right to participate in
such proceedings; provided that any such participation by the Owner Trustee
shall not affect in any way any rights or remedy of the Mortgagee hereunder.

            It is expressly understood and agreed that, subject only to the two
preceding paragraphs, the inability, described in such paragraphs, of the
Mortgagee to exercise any right or remedy under the Lease shall in no event and
under no circumstances prevent the Mortgagee from exercising any or all of its
rights, powers and remedies under this Trust Indenture, including, without
limitation, this Article IV.

            (b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Mortgagee may (and shall, upon receipt of a
written demand therefor from a Majority in Interest of Note Holders), subject to
Section 4.03 hereof, at any time, by delivery of written notice or notices to
the Owner Trustee and the Owner Participant, declare all the Equipment Notes to
be due and payable, whereupon the unpaid Original Amount of all Equipment Notes
then outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately become
due and payable without presentment, demand, protest or notice, all of which are
hereby waived; PROVIDED that if an Event of Default referred to in clause (g) of
Section 4.02 hereof shall have occurred, then and in every such case the unpaid
Original Amount then outstanding, together with accrued but unpaid interest and
all other amounts due thereunder and hereunder shall immediately and without
further act become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; PROVIDED FURTHER that in the event of a
reorganization proceeding involving the Lessee instituted under Chapter 11 of
the Bankruptcy Code, if no other Lease Event of Default (including any Lease
Event of Default set forth in Section 14.3 of the Lease) and no other Event of
Default (other than the failure to pay the Original Amount of the Equipment
Notes which by such declaration shall have become payable) exists at any time
after the consummation of such proceeding, such declaration shall be
automatically rescinded without any further action on the part of any Note
Holder.

            This Section 4.04(b), however, is subject to the condition that, if
at any time after the Original Amount of the Equipment Notes shall have become
so due and payable, and before any judgment or decree for the payment of the
money so due, or any thereof, shall be entered, all overdue payments of interest
upon the Equipment Notes and all other amounts payable under the Equipment Notes
(except the Original Amount of the Equipment Notes which by such declaration
shall have become payable) shall have been duly paid, and every other Default
and Event of Default with respect to any covenant or provision of this Trust
Indenture shall have been cured, then and in every such case a Majority in
Interest of Note Holders may (but shall not be obligated to), by written

<PAGE>

instrument filed with the Mortgagee, rescind and annul the Mortgagee's
declaration (or such automatic acceleration) and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.

            Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in accordance
with Section 4.03 hereof, the Event of Default that resulted in such
acceleration or declaration.

            (c) The Note Holders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any purchase
price bid at such sale by such holder all or any part of the unpaid obligations
owing to such Note Holder and secured by the Lien of this Trust Indenture (only
to the extent that such purchase price would have been paid to such Note Holder
pursuant to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).

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

            (e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement (or its designee) is a
Note Holder, the Mortgagee will not be authorized or empowered to acquire title
to any Mortgaged Property or take any action with respect to any Mortgaged
Property so acquired by it if such acquisition or action would cause any Trust
to fail to qualify as a "grantor trust" for federal income tax purposes.

      SECTION 4.05. RETURN OF AIRCRAFT, ETC.

            (a) If an Event of Default shall have occurred and be continuing and
the Equipment Notes have been accelerated, subject to Section 4.03 hereof and
unless the Owner Trustee or the Owner Participant shall have elected to purchase
the Equipment Notes, at the request of the Mortgagee, the Owner Trustee shall
promptly execute and deliver to the Mortgagee such instruments of title and
other documents as the Mortgagee may deem necessary or advisable to enable the
Mortgagee or an agent or representative designated by the Mortgagee, at such
time or times and place or places as the Mortgagee may specify, to obtain
possession of all or any part of the Mortgaged Property included in the Trust
Indenture Estate to which the Mortgagee shall at the time be entitled hereunder.
If the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Mortgagee, the Mortgagee may
(i) obtain a judgment conferring on the Mortgagee the right to immediate
possession and requiring the Owner Trustee to execute and deliver such
instruments and documents to the Mortgagee, to the entry of which judgment the
Owner Trustee hereby specifically consents to the fullest extent permitted by

<PAGE>

Law, and (ii) pursue all or part of such Mortgaged Property wherever it may be
found and, in the event that a Lease Event of Default has occurred and is
continuing, may enter any of the premises of Lessee wherever such Mortgaged
Property may be or be supposed to be and search for such Mortgaged Property and
take possession of and remove such Mortgaged Property. All expenses of obtaining
such judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Trust Indenture.

            (b) Upon every such taking of possession, the Mortgagee may, from
time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Mortgagee
shall have the right to maintain, use, operate, store, insure, lease, control,
manage, dispose of, modify or alter the Mortgaged Property and to carry on the
business and to exercise all rights and powers of the Owner Participant and the
Owner Trustee relating to the Mortgaged Property, as the Mortgagee shall deem
best, including the right to enter into any and all such agreements with respect
to the maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modification or alteration of the Mortgaged Property or
any part thereof as the Mortgagee may determine, and the Mortgagee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Mortgaged Property and
every part thereof, except Excluded Payments, without prejudice, however, to the
right of the Mortgagee under any provision of this Trust Indenture to collect
and receive all cash held by, or required to be deposited with, the Mortgagee
hereunder other than Excluded Payments. Such tolls, rents (including Rent),
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make all
payments which the Mortgagee may be required or may elect to make, if any, for
taxes, assessments, insurance or other proper charges upon the Mortgaged
Property or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee), and all other payments which the Mortgagee
may be required or authorized to make under any provision of this Trust
Indenture, as well as just and reasonable compensation for the services of the
Mortgagee, and of all persons properly engaged and employed by the Mortgagee
with respect hereto.

      SECTION 4.06. REMEDIES CUMULATIVE.

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

<PAGE>

      SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS.

            In case the Mortgagee shall have instituted any proceeding to
enforce any right, power or remedy under this Trust Indenture by foreclosure,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Mortgagee, then and in every such case the Owner Trustee, the Mortgagee and
Lessee shall, subject to any determination in such proceedings, be restored to
their former positions and rights hereunder with respect to the Mortgaged
Property, and all rights, remedies and powers of the Owner Trustee, the
Mortgagee or Lessee shall continue as if no such proceedings had been
instituted.

      SECTION 4.08. WAIVER OF PAST DEFAULTS.

            Upon written instruction from a Majority in Interest of Note
Holders, the Mortgagee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; provided,
that in the absence of written instructions from all the Note Holders, the
Mortgagee shall not waive any Default (i) in the payment of the Original Amount,
Make-Whole Amount, if any, and interest and other amounts due under any
Equipment Note then outstanding, or (ii) in respect of a covenant or provision
hereof which, under Article IX hereof, cannot be modified or amended without the
consent of each Note Holder.

      SECTION 4.09. APPOINTMENT OF RECEIVER.

            The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the Owner Trustee hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Mortgaged Property shall be
entitled to exercise all the rights and powers of the Mortgagee with respect to
the Mortgaged Property.

      SECTION 4.10. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.

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

<PAGE>

bills of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.

      SECTION 4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT.

            Notwithstanding any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium, if
any, and interest on an Equipment Note on or after the respective due dates
expressed in such Equipment Note, or to bring suit for the enforcement of any
such payment on or after such respective dates in accordance with the terms
hereof, shall not be impaired or affected without the consent of such Note
Holder.

                                    ARTICLE V

                             DUTIES OF THE MORTGAGEE

      SECTION 5.01. NOTICE OF EVENT OF DEFAULT.

            If the Mortgagee shall have Actual Knowledge of an Event of Default
or of a Default arising from a failure to pay Rent, the Mortgagee shall give
prompt written notice thereof to the Owner Trustee, the Owner Participant,
Lessee, and each Note Holder. Subject to the terms of Sections 2.13, 4.03, 4.04,
4.08, 5.02 and 5.03 hereof, the Mortgagee shall take such action, or refrain
from taking such action, with respect to such Event of Default or Default
(including with respect to the exercise of any rights or remedies hereunder) as
the Mortgagee shall be instructed in writing by a Majority in Interest of Note
Holders. Subject to the provisions of Section 5.03, if the Mortgagee shall not
have received instructions as above provided within 20 days after mailing notice
of such Event of Default to the Note Holders, the Mortgagee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; PROVIDED, HOWEVER, that the Mortgagee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest of
Note Holders. For all purposes of this Trust Indenture, in the absence of Actual
Knowledge on the part of the Mortgagee, the Owner Trustee or the Owner
Participant, the Mortgagee, the Owner Trustee or the Owner Participant, as the
case may be, shall not be deemed to have knowledge of a Default or an Event of
Default (except, in the case of the Mortgagee, the failure of Lessee to pay any
installment of Basic Rent within one Business Day after the same shall become
due, if any portion of such installment was then required to be paid to the
Mortgagee, which failure shall constitute knowledge of a Default) unless
notified in writing by Lessee, the Owner Trustee, the Owner Participant or one
or more Note Holders.

      SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND LIMITATIONS.

            (a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and (b),
4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and from
time to time of a Majority in Interest of Note Holders, the Mortgagee shall,
subject to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such

<PAGE>

instructions; (ii) give such notice or direction or exercise such right, remedy
or power under the Lease, the Participation Agreement, the Purchase Agreement,
the Purchase Agreement Assignment, or any other part of the Trust Indenture
Estate as shall be specified in such instructions; and (iii) approve as
satisfactory to the Mortgagee all matters required by the terms of the Lease to
be satisfactory to the Owner Trustee, it being understood that without the
written instructions of a Majority in Interest of Note Holders, the Mortgagee
shall not approve any such matter as satisfactory to the Mortgagee; provided,
that anything contained in this Trust Indenture, the Lease or the other
Operative Agreements to the contrary notwithstanding, but subject to the next
paragraph hereof:

            (1) the Owner Trustee or the Owner Participant, may, without the
      consent of the Mortgagee, demand, collect, sue for or otherwise obtain all
      amounts included in Excluded Payments from Lessee and seek legal or
      equitable remedies to require Lessee to maintain the insurance coverage
      referred to in Section 11 of the Lease [(or the comparable provisions of
      any assigned Permitted Sublease)]<F12> provided, that the rights referred
      to in this clause (1) shall not be deemed to include the exercise of any
      remedies provided for in Section 15 of the Lease other than the right to
      proceed by appropriate court action, either at Law or in equity, to
      enforce payment by Lessee of such amounts included in Excluded Payments or
      performance by Lessee of such insurance covenant or to recover damages for
      the breach thereof or for specific performance of any other term of the
      Lease [(or the comparable provisions of any assigned Permitted
      Sublease)]<F13>;

            (2) (A) the Mortgagee shall not, without the consent of the Owner
      Trustee, enter into, execute or deliver amendments or modifications in
      respect of any of the provisions of the Lease[, any assigned Permitted
      Sublease or any Permitted Sublease assignment]<F14>, and (B) unless a
      Mortgagee Event shall have occurred and be continuing, the Mortgagee shall
      not, without the consent of the Owner Trustee, which consent shall not be
      withheld if no right or interest of the Owner Trustee or the Owner
      Participant shall be diminished or impaired thereby, (i) enter into,
      execute or deliver waivers or consents in respect of any of the provisions
      of the Lease, or (ii) approve any accountants, engineers, appraisers or
      counsel as satisfactory to render services for or issue opinions to the
      Owner Trustee pursuant to the Operative Agreements, provided that whether
      or not any Mortgagee Event has occurred and is continuing, the Owner
      Trustee's consent shall be required with respect to any waivers or
      consents in respect of any of the provisions of Section 5, 7 or 11 of the
      Lease, or of any other Section of the Lease to the extent such action
      shall affect (y) the amount or timing of, or the right to enforce payment
      of any Excluded Payment or (z) the amount or timing of any amounts payable
      by the Lessee under the Lease as originally executed (or as subsequently
      modified with the consent of the Owner Trustee) which, absent the

----------------
<F12>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
<F13>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
<F14>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

      occurrence and continuance of an Event of Default hereunder, would be
      distributable to the Owner Trustee under Article III hereof;

            (3) whether or not a Default or Event of Default under the Trust
      Indenture has occurred and is continuing, the Owner Trustee and the Owner
      Participant shall have the right, together with the Mortgagee, (i) to
      receive from Lessee [or any Permitted Sublessee]<F15> certificates and
      other documents and information which Lessee is required to give or
      furnish to the Owner Trustee or the Lessor pursuant to any Operative
      Agreement and (ii) to inspect in accordance with the Lease the Airframe
      and Engines and all Aircraft Documents;

            (4) whether or not a Default or Event of Default under the Trust
      Indenture has occurred and is continuing, the Owner Trustee shall have the
      right to adjust upwards Rent, Stipulated Loss Values and Termination
      Values as provided in Section 3.2.1 of the Lease or pursuant to a transfer
      under Section 10.1.1 of the Participation Agreement;

            (5) so long as no Mortgagee Event has occurred and is continuing,
      the Owner Trustee shall have the right, to the exclusion of the Mortgagee,
      to adjust Basic Rent, Stipulated Loss Values and Termination Values as
      provided in Section 3.2 of the Lease or to adjust downward any installment
      or amount of Basic Rent, Stipulated Loss Value or Termination Value, as
      such installments and amounts are set forth in Schedules 2, 3 and 4,
      respectively, to the Lease, to the extent of the portion of such
      installment or amount that would, under Section 3.01, 3.02 or 3.03 hereof,
      as the case may be, be distributable to the Owner Trustee or the Owner
      Participant;

            (6) whether or not a Default or Event of Default under the Trust
      Indenture has occurred and is continuing, the Owner Trustee may, without
      the consent of the Mortgagee, (i) solicit and make bids with respect to
      the Aircraft under Section 9 of the Lease in respect of a termination of
      the Lease by Lessee pursuant to Section 9 thereof, (ii) determine Fair
      Market Sales Value and Fair Market Rental Value under Section 17 of the
      Lease for all purposes except following a Mortgagee Event pursuant to
      Section 15 of the Lease, and (iii) make an election pursuant to and in
      accordance with the provisions of Sections 9.1(b), 9.2 and 9.3 of the
      Lease; and

            (7) so long as no Mortgagee Event shall have occurred and be
      continuing, all other rights of the "Lessor" under the Lease [or any
      assigned Permitted Sublease]<F16> shall be exercised by the Owner Trustee
      to the exclusion of the Mortgagee including, without limitation, the right
      to (i) exercise all rights with respect to Lessee's use and operation,
      modification or maintenance of the Aircraft and any Engine which the Lease
      specifically confers on the Lessor, and (ii) consent to and approve any
      assignment pursuant to Section 13 of the Lease; PROVIDED that the

----------------
<F15>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<F16>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

      foregoing shall not (x) limit (A) any rights separately granted to the
      Mortgagee under the Operative Agreements or (B) the right of the Mortgagee
      to receive any funds to be delivered to the "Lessor" under the Lease
      (except with respect to Excluded Payments) and under the Purchase
      Agreement or (y) confer upon the Owner Trustee the right to adversely
      affect the validity or enforceability of the lien of this Indenture.

            Notwithstanding anything to the contrary contained herein (including
this Section 5.02), the Mortgagee shall have the right, to the exclusion of the
Owner Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.13 hereof, exercise the remedies set forth
in such Section 15 (other than in connection with Excluded Payments and provided
that each of the Owner Trustee, Owner Participant and Mortgagee shall
independently retain the rights set forth in clause (ii) of Section 15.1.5 of
the Lease) at any time that a Lease Event of Default shall have occurred and be
continuing. Further and for the avoidance of doubt, and anything to the contrary
contained herein (including this Section 5.02), in no event may the Owner
Trustee amend or otherwise modify the provisions of Section 3.2.1(e) of the
Lease or of the final sentence of the definition of Stipulated Loss Value or
Termination Value, in any such case, without the prior written consent of the
Mortgagee.

            The Mortgagee will execute and the Owner Trustee will file or cause
to be filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of a
Majority in Interest of Note Holders (which instructions shall be accompanied by
the form of such continuation statement so to be filed). The Mortgagee will
furnish to each Note Holder (and, during the continuation of a Mortgagee Event,
to the Owner Trustee and Owner Participant), promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates
and other instruments furnished to the Mortgagee under the Lease or hereunder,
including, without limitation, a copy of each report or notice received pursuant
to Section 9 and Paragraph E of Annex D of the Lease, respectively to the extent
that the same shall not have been furnished to such holder pursuant hereto or
the Lease.

            (b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event of
Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Note Holders, the Mortgagee shall declare the Lease to
be in default pursuant to Section 15 thereof and exercise those remedies
specified by such Note Holders. The Mortgagee agrees to provide to the Note
Holders, the Owner Trustee and the Owner Participant concurrently with such
declaration by the Mortgagee, notice of such declaration by the Mortgagee.

      SECTION 5.03. INDEMNIFICATION.

            The Mortgagee shall not be required to take any action or refrain
from taking any action under Section 5.01 (other than the first sentence
thereof), 5.02 or Article IV hereof unless the Mortgagee shall have been
indemnified to its reasonable satisfaction against any liability, cost or
expense (including counsel fees) which may be incurred in connection therewith
pursuant to a written agreement with one or more Note Holders. The Mortgagee

<PAGE>

agrees that it shall look solely to the Note Holders for the satisfaction of any
indemnity (except expenses for foreclosure of the type referred to in clause
"First" of Section 3.03 hereof) owed to it pursuant to this Section 5.03. The
Mortgagee shall not be under any obligation to take any action under this Trust
Indenture or any other Operative Agreement and nothing herein or therein shall
require the Mortgagee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance 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 written indemnity of any Note Holder who is a QIB, signed by
an authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or of the Lease or is otherwise contrary to Law.

      SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
                    INSTRUCTIONS.

            The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Indenture Estate, or to otherwise take
or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Note Holders as provided in this Trust Indenture; and
no implied duties or obligations shall be read into this Trust Indenture against
the Mortgagee. The Mortgagee 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 under Section 7.01 hereof), promptly take such action
as may be necessary duly to discharge all liens and encumbrances on any part of
the Trust Indenture Estate which result from claims against it in its individual
capacity not related to the ownership of the Aircraft or the administration of
the Trust Indenture Estate or any other transaction pursuant to this Trust
Indenture or any document included in the Trust Indenture Estate.

      SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, TRUST INDENTURE OR
                    INSTRUCTIONS.

            The Owner Trustee and the Mortgagee agree that they will not use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate except (i) as
required by the terms of the Lease or (ii) in accordance with the powers granted
to, or the authority conferred upon, the Owner Trustee and the Mortgagee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.

      SECTION 5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES.

            At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, if no Lease Event of Default is continuing, the Owner Trustee shall
direct the Mortgagee to execute and deliver to the Owner Trustee an appropriate

<PAGE>

instrument releasing such Airframe and/or Engine as appropriate from the Lien of
this Trust Indenture and the Mortgagee shall execute and deliver such instrument
as aforesaid, but only upon compliance by Lessee with the applicable provisions
of Section 10 of the Lease.

      SECTION 5.07. INDENTURE SUPPLEMENTS FOR REPLACEMENTS.

            If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the Mortgagee
agree for the benefit of the Note Holders and Lessee, subject to fulfillment of
the conditions precedent and compliance by Lessee with its obligations set forth
in Section 10 of the Lease and the requirements of Section 5.06 hereof with
respect to such Replacement Airframe or Replacement Engine, to execute and
deliver a Lease Supplement and a Trust Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.

      SECTION 5.08. EFFECT OF REPLACEMENT.

            In the event of the substitution of an Airframe or of a Replacement
Engine pursuant to Section 10 of the Lease, all provisions of this Trust
Indenture relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines with
the same force and effect as if such Replacement Airframe or Replacement Engine
or Engines were the same airframe or engine or engines, as the case may be, as
the Airframe or Engine or Engines being replaced but for the Event of Loss with
respect to the Airframe or Engine or Engines being replaced.

      SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE.

            Any amounts held by the Mortgagee as assignee of the Owner Trustee's
rights to hold monies for security pursuant to Section 4.4 of the Lease shall be
held in accordance with the terms of such Section and the Mortgagee agrees, for
the benefit of Lessee, to perform the duties of the Owner Trustee under such
Section. Any amounts held by the Mortgagee pursuant to the proviso to the first
sentence of Section 3.01, pursuant to Section 3.02, or pursuant to any provision
of any other Operative Agreement providing for amounts to be held by the
Mortgagee which are not distributed pursuant to the other provisions of Article
III hereof shall be invested by the Mortgagee from time to time in Cash
Equivalents as directed by the Owner Trustee so long as the Mortgagee may
acquire the same using its best efforts. All Cash Equivalents held by the
Mortgagee pursuant to Section 4.4 of the Lease or this Section 5.09 shall either
be (a) registered in the name of, payable to the order of, or specially indorsed
to, the Mortgagee, or (b) held in an Eligible Account. Unless otherwise
expressly provided in this Trust Indenture, any income realized as a result of
any such investment, net of the Mortgagee's reasonable fees and expenses in
making such investment, shall be held and applied by the Mortgagee in the same
manner as the principal amount of such investment is to be applied and any
losses, net of earnings and such reasonable fees and expenses, shall be charged
against the principal amount invested. The Mortgagee shall not be liable for any
loss resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence,
and any such investment may be sold (without regard to its maturity) by the

<PAGE>

Mortgagee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture.

                                   ARTICLE VI

                       THE OWNER TRUSTEE AND THE MORTGAGEE

      SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.

            The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the Trust
Indenture Estate in accordance with the terms hereof. The Owner Trustee, in its
individual capacity, and the Mortgagee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for their own
willful misconduct or gross negligence (other than for the handling of funds,
for which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Mortgagee, as provided in the fourth
sentence of Section 2.04(a) hereof and the last sentence of Section 5.04 hereof,
and (iii) for liabilities that may result, in the case of the Owner Trustee,
from the inaccuracy of any representation or warranty of the Owner Trustee
expressly made in its individual capacity in the Participation Agreement or in
Section 4.01(b) or 6.03 hereof (or in any certificate furnished to the Mortgagee
or any Note Holder in connection with the transactions contemplated by the
Operative Agreements) or, in the case of the Mortgagee (in its individual
capacity), from the inaccuracy of any representation or warranty of the
Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder. Neither the Owner Trustee nor the Mortgagee shall be
liable for any action or inaction of the other or of the Owner Participant.

      SECTION 6.02. ABSENCE OF DUTIES.

            In the case of the Mortgagee, except in accordance with written
instructions furnished pursuant to Section 5.01 or 5.02 hereof, and except as
provided in, and without limiting the generality of, Sections 5.03, 5.04 and
6.08 hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Mortgagee shall have no duty (i) to
see to any registration of the Aircraft or any recording or filing of the Lease
or of this Trust Indenture or any other document, or to see to the maintenance
of any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not Lessee
shall be in default with respect thereto, (iii) to see to the payment or
discharge of any lien or encumbrance of any kind against any part of the Trust
Estate or the Trust Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements from Lessee, or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Lessee's covenants under the Lease [or any of the Permitted
Sublessee's covenants under any assigned Permitted Sublease]<F17> with respect

----------------
<F17>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

to the Aircraft. The Owner Participant shall not have any duty or responsibility
hereunder, including, without limitation, any of the duties mentioned in clauses
(i) through (v) above; provided, that nothing contained in this sentence shall
limit any obligations of the Owner Participant under the Participation Agreement
or relieve the Owner Participant from any restriction under Section 4.03 hereof.

      SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR
                    DOCUMENTS.

            NEITHER THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, except the Owner Trustee in its individual capacity
warrants that (i) the Owner Trustee has received on the Delivery Date whatever
title was conveyed to it, and (ii) the Aircraft is free and clear of Lessor
Liens attributable to the Owner Trustee in its individual capacity. Neither the
Owner Trustee, in its individual capacity or as Owner Trustee under the Trust
Agreement, nor the Mortgagee, in its individual or trust capacities, makes or
shall be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Trust Indenture, the Trust Agreement, the
Participation Agreement, the Equipment Notes, the Lease, the Purchase Agreement
or the Purchase Agreement Assignment with the Consent and Agreement and the
Engine Consent and Agreement attached thereto, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Mortgagee in its individual capacity, in
each case expressly made in this Trust Indenture or in the Participation
Agreement. The Loan Participants, the Note Holders and the Owner Participant
make no representation or warranty hereunder whatsoever.

      SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST.

            Any monies paid to or retained by the Mortgagee pursuant to any
provision hereof and not then required to be distributed to the Note Holders,
Lessee or the Owner Trustee as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law or Section 4.4 of
the Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Mortgagee shall not be liable
for any interest thereon (except that the Mortgagee shall invest all monies held
as directed by Lessee so long as no Lease Event of Default or Lease Default has
occurred and is continuing (or in the absence of such direction, by the Majority
In Interest of Note Holders) in Cash Equivalents; PROVIDED, HOWEVER, that any

<PAGE>

payments received, or applied hereunder, by the Mortgagee shall be accounted for
by the Mortgagee so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.

      SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL.

            Neither the Owner Trustee nor the Mortgagee shall incur any
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee and the Mortgagee may accept a
copy of a resolution of the Board of Directors (or Executive Committee thereof)
of any party to the Participation Agreement, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to the aggregate unpaid Original Amount of
Equipment Notes outstanding as of any date, the Owner Trustee may for all
purposes hereof rely on a certificate signed by any Vice President or other
authorized corporate trust officer of the Mortgagee. As to any fact or matter
relating to Lessee the manner of ascertainment of which is not specifically
described herein, the Owner Trustee and the Mortgagee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of Lessee, as
to such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee and the Mortgagee for any action taken or omitted to be taken
by them in good faith in reliance thereon. The Mortgagee shall assume, and shall
be fully protected in assuming, that the Owner Trustee is authorized by the
Trust Agreement to enter into this Trust Indenture and to take all action to be
taken by it pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the administration
of the trusts hereunder, the Owner Trustee and the Mortgagee each may execute
any of the trusts or powers hereof and perform its powers and duties hereunder
directly or through agents or attorneys and may, at the expense of the Trust
Indenture Estate, advise with counsel, accountants and other skilled persons to
be selected and retained by it, and the Owner Trustee and the Mortgagee shall
not be liable for anything done, suffered or omitted in good faith by them in
accordance with the written advice or written opinion of any such counsel,
accountants or other skilled persons.

      SECTION 6.06. CAPACITY IN WHICH ACTING.

            The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.

      SECTION 6.07. COMPENSATION.

            The Mortgagee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and expenses
of counsel), for all services rendered hereunder and shall, on and subsequent to
an Event of Default hereunder, have a priority claim on the Trust Indenture
Estate for the payment of such compensation, to the extent that such
compensation shall not be paid by Lessee, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Trust Indenture Estate toward such payments. The Mortgagee

<PAGE>

agrees that it shall have no right against the Loan Participants, the Note
Holders, the Owner Trustee or the Owner Participant for any fee as compensation
for its services as trustee under this Trust Indenture.

      SECTION 6.08. INSTRUCTIONS FROM NOTE HOLDERS.

            In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee's duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 6.08.

                                  ARTICLE VII

                  INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE

      SECTION 7.01. SCOPE OF INDEMNIFICATION.

            The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, except as to matters covered by any
indemnity furnished as contemplated by Section 5.03 hereof and except as
otherwise provided in Section 2.03 or 2.04(b) hereof, to assume liability for,
and does hereby indemnify, protect, save and keep harmless the Mortgagee (in its
individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Mortgagee on or
measured by any compensation received by the Mortgagee for its services under
this Trust Indenture), claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature whatsoever, which may
be imposed on, incurred by or asserted against the Mortgagee (whether or not
also indemnified against by any other person under any other document) in any
way relating to or arising out of this Trust Indenture or any other Operative
Agreement to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Trust Indenture Estate or the action or inaction of the Mortgagee hereunder
except only in the case of willful misconduct or gross negligence (or negligence
in the case of handling funds) of the Mortgagee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) referred to in Section 6.03 hereof,
or as provided in Section 6.01 hereof or in the last sentence of Section 5.04
hereof, or as otherwise excluded by the terms of Section 9.1 or 9.3 of the
Participation Agreement from Lessee's indemnities under such Sections. In
addition, if necessary, the Mortgagee shall be entitled to indemnification from
the Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against pursuant
to this Section 7.01 to the extent not reimbursed by Lessee or others, but
without releasing any of them from their respective agreements of reimbursement;

<PAGE>

and to secure the same the Mortgagee shall have a prior Lien on the Trust
Indenture Estate. Without limiting the foregoing, the Mortgagee agrees that,
prior to seeking indemnification from the Trust Indenture Estate, it will
demand, and diligently pursue in good faith (but with no duty to exhaust all
legal remedies therefor), indemnification available to the Mortgagee from Lessee
under the Lease or the Participation Agreement.

                                  ARTICLE VIII

                         SUCCESSOR AND SEPARATE TRUSTEES

      SECTION 8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE.

            In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Mortgagee, Lessee and the Note
Holders.

      SECTION 8.02. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR.

            (a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to Lessee, the
Owner Trustee, the Owner Participant and each Note Holder, such resignation to
be effective upon the acceptance of the trusteeship by a successor Mortgagee. In
addition, a Majority in Interest of Note Holders may at any time (but only with
the consent of the Lessee, which consent shall not be unreasonably withheld,
except that such consent shall not be necessary if a Lease Event of Default is
continuing) remove the Mortgagee without cause by an instrument in writing
delivered to the Owner Trustee, Lessee, the Owner Participant and the Mortgagee,
and the Mortgagee shall promptly notify each Note Holder thereof in writing,
such removal to be effective upon the acceptance of the trusteeship by a
successor Mortgagee. In the case of the resignation or removal of the Mortgagee,
a Majority in Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Lease Event of
Default shall have occurred and be continuing, shall be subject to Lessee's
reasonable approval. If a successor Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner Trustee, the Owner Participant or any Note Holder may apply to any court
of competent jurisdiction to appoint a successor Mortgagee to act until such
time, if any, as a successor shall have been appointed as above provided. The
successor Mortgagee so appointed by such court shall immediately and without
further act be superseded by any successor Mortgagee appointed as above
provided.

            (b) Any successor Mortgagee, however appointed, shall execute and
deliver to the Owner Trustee, the predecessor Mortgagee and the Lessee an
instrument accepting such appointment and assuming the obligations of the
Mortgagee under the Participation Agreement arising from and after the time of
such appointment, and thereupon such successor Mortgagee, without further act,
shall become vested with all the estates, properties, rights, powers and duties
of the predecessor Mortgagee hereunder in the trust hereunder applicable to it
with like effect as if originally named the Mortgagee herein; but nevertheless
upon the written request of such successor Mortgagee, such predecessor Mortgagee

<PAGE>

shall execute and deliver an instrument transferring to such successor
Mortgagee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Mortgagee, and such
predecessor Mortgagee shall duly assign, transfer, deliver and pay over to such
successor Mortgagee all monies or other property then held by such predecessor
Mortgagee hereunder.

            (c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
under the Operative Agreements are guaranteed by an affiliated entity having) a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Mortgagee hereunder upon reasonable or customary terms.

            (d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Mortgagee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Mortgagee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 8.02, be a successor Mortgagee and the Mortgagee
under this Trust Indenture without further act.

      SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.

            (a) Whenever (i) the Mortgagee shall deem it necessary or desirable
in order to conform to any Law of any jurisdiction in which all or any part of
the Trust Indenture Estate shall be situated or to make any claim or bring any
suit with respect to or in connection with the Trust Indenture Estate, this
Trust Indenture, any other Indenture Agreement, the Equipment Notes or any of
the transactions contemplated by the Participation Agreement, (ii) the Mortgagee
shall be advised by counsel satisfactory to it that it is so necessary or
prudent in the interests of the Note Holders (and the Mortgagee shall so advise
the Owner Trustee and Lessee), or (iii) the Mortgagee shall have been requested
to do so by a Majority in Interest of Note Holders, then in any such case, the
Mortgagee and, upon the written request of the Mortgagee, the Owner Trustee,
shall execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1) to
constitute one or more bank or trust companies or one or more persons approved
by the Mortgagee, either to act jointly with the Mortgagee as additional trustee
or trustees of all or any part of the Trust Indenture Estate, or to act as
separate trustee or trustees of all or any part of the Trust Indenture Estate,
in each case with such rights, powers, duties and obligations consistent with
this Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Mortgagee or a Majority in Interest of Note Holders may deem
necessary or advisable, or (2) to clarify, add to or subtract from the rights,
powers, duties and obligations theretofore granted any such additional or
separate trustee, subject in each case to the remaining provisions of this
Section 8.03. If the Owner Trustee shall not have taken any action requested of
it under this Section 8.03(a) that is permitted or required by its terms within
15 days after the receipt of a written request from the Mortgagee so to do, or
if an Event of Default shall have occurred and be continuing, the Mortgagee may
act under the foregoing provisions of this Section 8.03(a) without the
concurrence of the Owner Trustee, and the Owner Trustee hereby irrevocably

<PAGE>

appoints (which appointment is coupled with an interest) the Mortgagee, its
agent and attorney-in-fact to act for it under the foregoing provisions of this
Section 8.03(a) in either of such contingencies. The Mortgagee may, in such
capacity, execute, deliver and perform any such supplemental indenture, or any
such instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction from
the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 8.03(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the Mortgagee
until a successor additional or separate trustee is appointed as provided in
this Section 8.03(a).

            (b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Mortgagee
in respect of the custody, investment and payment of monies and all monies
received by any such additional or separate trustee from or constituting part of
the Trust Indenture Estate or otherwise payable under any Operative Agreement to
the Mortgagee shall be promptly paid over by it to the Mortgagee. All other
rights, powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Mortgagee and such
additional or separate trustee jointly except to the extent that applicable Law
of any jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Trust Indenture Estate in any such jurisdiction) shall be exercised
and performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder shall
be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences of its
lack of reasonable care in selecting, and the Mortgagee's own actions in acting
with, any additional or separate trustee. Each additional or separate trustee
appointed pursuant to this Section 8.03 shall be subject to, and shall have the
benefit of Articles IV through VIII and Article X hereof insofar as they apply
to the Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Mortgagee hereunder.

            (c) If at any time the Trustee shall deem it no longer necessary or
in order to conform to any such Law or take any such action or shall be advised
by such counsel that it is no longer so necessary or desirable in the interest
of the Note Holders, or in the event that the Mortgagee shall have been
requested to do so in writing by a Majority in Interest of Note Holders, the
Mortgagee and, upon the written request of the Mortgagee, the Owner Trustee,
shall execute and deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to remove any additional or
separate trustee. The Mortgagee may act on behalf of the Owner Trustee under
this Section 8.03(c) when and to the extent it could so act under Section
8.03(a) hereof.

<PAGE>

                                   ARTICLE IX

      SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTUREAND OTHER DOCUMENTS

      SECTION 9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS.

            (a) Except as provided in Section 5.02 hereof, the Owner Trustee
agrees it shall not enter into any amendment of or supplement to the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and Agreement
or the Engine Consent and Agreement, or execute and deliver any written waiver
or modification of, or consent under, the terms of the Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement or the
Engine Consent and Agreement, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by the Mortgagee and a
Majority in Interest of Note Holders. Anything to the contrary contained herein
notwithstanding, without the necessity of the consent of any of the Note Holders
or the Mortgagee, (i) any Excluded Payments payable to the Owner Participant may
be modified, amended, changed or waived in such manner as shall be agreed to by
the Owner Participant and Lessee and (ii) the Owner Trustee and Lessee may enter
into amendments of or additions to the Lease to modify Section 5 (except to the
extent that such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease) or Section 17 of the Lease so long as such amendments,
modifications and changes do not and would not affect the time of, or reduce the
amount of, Rent payments (except to the extent expressly permitted by Section
5.02 hereof) until after the payment in full of all Secured Obligations or
otherwise adversely affect the Note Holders.

            (b) Without limiting the provisions of Section 9.01 hereof, the
Mortgagee agrees with the Note Holders that it shall not enter into any
amendment, waiver or modification of, supplement or consent to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement Assignment,
the Consent and Agreement, the Engine Consent and Agreement or the Participation
Agreement, or any other agreement included in the Trust Indenture Estate, unless
such supplement, amendment, waiver, modification or consent is consented to in
writing by a Majority in Interest of Note Holders, but upon the written request
of a Majority in Interest of Note Holders, the Mortgagee shall from time to time
enter into any such supplement or amendment, or execute and deliver any such
waiver, modification or consent, as may be specified in such request and as may
be (in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by the Owner Trustee and Lessee or,
as may be appropriate, the Airframe Manufacturer or the Engine Manufacturer;
provided, HOWEVER, that, without the consent of each holder of an affected
Equipment Note then outstanding and of the Liquidity Provider, no such amendment
of or supplement to this Trust Indenture, the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement, the Engine Consent and
Agreement or the Participation Agreement or waiver or modification of the terms
of, or consent under, any thereof, shall (i) modify any of the provisions of
this Section 9.01, or of Article II or III or Section 4.02, 4.04(c), 4.04(d),
5.02 or 5.06 hereof, Section 13.3, 14 (except to add an Event of Default) or 16
of the Lease, Section 15.1 of the Participation Agreement, the definitions of
"Event of Default," "Default," "Lease Event of Default," "Lease Default,"
"Majority in Interest of Note Holders," "Make-Whole Amount" or "Note Holder," or

<PAGE>

the percentage of Note Holders required to take or approve any action hereunder,
(ii) reduce the amount, or change the time of payment or method of calculation
of any amount, of Original Amount, Make-Whole Amount, if any, or interest with
respect to any Equipment Note, or alter or modify the provisions of Article III
hereof with respect to the order of priorities in which distribution thereunder
shall be made as among the Note Holders, the Owner Trustee and Lessee, (iii)
reduce, modify or amend any indemnities in favor of the Owner Trustee, the
Mortgagee or the Note Holders (except that the Owner Trustee (in its individual
capacity) or the Mortgagee, as the case may be, may consent to any waiver or
reduction of an indemnity payable to it) or the Pass Through Indemnitees, (iv)
consent to any change in the Trust Indenture or the Lease which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10 or 2.11
hereof or the purchase or exchange of the Equipment Notes other than as
permitted by Section 2.13 hereof, (v) except as contemplated by the Lease or the
Participation Agreement, reduce the amount or extend the time of payment of
Basic Rent, Stipulated Loss Value, or Termination Value for the Aircraft in each
case as set forth in the Lease, or modify, amend or supplement the Lease or
consent to any assignment of the Lease, in either case releasing Lessee from its
obligations in respect of the payment of Basic Rent, Stipulated Loss Value or
Termination Value for the Aircraft or altering the absolute and unconditional
character of the obligations of Lessee to pay Rent as set forth in Sections 3
and 16 of the Lease or (vi) permit the creation of any Lien on the Trust
Indenture Estate or any part thereof other than Permitted Liens or deprive any
Note Holder of the benefit of the Lien of this Trust Indenture on the Trust
Indenture Estate, except as provided in connection with the exercise of remedies
under Article IV hereof.

            (c) At any time after the date hereof, the Owner Trustee and the
Mortgagee may enter into one or more agreements supplemental hereto without the
consent of any Note Holder for any of the following purposes: (i) (a) to cure
any defect or inconsistency herein or in the Equipment Notes, or to make any
change not inconsistent with the provisions hereof (PROVIDED that such change
does not adversely affect the interests of any Note Holder in its capacity
solely as Note Holder) or (b) to cure any ambiguity or correct any mistake; (ii)
to evidence the succession of another party as the Owner Trustee in accordance
with the terms of the Trust Agreement or to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or to make any other provisions with respect
to matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Note Holders in its capacity solely as
Note Holder; (iv) to correct or amplify the description of any property at any
time subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Mortgagee any property subject or required to be subject to the
Lien of this Trust Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of the Owner Trustee
for the benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or the Lessee; (vi) to
add to the rights of the Note Holders; and (vii) to include on the Equipment
Notes any legend as may be required by Law.

      SECTION 9.02. TRUSTEES PROTECTED.

            If, in the opinion of the institution acting as Owner Trustee under

<PAGE>

the Trust Agreement or the institution acting as Mortgagee hereunder, any
document required to be executed by it pursuant to the terms of Section 9.01
hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in its
discretion decline to execute such document.

      SECTION 9.03. DOCUMENTS MAILED TO NOTE HOLDERS.

            Promptly after the execution by the Owner Trustee or the Mortgagee
of any document entered into pursuant to Section 9.01 hereof, the Mortgagee
shall mail, by first class mail, postage prepaid, a copy thereof to Lessee and
to each Note Holder at its address last set forth in the Equipment Note
Register, but the failure of the Mortgagee to mail such copies shall not impair
or affect the validity of such document.

      SECTION 9.04. NO REQUEST NECESSARY FOR LEASE SUPPLEMENT OR TRUST INDENTURE
                    SUPPLEMENT.

            No written request or consent of the Mortgagee, the Note Holders or
the Owner Participant pursuant to Section 9.01 hereof shall be required to
enable the Owner Trustee to enter into any Lease Supplement specifically
required by the terms of the Lease or to execute and deliver a Trust Indenture
Supplement specifically required by the terms hereof.

                                   ARTICLE X

                                  MISCELLANEOUS

      SECTION 10.01. TERMINATION OF TRUST INDENTURE.

            Upon (or at any time after) payment in full of the Original Amount
of, Make-Whole Amount, if any, and interest on and all other amounts due under
all Equipment Notes and provided that there shall then be no other Secured
Obligations due to the Note Holders, the Mortgagee and other holders of Secured
Obligations hereunder or under the Participation Agreement or any other
Operative Agreement, the Owner Trustee shall direct the Mortgagee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft and the Engines from the Lien of this Trust
Indenture and releasing the Lease, the Purchase Agreement, the Purchase
Agreement Assignment with the Consent and Agreement and the Engine Consent and
Agreement attached thereto from the assignment and pledge thereof hereunder and
the Mortgagee shall execute and deliver such instrument as aforesaid and give
written notice thereof to Lessee; PROVIDED, HOWEVER, that this Trust Indenture
and the trusts created hereby shall earlier terminate and this Trust Indenture
shall be of no further force or effect upon any sale or other final disposition
by the Mortgagee of all property constituting part of the Trust Indenture Estate
and the final distribution by the Mortgagee of all monies or other property or
proceeds constituting part of the Trust Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Trust Indenture and
the trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.

<PAGE>

      SECTION 10.02. NO LEGAL TITLE TO TRUST INDENTURE ESTATE IN NOTE HOLDERS.

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

      SECTION 10.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING.

            Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the Mortgagee
made pursuant to the terms of this Trust Indenture shall bind the Note Holders
and shall be effective to transfer or convey all right, title and interest of
the Trustee, the Owner Trustee, the Owner Participant and such holders in and to
such Trust Indenture Estate or part thereof. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Mortgagee.

      SECTION 10.04. TRUST INDENTURE FOR BENEFIT OF OWNER TRUSTEE, MORTGAGEE,
                     OWNER PARTICIPANT, NOTE HOLDERS AND OTHER HOLDERS OF
                     SECURED OBLIGATIONS.

            Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner Trustee, the Mortgagee, the
Owner Participant, the Note Holders and other holders of Secured Obligations,
any legal or equitable right, remedy or claim under or in respect of this Trust
Indenture.

      SECTION 10.05. 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 Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner Trustee, addressed to it at 79 South Main Street, 3rd Floor, Salt
Lake City, Utah 84111 with a copy to the Owner Participant addressed as provided
in clause (iii) below, (ii) if to Mortgagee, addressed to it at its office at
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration, facsimile number (302) 651-8882,
(iii) if to any Participant, Lessee, or any Note Holder, addressed to such party
at such address as such party shall have furnished by notice to the Owner
Trustee and the Mortgagee, or, until an address is so furnished, addressed to
the address of such party (if any) set forth on Schedule 1 to the Participation
Agreement or in the Equipment Note Register. Whenever any notice in writing is
required to be given by the Owner Trustee, any Participant or the Mortgagee or
any Note Holder to any of the other of them, such notice shall be deemed given
and such requirement satisfied when such notice is received, or if such notice
is mailed by certified mail, postage prepaid, three Business Days after being

<PAGE>

mailed, 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 Trust Indenture.

      SECTION 10.06. SEVERABILITY.

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

      SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS.

            No term or provision of this Trust Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Mortgagee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.

      SECTION 10.08. 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 permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. This Trust Indenture and
the Trust Indenture Estate shall not be affected by any amendment or supplement
to the Trust Agreement or by any other action taken under or in respect of the
Trust Agreement, except that each reference in this Trust Indenture to the Trust
Agreement shall mean the Trust Agreement as amended and supplemented from time
to time to the extent permitted hereby, thereby and by the Participation
Agreement. Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.

      SECTION 10.09. 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.

      SECTION 10.10. NORMAL COMMERCIAL RELATIONS.

            Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner Trustee, Mortgagee, any Participant or any bank or other
Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee

<PAGE>

[or any Permitted Sublessee]<F18>, fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.

      SECTION 10.11. GOVERNING LAW; COUNTERPART FORM.

            THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

      SECTION 10.12. VOTING BY NOTE HOLDERS.

            All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.

      SECTION 10.13. BANKRUPTCY.

            It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Mortgagee as assignee of the Owner Trustee hereunder),
shall be entitled to the benefits of Section 1110 with respect to the right to
take possession of the Aircraft, Airframe, Engines and Parts and to enforce any
of its other rights or remedies as provided in the Lease in the event of a case
under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor, and in any
instance where more than one construction is possible of the terms and
conditions hereof or any other pertinent Operative Agreement, each such party
agrees that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.

----------------
<F18>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

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

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

                                     By:________________________________________
                                        Name:
                                        Title:

                                     WILMINGTON TRUST COMPANY, as
                                       Mortgagee

                                     By:________________________________________
                                        Name:
                                        Title:

<PAGE>

                                                                       EXHIBIT A
                                           TO TRUST INDENTURE AND MORTGAGE [___]

                  TRUST INDENTURE AND MORTGAGE [___] SUPPLEMENT

            This TRUST INDENTURE AND MORTGAGE [___] SUPPLEMENT NO. 1, dated
[___________, 20___] (herein called this "Trust Indenture Supplement") of WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but
solely as Owner Trustee (herein called the "Owner Trustee") under that certain
Trust Agreement [___] dated as of [___________, 20___] (the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.

                              W I T N E S S E T H:

            WHEREAS, the Trust Indenture and Mortgage [___], dated as of
[____________, 20___] (as amended and supplemented to the date hereof, the
"Trust Indenture") between the Owner Trustee and Wilmington Trust Company, as
Mortgagee (the "Mortgagee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall particularly
describe the Aircraft, and shall specifically mortgage such Aircraft to the
Mortgagee; and

            WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Indenture
Supplement, together with such counterpart of the Trust Indenture, is being
filed for recordation on the date hereof with the FAA as one document;

            NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the Trust
Indenture Estate covers all of Owner Trustee's right, title and interest in and
to the following described property:

                                    AIRFRAME

            One airframe identified as follows:
                                              FAA
                                          Registration          Manufacturer's
    Manufacturer          Model              Number             Serial Number
 ------------------    -----------     ------------------    -------------------

The Boeing Company

together with all of the Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said airframe.

                                AIRCRAFT ENGINES

            Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:

<PAGE>

    Manufacturer          Manufacturer's Model          Serial Number
 ------------------    --------------------------    -------------------

together with all of Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to either of such
engines.

            Together with all of Owner Trustee's right, title and interest in
and to (a) all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts) and (b)
all Aircraft Documents.

            As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors and assigns,
for the security and benefit of the Loan Participants, the Note Holders and the
other holders of Secured Obligations, in the trust created by the Trust
Indenture, all of the right, title and interest of the Owner Trustee in, to and
under the Lease Supplement of even date herewith covering the property described
above.

            Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.

            TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, in trust for the equal and proportionate
benefit and security of the Loan Participants, the Note Holders and the other
holders of Secured Obligations, except as provided in Section 2.14 and Article
III of the Trust Indenture without any preference, distinction or priority of
any one Equipment Note over any other by reason of priority of time of issue,
sale, negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and subject to the terms and
provisions set forth in the Trust Indenture.

            This Trust Indenture Supplement shall be construed as supplemental
to the Trust Indenture and shall form a part thereof. The Trust Indenture is
each hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.

            AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid Lease

<PAGE>

Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.

                                      * * *

            IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.

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

                                            By:_________________________________
                                               Name:
                                               Title:

<PAGE>

                                                                       EXHIBIT A
                                           TO TRUST INDENTURE AND MORTGAGE [___]

                                   SCHEDULE I

                                  Original Amount        Interest Rate
                               ---------------------  -------------------

Series A-1:

Series A-2:

Series B:

Series C:

Series D:

<PAGE>

                           Equipment Note Amortization

                                                Percentage of Original
            Payment Date                          Amount to be Paid
 ----------------------------------  --------------------------------------------------------------------------------------------------
             CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION
                    SET FORTH IN SECTION 7 OF THIS AGREEMENT
            -------------------------------------------------------

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

                           PARTICIPATION AGREEMENT [____]

                                 Dated as of [____________]

                                      Among

                           CONTINENTAL AIRLINES, INC.,
                                     Owner,

                                       and

                            WILMINGTON TRUST COMPANY,
                         Not in its individual capacity
                      except as expressly provided herein,
                  but solely as Mortgagee, Subordination Agent
           under the Intercreditor Agreement and Pass Through Trustee
           under each of the Applicable Pass Through Trust Agreements

                        _______________________________

                          ONE BOEING MODEL [_____] AIRCRAFT
                      Bearing Manufacturer's Serial No. [______]
                          and U.S. Registration No. [_____]

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

<PAGE>

                                    CONTENTS

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

SECTION 2.  SECURED LOANS; CLOSING.............................................2
            2.1  Making of Loans and Issuance of Equipment Notes...............2
            2.2  Closing.......................................................3

SECTION 3.  [Intentionally omitted]............................................3

SECTION 4.  CONDITIONS PRECEDENT...............................................3
            4.1  Conditions Precedent to the Obligations of the Pass Through
                 Trustees......................................................3
            4.2  Conditions Precedent to Obligations of Mortgagee..............7
            4.3  Conditions Precedent to Obligations of Owner..................7
            4.4  Post-Registration Opinion.....................................8

SECTION 5.  REPRESENTATIONS AND WARRANTIES.....................................9
            5.1  Owner's Representations and Warranties........................9
            5.2  WTC's Representations and Warranties.........................12

SECTION 6.  COVENANTS, UNDERTAKINGS AND AGREEMENTS............................16
            6.1  Covenants of Owner...........................................16
            6.2  Covenants of WTC.............................................18
            6.3  Covenants of Note Holders....................................19
            6.4  Agreements...................................................20

SECTION 7.  CONFIDENTIALITY...................................................24

SECTION 8.  INDEMNIFICATION AND EXPENSES......................................24
            8.1  General Indemnity............................................24
            8.2  Expenses.....................................................31
            8.3  General Tax Indemnity........................................32
            8.4  Payments.....................................................42
            8.5  Interest.....................................................42
            8.6  Benefit of Indemnities.......................................42

SECTION 9.  ASSIGNMENT OR TRANSFER OF INTEREST................................43
            9.1  Note Holders.................................................43
            9.2  Effect of Transfer...........................................43

SECTION 10.  SECTION 1110.....................................................43

<PAGE>

SECTION 11.  CHANGE OF CITIZENSHIP............................................44
             11.1  Generally..................................................44
             11.2  Mortgagee..................................................44

SECTION      12.  MISCELLANEOUS...............................................44
             12.1  Amendments.................................................44
             12.2  Severability...............................................45
             12.3  Survival...................................................45
             12.4  Reproduction of Documents..................................45
             12.5  Counterparts...............................................45
             12.6  No Waiver..................................................46
             12.7  Notices....................................................46
             12.8  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE...........47
             12.9  Third-Party Beneficiary....................................47
             12.10  Entire Agreement..........................................48
             12.11  Further Assurances........................................48

SCHEDULES AND EXHIBITS

SCHEDULE 1 -   Accounts; Addresses
SCHEDULE 2 -   Commitments
SCHEDULE 3 -   Certain Terms
SCHEDULE 4 -   Permitted Countries

EXHIBIT A -    Opinion of special counsel to Owner
EXHIBIT B -    Opinion of corporate counsel to Owner
EXHIBIT C -    Opinion of special counsel to Mortgagee and to the Applicable
               Pass Through Trustees
EXHIBIT D -    Opinion of special counsel in Oklahoma City, Oklahoma

<PAGE>

                          PARTICIPATION AGREEMENT [ ]

     PARTICIPATION AGREEMENT [____], dated as of [__________] (this
"Agreement"), among (a) CONTINENTAL AIRLINES, INC., a Delaware corporation
("Owner"), (b) WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in
its individual capacity, except as expressly provided herein, but solely as
Mortgagee (in its capacity as Mortgagee, "Mortgagee" and in its individual
capacity, "WTC"), (c) WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided herein, but solely as Pass Through Trustee under
each of the Applicable Pass Through Trust Agreements (each, an "Applicable Pass
Through Trustee") and (d) WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly provided herein, but solely as Subordination Agent
under the Intercreditor Agreement ("Subordination Agent").

                                    RECITALS

     A. Owner and Airframe Manufacturer have entered into the Purchase
Agreement, pursuant to which, among other things, Airframe Manufacturer has
agreed to manufacture and sell to Owner and Owner has agreed to purchase from
Airframe Manufacturer, certain aircraft, including the Aircraft.

     B. Pursuant to each of the Pass Through Trust Agreements, the Pass Through
Trusts were created and the Pass Through Certificates were issued and sold.

     C. Each Applicable Pass Through Trustee has agreed to use a portion of the
proceeds from the issuance and sale of the Pass Through Certificates issued by
each Applicable Pass Through Trust to purchase from Owner, on behalf of the
related Applicable Pass Through Trust, the Equipment Note bearing the same
interest rate as the Pass Through Certificates issued by such Pass Through
Trust.

     D. Owner and Mortgagee, concurrently with the execution and delivery
hereof, have entered into the Trust Indenture for the benefit of the Note
Holders, pursuant to which, among other things, Owner agrees (1) to issue
Equipment Notes, in the amounts and otherwise as provided in the Trust
Indenture, and (2) to mortgage, pledge and assign to Mortgagee all of Owner's
right, title and interest in the Collateral to secure the Secured Obligations,
including, without limitation, Owner's obligations under the Equipment Notes.

<PAGE>

     E. The parties hereto wish to set forth in this Agreement the terms and
conditions upon and subject to which the aforesaid transactions shall be
effected.

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

SECTION 1. DEFINITIONS AND CONSTRUCTION

     Capitalized terms used but not defined herein (including in the initial
paragraph and Recitals above) shall have the respective meanings set forth or
incorporated by reference, and shall be construed and interpreted in the manner
described, in Annex A to the Trust Indenture.

SECTION 2. SECURED LOANS; CLOSING

     2.1 MAKING OF LOANS AND ISSUANCE OF EQUIPMENT NOTES

     Subject to the terms and conditions of this Agreement, on the date hereof
or on such other date agreed to by the parties hereto (the "Closing Date"):

     (a)  Each Applicable Pass Through Trustee listed on Schedule 2 shall make a
          secured loan to the Owner in the amount in Dollars opposite such
          Trustee's name on Schedule 2; and

     (b)  The Owner shall issue, pursuant to and in accordance with the
          provisions of Article II of the Trust Indenture, to the Subordination
          Agent as the registered holder on behalf of each such Applicable Pass
          Through Trustee, one or more Equipment Notes, dated the Closing Date,
          of the Series set forth opposite such Trustee's name on Schedule 2, in
          an aggregate principal amount equal to the secured loan made by each
          such Applicable Pass Through Trustee.

     In addition, the Owner shall have the option to issue the Series D
Equipment Notes on or after the Closing Date, subject to the terms of the Note
Purchase Agreement. If Series D Equipment Notes are issued after the Closing
Date, the Note Holder of such Equipment Notes shall be entitled to execute a
counterpart to this Agreement and become a party hereto.

<PAGE>

     2.2    CLOSING

     (a) The Closing of the transactions contemplated hereby shall take place at
the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New
York 10004, or at such other place as the parties shall agree.

     (b) All payments pursuant to this Section 2 shall be made in immediately
available funds to such accounts set forth in Schedule 1 hereto.

SECTION 3. [INTENTIONALLY OMITTED]

SECTION 4. CONDITIONS PRECEDENT

     4.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PASS
         THROUGH TRUSTEES

     The obligation of each Applicable Pass Through Trustee listed on Schedule 2
to make the secured loan described in Section 2.1(a) and to participate in the
transactions contemplated by this Agreement on the Closing Date is subject to
the fulfillment, prior to or on the Closing Date, of the following conditions
precedent:

          4.1.1 EQUIPMENT NOTES

     The Owner shall have tendered the Equipment Notes to be issued to such
Applicable Pass Through Trustees to the Mortgagee for authentication and the
Mortgagee shall have authenticated such Equipment Notes to be issued to such
Applicable Pass Through Trustees and shall have tendered the Equipment Notes to
the Subordination Agent on behalf of such Pass Through Trustee, against receipt
of the loan proceeds, in accordance with Section 2.1.

          4.1.2 DELIVERY OF DOCUMENTS

     The Subordination Agent on behalf of each such Applicable Pass Through
Trustee shall have received executed counterparts or conformed copies of the
following documents:

          (i) this Agreement;

         (ii) the Trust Indenture;

        (iii) the initial Trust Indenture Supplement;

<PAGE>

         (iv) the broker's report and insurance certificates required by
     Section 4.06 of the Trust Indenture;

          (v) the Consent and Agreement and the Engine Consent and Agreement;

         (vi) the Bills of Sale;

        (vii) (A) a copy of the Certificate of Incorporation and By-Laws of
     Owner and resolutions of the board of directors of Owner and/or the
     executive committee thereof, in each case certified as of the Closing Date,
     by the Secretary or an Assistant Secretary of Owner, duly authorizing the
     execution, delivery and performance by Owner of the Operative Agreements to
     which it is party required to be executed and delivered by Owner on or
     prior to the Closing Date in accordance with the provisions hereof and
     thereof; and (B) an incumbency certificate of Owner as to the person or
     persons authorized to execute and deliver the Operative Agreements on
     behalf of Owner;

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

         (ix) the Financing Statements;

          (x) the following opinions of counsel, in each case dated the Closing
     Date:

               (A) an opinion of Hughes Hubbard & Reed LLP, special counsel to
          Owner, substantially in the form of Exhibit A;

               (B) an opinion of Owner's Legal Department, substantially in the
          form of Exhibit B;

               (C) an opinion of Richards, Layton & Finger, special counsel to
          Mortgagee and to the Applicable Pass Through Trustees, substantially
          in the form of Exhibit C;

               (D) an opinion of Lytle Soule & Curlee, special counsel in
          Oklahoma City, Oklahoma, substantially in the form of Exhibit D; and

<PAGE>

          (xi) a copy of a current, valid Standard Certificate of Airworthiness
     for the Aircraft duly issued by the FAA, together with a copy of a duly
     executed application for registration of the Aircraft with the FAA in the
     name of the Owner.

          4.1.3 PERFECTED SECURITY INTEREST

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

          4.1.4 VIOLATION OF LAW

     No change shall have occurred after the date of this Agreement in any
applicable Law that makes it a violation of Law for (a) Owner, any Applicable
Pass Through Trustee, Subordination Agent or Mortgagee to execute, deliver and
perform the Operative Agreements to which any of them is a party or (b) any
Applicable Pass Through Trustee to make the loan contemplated by Section 2.1, to
acquire an Equipment Note or to realize the benefits of the security afforded by
the Trust Indenture.

          4.1.5 REPRESENTATIONS, WARRANTIES AND COVENANTS

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

          4.1.6 NO EVENT OF DEFAULT

     On the Closing Date, no event shall have occurred and be continuing, or
would result from the mortgage of the Aircraft, which constitutes a Default or
an Event of Default.

<PAGE>

          4.1.7 NO EVENT OF LOSS

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

          4.1.8 TITLE

     Owner shall have good title (subject to filing and recordation of the FAA
Bill of Sale with the FAA) to the Aircraft, free and clear of all Liens, except
Permitted Liens.

          4.1.9 CERTIFICATION

     The Aircraft shall have been duly certificated by the FAA as to type and
airworthiness in accordance with the terms of the Purchase Agreement.

          4.1.10 SECTION 1110

     Mortgagee shall be entitled to the benefits of Section 1110 (as currently
in effect) with respect to the right to take possession of the Airframe and
Engines and to enforce any of its other rights or remedies as provided in the
Trust Indenture in the event of a case under Chapter 11 of the Bankruptcy Code
in which Owner is a debtor.

          4.1.11 FILING

     On the Closing Date (a) the FAA Filed Documents shall have been duly filed
for recordation (or shall be in the process of being so duly filed for
recordation) with the FAA in accordance with the Act and (b) each Financing
Statement shall have been duly filed (or shall be in the process of being so
duly filed) in the appropriate jurisdiction.

          4.1.12 NO PROCEEDINGS

     No action or proceeding shall have been instituted, nor shall any action be
threatened in writing, before any Government Entity, nor shall any order,
judgment or decree have been issued or proposed to be issued by any Government
Entity, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or any other Operative Agreement or the
transactions contemplated hereby or thereby.

<PAGE>

          4.1.13 GOVERNMENTAL ACTION

     All appropriate action required to have been taken prior to the Closing
Date by the FAA, or any governmental or political agency, subdivision or
instrumentality of the United States, in connection with the transactions
contemplated by this Agreement shall have been taken, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities required to
be in effect on the Closing Date in connection with the transactions
contemplated by this Agreement shall have been issued.

          4.1.14 NOTE PURCHASE AGREEMENT

     The conditions precedent to the obligations of the Applicable Pass Through
Trustees and the other requirements relating to the Aircraft and the Equipment
Notes set forth in the Note Purchase Agreement shall have been satisfied.

     4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE

     The obligation of Mortgagee to authenticate the Equipment Notes on the
Closing Date is subject to the satisfaction or waiver by Mortgagee, on or prior
to the Closing Date, of the conditions precedent set forth below in this Section
4.2.

          4.2.1 DOCUMENTS

     Executed originals of the agreements, instruments, certificates or
documents described in Section 4.1.2 shall have been received by Mortgagee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Mortgagee.

          4.2.2 OTHER CONDITIONS PRECEDENT

     Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6 and 4.1.10
shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Mortgagee.

     4.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER

     The obligation of Owner to participate in the transaction contemplated
hereby on the Closing Date is subject to the satisfaction or waiver by Owner, on

<PAGE>

or prior to the Closing Date, of the conditions precedent set forth below in
this Section 4.3.

          4.3.1 DOCUMENTS

     Executed originals of the agreements, instruments, certificates or
documents described in Section 4.1.2 shall have been received by Owner, except
as specifically provided therein, and shall be satisfactory to Owner, unless the
failure to receive any such agreement, instrument, certificate or document is
the result of any action or inaction by Owner. In addition, the Owner shall have
received the following:

          (i) (A) an incumbency certificate of WTC as to the person or persons
     authorized to execute and deliver the Operative Agreements on behalf of WTC
     and (B) a copy of the Certificate of Incorporation and By-Laws and general
     authorizing resolution of the board of directors (or executive committee)
     or other satisfactory evidence of authorization of WTC, certified as of the
     Closing Date by the Secretary or Assistant or Attesting Secretary of WTC,
     which authorize the execution, delivery and performance by WTC of the
     Operative Agreements to which it is a party; and

          (ii) an Officer's Certificate of WTC, dated as of the Closing Date,
     stating that its representations and warranties in its individual capacity
     or as Mortgagee, an Applicable Pass Through Trustee or Subordination Agent,
     as the case may be, set forth in this Agreement are true and correct as of
     the Closing Date (or, to the extent that any such representation and
     warranty expressly relates to an earlier date, true and correct as of such
     earlier date);

          4.3.2 OTHER CONDITIONS PRECEDENT

     Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.7,
4.1.8, 4.1.9, 4.1.10, 4.1.11, 4.1.12 and 4.1.13 shall have been satisfied or
waived by Owner, unless the failure of any such condition to be satisfied is the
result of any action or inaction by Owner.

     4.4 POST-REGISTRATION OPINION

     Promptly upon the registration of the Aircraft and the recordation of the
FAA Filed Documents pursuant to the Act, Owner will cause Lytle Soule & Curlee,
special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each Pass

<PAGE>

Through Trustee and Mortgagee a favorable opinion or opinions addressed to each
of them with respect to such registration and recordation.

SECTION 5. REPRESENTATIONS AND WARRANTIES

     5.1 OWNER'S REPRESENTATIONS AND WARRANTIES

     Owner represents and warrants to each Pass Through Trustee, Subordination
Agent and Mortgagee that:

          5.1.1 ORGANIZATION; QUALIFICATION

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

          5.1.2 CORPORATE AUTHORIZATION

     Owner has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by its Certificate of Incorporation or By-Laws) to
authorize the execution and delivery of each of the Operative Agreements to
which it is party, and the performance of its obligations thereunder.

          5.1.3 NO VIOLATION

     The execution and delivery by Owner of the Operative Agreements to which it
is party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby, do not and will not (a) violate any provision of the Certificate of
Incorporation or By-Laws of Owner, (b) violate any Law applicable to or binding
on Owner or (c) violate or constitute any default under (other than any
violation or default that would not result in a Material Adverse Change to
Owner), or result in the creation of any Lien (other than as permitted under the

<PAGE>

Trust Indenture) upon the Aircraft under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, loan or other
material agreement, instrument or document to which Owner is a party or by which
Owner or any of its properties is bound.

          5.1.4 APPROVALS

     The execution and delivery by Owner of the Operative Agreements to which
Owner is a party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby do not and will not require the consent or approval of, or the giving of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or other
holder of any Debt of Owner and (b) any Government Entity, other than the filing
of (x) the FAA Filed Documents and the Financing Statements (and continuation
statements periodically) and (y) filings, recordings, notices or other
ministerial actions pursuant to any routine recording, contractual or regulatory
requirements applicable to it.

          5.1.5 VALID AND BINDING AGREEMENTS

     The Operative Agreements to which Owner is a party have been duly
authorized, executed and delivered by Owner and, assuming the due authorization,
execution and delivery thereof by the other party or parties thereto, constitute
the legal, valid and binding obligations of Owner and are enforceable against
Owner in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar Laws affecting the rights of
creditors generally and general principles of equity, whether considered in a
proceeding at law or in equity.

          5.1.6 REGISTRATION AND RECORDATION

     Except for (a) the registration of the Aircraft with the FAA pursuant to
the Act in the name of Owner, (b) the filing for recordation (and recordation)
of the FAA Filed Documents, (c) the filing of the Financing Statements (and
continuation statements relating thereto at periodic intervals), and (d) the
affixation of the nameplates referred to in Section 4.02(f) of the Trust
Indenture, no further action, including any filing or recording of any document
(including any financing statement in respect thereof under Article 9 of the
UCC) is necessary in order to establish and perfect Mortgagee's security

<PAGE>

interest in the Aircraft as against Owner and any other Person, in each case, in
any applicable jurisdictions in the United States.

          5.1.7 CHIEF EXECUTIVE OFFICE

     The chief executive office (as such term is defined in Article 9 of the
UCC) of Owner is located at 1600 Smith Street, Houston, Texas 77002.

          5.1.8 NO EVENT OF LOSS

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

          5.1.9 COMPLIANCE WITH LAWS

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

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

     (c) Owner is not an "investment company" or a company controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

          5.1.10 SECURITIES LAWS

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

<PAGE>

          5.1.11 BROKER'S FEES

     No Person acting on behalf of Owner is or will be entitled to any broker's
fee, commission or finder's fee in connection with the Transactions, other than
the fees and expenses payable by Owner in connection with the sale of the Pass
Through Certificates.

          5.1.12 SECTION 1110

     Mortgagee is entitled to the benefits of Section 1110 (as currently in
effect) with respect to the right to take possession of the Airframe and Engines
and to enforce any of its other rights or remedies as provided in the Trust
Indenture in the event of a case under Chapter 11 of the Bankruptcy Code in
which Owner is a debtor.

     5.2 WTC'S REPRESENTATIONS AND WARRANTIES

     WTC represents and warrants (with respect to Section 5.2.10, solely in its
capacity as Subordination Agent) to Owner that:

          5.2.1 ORGANIZATION, ETC.

     WTC is a Delaware banking corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware, holding a valid
certificate to do business as a Delaware banking corporation with banking
authority to execute and deliver, and perform its obligations under, the
Applicable Pass Through Trustee Agreements and the Operative Agreements to which
it is a party.

          5.2.2 CORPORATE AUTHORIZATION

     WTC has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by Law or by its Certificate of Incorporation or By-Laws)
to authorize the execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party and the performance of its obligations thereunder.

<PAGE>

          5.2.3 NO VIOLATION

     The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party, the performance by WTC, in its individual capacity or as Mortgagee, a
Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date of the
transactions contemplated thereby, do not and will not (a) violate any provision
of the Certificate of Incorporation or By-Laws of WTC, (b) violate any Law
applicable to or binding on WTC, in its individual capacity or (except in the
case of any Law relating to any Plan) as Mortgagee, a Pass Through Trustee or
Subordination Agent, or (c) violate or constitute any default under (other than
any violation or default that would not result in a Material Adverse Change to
WTC, in its individual capacity or Mortgagee, a Pass Through Trustee or
Subordination Agent), or result in the creation of any Lien (other than the Lien
of the Trust Indenture) upon any property of WTC, in its individual capacity or
as Mortgagee, a Pass Through Trustee or Subordination Agent, or any of WTC's
subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other agreement, instrument or
document to which WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, is a party or by which WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, or any of their respective properties is bound.

          5.2.4 APPROVALS

     The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party, the performance by WTC, in its individual capacity or as Mortgagee, a
Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date by WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, of the transactions contemplated thereby do not and
will not require the consent, approval or authorization of, or the giving of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or other

<PAGE>

holder of any Debt of WTC or (b) any Government Entity, other than the filing of
the FAA Filed Documents and the Financing Statements.

          5.2.5 VALID AND BINDING AGREEMENTS

     The Pass Through Trustee Agreements and the Operative Agreements to which
it is a party have been duly authorized, executed and delivered by WTC and,
assuming the due authorization, execution and delivery by the other party or
parties thereto, constitute the legal, valid and binding obligations of WTC, in
its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, and are enforceable against WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the
case may be, in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar Laws affecting the rights of creditors
generally and general principles of equity, whether considered in a proceeding
at law or in equity.

          5.2.6 CITIZENSHIP

     WTC is a Citizen of the United States.

          5.2.7 NO LIENS

     On the Closing Date, there are no Liens attributable to WTC in respect of
all or any part of the Collateral.

          5.2.8 LITIGATION

     There are no pending or, to the Actual Knowledge of WTC, threatened actions
or proceedings against WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, before any court, administrative agency
or tribunal which, if determined adversely to WTC, in its individual capacity or
as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
would materially adversely affect the ability of WTC, in its individual capacity
or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may
be, to perform its obligations under any of the Mortgagee Agreements, the Pass
Through Trustee Agreements or the Subordination Agent Agreements.

<PAGE>

          5.2.9 SECURITIES LAWS

     Neither WTC nor any person authorized to act on its behalf has directly or
indirectly offered any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Collateral or any of the Equipment Notes
or any other interest in or security under the Collateral for sale to, or
solicited any offer to acquire any such interest or security from, or has sold
any such interest or security to, any Person other than the Subordination Agent
and the Pass Through Trustees, except for the offering and sale of the Pass
Through Certificates.

          5.2.10 INVESTMENT

     The Equipment Notes to be acquired by the Subordination Agent are being
acquired by it for the account of the Applicable Pass Through Trustees, for
investment and not with a view to any resale or distribution thereof, except
that, subject to the restrictions on transfer set forth in Section 9, the
disposition by it of its Equipment Notes shall at all times be within its
control.

          5.2.11 TAXES

     There are no Taxes payable by any Applicable Pass Through Trustee or WTC,
as the case may be, imposed by the State of Delaware or any political
subdivision or taxing authority thereof in connection with the execution,
delivery and performance by such Pass Through Trustee or WTC, as the case may
be, of this Agreement or any of the Pass Through Trustee Agreements (other than
franchise or other taxes based on or measured by any fees or compensation
received by any such Pass Through Trustee or WTC, as the case may be, for
services rendered in connection with the transactions contemplated by any of the
Pass Through Trust Agreements), and there are no Taxes payable by any Applicable
Pass Through Trustee or WTC, as the case may be, imposed by the State of
Delaware or any political subdivision thereof in connection with the
acquisition, possession or ownership by any such Pass Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured by
any fees or compensation received by any such Pass Through Trustee or WTC, as
the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be taxable as

<PAGE>

corporations, but, rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code or as a partnership under
Subchapter K of the Code, such trusts will not be subject to any Taxes imposed
by the State of Delaware or any political subdivision thereof;

          5.2.12 BROKER'S FEES

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

SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS

     6.1 COVENANTS OF OWNER

     Owner covenants and agrees, at its own cost and expense, with Note Holder
and Mortgagee as follows:

          6.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER

     Owner shall at all times maintain its corporate existence, except as
permitted by Section 4.07 of the Trust Indenture, and shall at all times remain
a U.S. Air Carrier.

          6.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

     Owner will give Mortgagee timely written notice (but in any event within 30
days prior to the expiration of the period of time specified under applicable
Law to prevent lapse of perfection) of any relocation of its chief executive
office (as such term is defined in Article 9 of the UCC) from its then present
location and will promptly take any action required by Section 6.1.3(c) as a
result of such relocation.

          6.1.3 CERTAIN ASSURANCES

     (a) Owner shall duly execute, acknowledge and deliver, or shall cause to be
executed, acknowledged and delivered, all such further agreements, instruments,
certificates or documents, and shall do and cause to be done such further acts
and things, in any case, as Mortgagee shall reasonably request for accomplishing
the purposes of this Agreement and the other Operative Agreements, PROVIDED THAT
any instrument or other document so executed by Owner will not expand any
obligations or limit any rights of Owner in respect of the transactions
contemplated by any Operative Agreement.

<PAGE>

     (b) Owner shall promptly take such action with respect to the recording,
filing, re-recording and refiling of the Trust Indenture and any supplements
thereto, including, without limitation, the initial Trust Indenture Supplement,
as shall be necessary to continue the perfection and priority of the Lien
created by the Trust Indenture.

     (c) Owner, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any combination, consolidation or merger of the
Owner, or any relocation of its chief executive office) in respect of the
Financing Statements to be prepared and, subject only to the execution and
delivery thereof by Mortgagee, duly and timely filed and recorded, or filed for
recordation, to the extent permitted under the Act (with respect to the FAA
Filed Documents) or the UCC or similar law of any other applicable jurisdiction
(with respect to such other documents).

     (d) If the Aircraft has been registered in a country other than the United
States pursuant to Section 4.02(e) of the Trust Indenture, Owner will furnish to
Mortgagee annually after such registration, commencing with the calendar year
after such registration is effected, an opinion of special counsel reasonably
satisfactory to Mortgagee stating that, in the opinion of such counsel, either
that (i) such action has been taken with respect to the recording, filing,
rerecording and refiling of the Operative Agreements and any supplements and
amendments thereto as is necessary to establish, perfect and protect the Lien
created by the Trust Indenture, reciting the details of such actions, or (ii) no
such action is necessary to maintain the perfection of such Lien.

          6.1.4 SECURITIES LAWS

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

          6.1.5. NOTICE OF LEASE

     Owner shall give to Standard & Poor's Ratings Services, a division of
McGraw-Hill Companies, Inc., a copy of any notice regarding a lease of the

<PAGE>

Aircraft required to be given to the Mortgagee pursuant to clause (w) of the
first sentence of the penultimate paragraph of Section 4.02(b) of the Mortgage,
at the time such notice is given to Mortgagee, if at such time Standard & Poor's
is then rating the Pass Through Certificates.

     6.2 COVENANTS OF WTC

     WTC in its individual capacity or as Mortgagee, each Applicable Pass
Through Trustee or Subordination Agent, as the case may be, covenants and agrees
with Owner as follows:

          6.2.1 LIENS

     WTC (a) will not directly or indirectly create, incur, assume or suffer to
exist any Lien attributable to it on or with respect to all or any part of the
Collateral or the Aircraft, (b) will, at its own cost and expense, promptly take
such action as may be necessary to discharge any Lien attributable to WTC on all
or any part of the Collateral or the Aircraft and (c) will personally hold
harmless and indemnify Owner, each Note Holder, each of their respective
Affiliates, successors and permitted assigns, and the Collateral from and
against (i) any and all Expenses, and (ii) any interference with the possession,
operation or other use of all or any part of the Aircraft, imposed on, incurred
by or asserted against any of the foregoing as a consequence of any such Lien.

          6.2.2 SECURITIES ACT

     WTC in its individual capacity or as Mortgagee, an Applicable Pass Through
Trustee or Subordination Agent, will not offer any beneficial interest or
Security relating to the ownership of the Aircraft or any interest in the
Collateral, or any of the Equipment Notes or any other interest in or security
under the Trust Indenture for sale to, or solicit any offer to acquire any such
interest or security from, or sell any such interest or security to, any Person
in violation of the Securities Act or applicable state or foreign securities
Laws, provided that the foregoing shall not be deemed to impose on WTC any
responsibility with respect to any such offer, sale or solicitation by any other
party hereto.

          6.2.3 PERFORMANCE OF AGREEMENTS

     WTC, in its individual capacity and as Mortgagee, an Applicable Pass
Through Trustee or Subordination Agent, as the case may be, shall perform its
obligations under the Pass Through Trustee Agreements and the Operative

<PAGE>

Agreements in accordance with the terms thereof.

          6.2.4 WITHHOLDING TAXES

     WTC shall indemnify (on an after-tax basis) and hold harmless Owner against
any United States withholding taxes (and related interest, penalties and
additions to tax) as a result of the failure by WTC to withhold on payments to
any Note Holder if such Note Holder failed to provide to Mortgagee necessary
certificates or forms to substantiate the right to exemption from such
withholding tax.

     6.3 COVENANTS OF NOTE HOLDERS

     Each Note Holder (including Subordination Agent) as to itself only
covenants and agrees with Owner and Mortgagee as follows:

          6.3.1 WITHHOLDING TAXES

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

          6.3.2 TRANSFER; COMPLIANCE

     (a) Such Note Holder will (i) not transfer any Equipment Note or interest
therein in violation of the Securities Act or applicable state or foreign
securities Law; PROVIDED, that the foregoing provisions of this section shall
not be deemed to impose on such Note Holder any responsibility with respect to
any such offer, sale or solicitation by any other party hereto, and (ii) perform
and comply with the obligations specified to be imposed on it (as a Note Holder)
under each of the Trust Indenture and the form of Equipment Note set forth in
the Trust Indenture.

     (b) Except for the transfer of the interests of each Applicable Pass
Through Trustee in the Equipment Notes to the trustee of the Related Trust (as
defined in each Applicable Pass Through Trust Agreement) in accordance with the
related Applicable Pass Through Trust Agreement, each Note Holder will not sell,

<PAGE>

assign, convey, exchange or otherwise transfer any Equipment Note or any
interest in, or represented by, any Equipment Note (it being understood that
this provision is not applicable to the Pass Through Certificates) unless the
proposed transferee thereof first provides Owner with both of the following:

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

          (ii) a written covenant that it will not transfer any Equipment Note
     or any interest in, or represented by, any Equipment Note unless the
     subsequent transferee also makes the representation described in clause (i)
     above and agrees to comply with this clause (ii).

     6.4 AGREEMENTS

          6.4.1 QUIET ENJOYMENT

     Each Applicable Pass Through Trustee, Subordination Agent, each Note Holder
and Mortgagee agrees as to itself with Owner that, so long as no Event of
Default shall have occurred and be continuing, such Person shall not (and shall
not permit any Affiliate or other Person claiming by, through or under it to)
interfere with Owner's rights in accordance with the Indenture to the quiet
enjoyment, possession and use of the Aircraft.

          6.4.2 CONSENTS

     Each Pass Through Trustee, Subordination Agent and Mortgagee covenants and
agrees, for the benefit of Owner, that it shall not unreasonably withhold its

<PAGE>

consent to any consent or approval requested of it under the terms of any of the
Operative Agreements which by its terms is not to be unreasonably withheld.

          6.4.3 INSURANCE

     Each Pass Through Trustee, Subordination Agent, Mortgagee and each Note
Holder agrees not to obtain or maintain insurance for its own account as
permitted by Section 4.06 of the Trust Indenture if such insurance would limit
or otherwise adversely affect the coverage of any insurance required to be
obtained or maintained by Owner pursuant to Section 4.06 of the Trust Indenture.

          6.4.4 EXTENT OF INTEREST OF NOTE HOLDERS

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

          6.4.5 FOREIGN REGISTRATION

     Each Note Holder and Mortgagee hereby agree, for the benefit of Owner but
subject to the provisions of Section 4.02(b) of the Trust Indenture:

     (a) that Owner shall be entitled to register the Aircraft or cause the
Aircraft to be registered in a country other than the United States subject to
compliance with the following:

          (i) each of the following requirements is satisfied:

               (A)  no Special Default or Event of Default shall have occurred
                    and be continuing at the time of such registration;

               (B)  such proposed change of registration is made in connection
                    with a Permitted Lease to a Permitted Air Carrier;

               (C)  such country is a country with which the United States then
                    maintains normal diplomatic relations or, if Taiwan, the
                    United States then maintains diplomatic relations at least
                    as good as those in effect on the Closing Date;

<PAGE>

          (ii) the Mortgagee shall have received an opinion of counsel (subject
     to customary exceptions) reasonably satisfactory to the Mortgagee addressed
     to Mortgagee as to the effect that:

               (A) such country would recognize the Owner's ownership interest
          in the Aircraft;

               (B) after giving effect to such change in registration, the Lien
          of the Trust Indenture on the Owner's right, title and interest in and
          to the Aircraft shall continue as a valid and duly perfected first
          priority security interest and all filing, recording or other action
          necessary to protect the same shall have been accomplished (or, if
          such opinion cannot be given at the time of such proposed change in
          registration because such change in registration is not yet effective,
          (1) the opinion shall detail what filing, recording or other action is
          necessary and (2) the Mortgagee shall have received a certificate from
          Owner that all possible preparations to accomplish such filing,
          recording and other action shall have been done, and such filing,
          recording and other action shall be accomplished and a supplemental
          opinion to that effect shall be delivered to the Mortgagee on or prior
          to the effective date of such change in registration;

               (C) unless Owner or the Permitted Air Carrier shall have agreed
          to provide insurance covering the risk of requisition of use of the
          Aircraft by the government of such country (so long as the Aircraft is
          registered under the laws of such country), the laws of such country
          require fair compensation by the government of such country payable in
          currency freely convertible into Dollars and freely removable from
          such country (without license or permit, unless Owner prior to such
          proposed reregistration has obtained such license or permit) for the
          taking or requisition by such government of such use; and

               (D) it is not necessary, solely as a consequence of such change
          in registration and without giving effect to any other activity of the
          Mortgagee (or any Affiliate of the Mortgagee), for the Mortgagee to
          qualify to do business in such jurisdiction as a result of such
          reregistration in order to exercise any rights or remedies with
          respect to the Aircraft.

<PAGE>

     (b) In addition, as a condition precedent to any change in registration
Owner shall have given to Mortgagee assurances reasonably satisfactory to
Mortgagee:

          (i)  to the effect that the provisions of Section 4.06 of the Trust
               Indenture have been complied with after giving effect to such
               change of registration;

         (ii) of the payment by Owner of all reasonable out-of-pocket expenses
              of each Note Holder and Mortgagee in connection with such change
              of registry, including, without limitation (1) the reasonable
              fees and disbursements of counsel to Mortgagee, (2) any filing or
              recording fees, Taxes or similar payments incurred in connection
              with the change of registration of the Aircraft and the creation
              and perfection of the security interest therein in favor of
              Mortgagee for the benefit of Note Holders, and (3) all costs and
              expenses incurred in connection with any filings necessary to
              continue in the United States the perfection of the security
              interest in the Aircraft in favor of Mortgagee for the benefit of
              Note Holders; and

        (iii) to the effect that the tax and other indemnities in favor of
              each person named as an indemnitee under any other Operative
              Agreement afford each such person substantially the same
              protection as provided prior to such change of registration (or
              Owner shall have agreed upon additional indemnities that,
              together with such original indemnities, in the reasonable
              judgment of Mortgagee, afford such protection).

          6.4.6 INTEREST IN CERTAIN ENGINES

     Each Note Holder and Mortgagee agree, for the benefit of each of the
lessor, conditional seller, mortgagee or secured party of any airframe or engine
leased to, or purchased by, Owner or any Permitted Lessee subject to a lease,
conditional sale, trust indenture or other security agreement that it will not
acquire or claim, as against such lessor, conditional seller, mortgagee or
secured party, any right, title or interest in any engine as the result of such
engine being installed on the Airframe at any time while such engine is subject
to such lease, conditional sale, trust indenture or other security agreement and

<PAGE>

owned by such lessor or conditional seller or subject to a trust indenture or
security interest in favor of such mortgagee or secured party.

SECTION 7. CONFIDENTIALITY

     Owner, Note Holders and Mortgagee shall keep the Participation Agreement
and Annex B to the Trust Indenture confidential and shall not disclose, or cause
to be disclosed, the same to any Person, except (A) to prospective and permitted
transferees of Owner's, a Note Holder's, the Liquidity Provider's, Mortgagee's
or other Indenture Indemnitee's interest or their respective counsel or special
counsel, independent insurance brokers, auditors, or other agents who agree to
hold such information confidential, (B) to Owner's, a Note Holder's, the
Liquidity Provider's, a Pass Through Trustee's, Mortgagee's or other Indenture
Indemnitee's counsel or special counsel, independent insurance brokers,
auditors, or other agents, Affiliates or investors who agree to hold such
information confidential, (C) as may be required by any statute, court or
administrative order or decree, legal process or governmental ruling or
regulation, including those of any applicable insurance regulatory bodies
(including, without limitation, the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors or any stock exchange, (D) with respect to a Note Holder or any Pass
Through Trustee, to a nationally recognized rating agency for the purpose of
obtaining a rating on the Equipment Notes or the Pass Through Certificates or to
support an NAIC rating for the Equipment Notes or (E) such other Persons as are
reasonably deemed necessary by the disclosing party in order to protect the
interests of such party or for the purposes of enforcing such documents by such
party; PROVIDED, that any and all disclosures permitted by clauses (C), (D), or
(E) above shall be made only to the extent necessary to meet the specific
requirements or needs of the Persons making such disclosures.

SECTION 8. INDEMNIFICATION AND EXPENSES

     8.1 GENERAL INDEMNITY

          8.1.1 INDEMNITY

     Whether or not any of the transactions contemplated hereby are consummated,
Owner shall indemnify, protect, defend and hold harmless each Indemnitee from,
against and in respect of, and shall pay on a net after-tax basis, any and all
Expenses of any kind or nature whatsoever that may be imposed on, incurred by or

<PAGE>

asserted against any Indemnitee, relating to, resulting from, or arising out of
or in connection with, any one or more of the following:

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

     (b) The Aircraft, the Airframe, any Engine or any Part, including, without
limitation, with respect thereto, (i) the manufacture, design, purchase,
acceptance, nonacceptance or rejection, ownership, registration, reregistration,
deregistration, delivery, nondelivery, lease, sublease, assignment, possession,
use or non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage, airworthiness,
replacement, repair, sale, substitution, return, abandonment, redelivery or
other disposition of the Aircraft, any Engine or any Part, (ii) any claim or
penalty arising out of violations of applicable Laws by Owner (or any Permitted
Lessee), (iii) tort liability, whether or not arising out of the negligence of
any Indemnitee (whether active, passive or imputed), (iv) death or property
damage of passengers, shippers or others, (v) environmental control, noise or
pollution and (vi) any Liens in respect of the Aircraft, any Engine or any Part;

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

     (d) Any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Owner under any Operative Agreement to which it is party or any
Pass Through Agreement or the falsity of any representation or warranty of Owner
in any Operative Agreement to which it is party or any Pass Through Agreement.

          8.1.2 EXCEPTIONS

     Notwithstanding anything contained in Section 8.1.1, Owner shall not be
required to indemnify, protect, defend and hold harmless any Indemnitee pursuant
to Section 8.1.1 in respect of any Expense of such Indemnitee:

     (a) For any Taxes or a loss of Tax benefit, whether or not Owner is
required to indemnify therefor pursuant to Section 8.3;

<PAGE>

     (b) Except to the extent attributable to acts or events occurring prior
thereto, acts or events (other than acts or events related to the performance by
Owner of its obligations pursuant to the terms of the Operative Agreements) that
occur after the Trust Indenture is required to be terminated in accordance with
Section 11.01 of the Trust Indenture; PROVIDED, that nothing in this clause (b)
shall be deemed to exclude or limit any claim that any Indemnitee may have under
applicable Law by reason of an Event of Default or for damages from Owner for
breach of Owner's covenants contained in the Operative Agreements or to release
Owner from any of its obligations under the Operative Agreements that expressly
provide for performance after termination of the Trust Indenture;

     (c) To the extent attributable to any Transfer (voluntary or involuntary)
by or on behalf of such Indemnitee of any Equipment Note or interest therein,
except for out-of-pocket costs and expenses incurred as a result of any such
Transfer pursuant to the exercise of remedies under any Operative Agreement;

     (d) [Intentionally Omitted]

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

     (f) [Intentionally Omitted]

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

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

     (i) To the extent attributable to the offer or sale by such Indemnitee or
any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the
Pass Through Certificates, or any similar interest, in violation of the
Securities Act or other applicable federal, state or foreign securities Laws
(other than any thereof caused by acts or omissions of Owner);

<PAGE>

     (j) (i) With respect to any Indemnitee (other than Mortgagee), to the
extent attributable to the failure of the Mortgagee to distribute funds received
and distributable by it in accordance with the Trust Indenture, (ii) with
respect to any Indemnitee (other than the Subordination Agent), 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,
(iii) with respect to any Indemnitee (other than the Pass Through Trustees), to
the extent attributable to the failure of a Pass Through Trustee to distribute
funds received and distributable by it in accordance with the Pass Through Trust
Agreements, (iv) with respect to any Indemnitee (other than the Escrow Agent),
to the extent attributable to the failure of the Escrow Agent to pay funds
received and payable by it in accordance with any Escrow Agreement, (v) with
respect to any Indemnitee (other than the Paying Agent), to the extent
attributable to the failure of the Paying Agent to distribute funds received and
distributable by it in accordance with any Escrow Agreement, (vi) to the extent
attributable to the failure of the Depositary to pay funds payable by it in
accordance with any Deposit Agreement, (vii) with respect to Mortgagee, to the
extent attributable to the negligence or willful misconduct of Mortgagee in the
distribution of funds received and distributable by it in accordance with the
Trust Indenture, (viii) with respect to the Subordination Agent, to the extent
attributable to the negligence or willful misconduct of the Subordination Agent
in the distribution of funds received and distributable by it in accordance with
the Intercreditor Agreement, (ix) with respect to the Pass Through Trustees, to
the extent attributable to the negligence or willful misconduct of a Pass
Through Trustee in the distribution of funds received and distributable by it in
accordance with the Pass Through Trust Agreements, (x) with respect to the
Escrow Agent, to the extent attributable to the negligence or willful misconduct
of the Escrow Agent in the payment of funds received and payable by it in
accordance with any Escrow Agreement, and (xi) with respect to the Paying Agent,
to the extent attributable to the negligence or willful misconduct of the Paying
Agent in the distribution of funds received and distributable by it in
accordance with any Escrow Agreement;

     (k) Other than during the continuation of an Event of Default, to the
extent attributable to the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any Operative
Agreement or Pass Through Agreement other than such as have been requested by

<PAGE>

Owner or as are required by or made pursuant to the terms of the Operative
Agreements or Pass Through Agreements (unless such requirement results from the
actions of an Indemnitee not required by or made pursuant to the Operative
Agreements or the Pass Through Agreements);

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

     (m) To the extent that it is an ordinary and usual operating or overhead
expense;

     (n) [Intentionally Omitted]

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

     (p) If another provision of an Operative Agreement or a Pass Through
Agreement specifies the extent of Owner's responsibility or obligation with
respect to such Expense, to the extent arising from other than failure of Owner
to comply with such specified responsibility or obligation; or

     (q) To the extent incurred by or asserted against an 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 8.1, a Person shall be considered a "related"
Indemnitee with respect to an Indemnitee if such Person is an Affiliate or
employer of such Indemnitee, a director, officer, employee, agent, or servant of
such Indemnitee or any such Affiliate or a successor or permitted assignee of
any of the foregoing.

          8.1.3 SEPARATE AGREEMENT

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

          8.1.4 NOTICE

     If a claim for any Expense that an Indemnitee shall be indemnified against
under this Section 8.1 is made, such Indemnitee shall give prompt written notice
thereof to Owner. Notwithstanding the foregoing, the failure of any Indemnitee
to notify Owner as provided in this Section 8.1.4, or in Section 8.1.5, shall

<PAGE>

not release Owner from any of its obligations to indemnify such Indemnitee
hereunder, except to the extent that such failure results in an additional
Expense to Owner (in which event Owner shall not be responsible for such
additional expense) or materially impairs Owner's ability to contest such claim.

          8.1.5 NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS;
                LIMITATIONS

     (a) In case any action, suit or proceeding shall be brought against any
Indemnitee for which Owner is responsible under this Section 8.1, such
Indemnitee shall notify Owner of the commencement thereof and Owner may, at its
expense, participate in and to the extent that it shall wish (subject to the
provisions of the following paragraph), assume and control the defense thereof
and, subject to Section 8.1.5(c), settle or compromise the same.

     (b) Owner or its insurer(s) shall have the right, at its or their expense,
to investigate or, if Owner or its insurer(s) shall agree not to dispute
liability to the Indemnitee giving notice of such action, suit or proceeding
under this Section 8.1.5 for indemnification hereunder or under any insurance
policies pursuant to which coverage is sought, control the defense of, any
action, suit or proceeding, relating to any Expense for which indemnification is
sought pursuant to this Section 8.1, and each Indemnitee shall cooperate with
Owner or its insurer(s) with respect thereto; PROVIDED, that Owner shall not be
entitled to control the defense of any such action, suit, proceeding or
compromise any such Expense during the continuance of any Event of Default. In
connection with any such action, suit or proceeding being controlled by Owner,
such Indemnitee shall have the right to participate therein, at its sole cost
and expense, with counsel reasonably satisfactory to Owner; PROVIDED, that such
Indemnitee's participation does not, in the reasonable opinion of the
independent counsel appointed by the Owner or its insurers to conduct such
proceedings, interfere with the defense of such case.

     (c) In no event shall any Indemnitee enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Owner, which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified with respect to such Expense under
this Section 8.1.

<PAGE>

     (d) In the case of any Expense indemnified by the Owner hereunder which is
covered by a policy of insurance maintained by Owner pursuant to Section 4.06 of
the Indenture, at Owner's expense, each Indemnitee agrees to 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.

     (e) If an Indemnitee is not a party to this Agreement, Owner may require
such Indemnitee to agree in writing to the terms of this Section 8 and Section
12.8 prior to making any payment to such Indemnitee under this Section 8.

     (f) Nothing contained in this Section 8.1.5 shall be deemed to require an
Indemnitee to contest any Expense or to assume responsibility for or control of
any judicial proceeding with respect thereto.

          8.1.6 INFORMATION

     Owner will provide the relevant Indemnitee with such information not within
the control of such Indemnitee, as is in Owner's control or is reasonably
available to Owner, which such Indemnitee may reasonably request and will
otherwise cooperate with such Indemnitee so as to enable such Indemnitee to
fulfill its obligations under Section 8.1.5. The Indemnitee shall supply Owner
with such information not within the control of Owner, as is in such
Indemnitee's control or is reasonably available to such Indemnitee, which Owner
may reasonably request to control or participate in any proceeding to the extent
permitted by Section 8.1.5.

          8.1.7 EFFECT OF OTHER INDEMNITIES; SUBROGATION;
                FURTHER ASSURANCES

     Upon the payment in full by Owner of any indemnity provided for under this
Agreement, Owner, without any further action and to the full extent permitted by
Law, will be subrogated to all rights and remedies of the person indemnified
(other than with respect to any of such Indemnitee's insurance policies or in
connection with any indemnity claim such Indemnitee may have under Section 6.03
or 8.01 of the Trust Indenture) in respect of the matter as to which such
indemnity was paid. Each Indemnitee will give such further assurances or
agreements and cooperate with Owner to permit Owner to pursue such claims, if
any, to the extent reasonably requested by Owner and at Owner's expense.

<PAGE>

          8.1.8 REFUNDS

     If an Indemnitee receives any refund, in whole or in part, with respect to
any Expense paid by Owner hereunder, it will promptly pay the amount refunded
(but not an amount in excess of the amount Owner or any of its insurers has paid
in respect of such Expense) over to Owner unless an Event of Default shall have
occurred and be continuing, in which case such amounts shall be paid over to
Mortgagee to hold as security for Owner's obligations under the Operative
Agreements or, if requested by Owner, applied to satisfy such obligations.

     8.2 EXPENSES

          8.2.1 INVOICES AND PAYMENT

     The Mortgagee, the Applicable Pass Through Trustees and the Subordination
Agent shall promptly submit to Owner for its prompt approval (which shall not be
unreasonably withheld) copies of invoices in reasonable detail of the
Transaction Expenses for which it is responsible for providing information as
they are received (but in no event later than the 90th day after the Closing
Date). If so submitted and approved, the Owner agrees promptly, but in any event
no later than the 105th day after the Closing Date, to pay Transaction Expenses.

          8.2.2 PAYMENT OF OTHER EXPENSES

     Owner shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii)
all reasonable out-of-pocket costs and expenses (including the reasonable fees
and disbursements of counsel) incurred by Mortgagee or any Note Holder
attributable to any waiver, amendment or modification of any Operative Agreement
to the extent requested by Owner.

          8.2.2 PAYMENT OF OTHER EXPENSES

     Owner shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii)
all reasonable out-of-pocket costs and expenses (including the reasonable fees
and disbursements of counsel) incurred by Mortgagee or any Note Holder
attributable to any waiver, amendment or modification of any Operative Agreement
to the extent requested by Owner.

<PAGE>

     8.3 GENERAL TAX INDEMNITY

          8.3.1 GENERAL

     Except as provided in Section 8.3.2, Owner agrees that each payment paid by
Owner under the Equipment Notes, and any other payment or indemnity paid by
Owner to a Tax Indemnitee under any Operative Agreement, shall be free of all
withholdings or deductions with respect to Taxes of any nature (other than U.S.
federal, state or local withholding taxes on, based on or measured by gross or
net income), and in the event that Owner shall be required by applicable law to
make any such withholding or deduction for any such payment (x) Owner shall make
all such withholdings or deductions, (y) the amount payable by Owner shall be
increased so that after making all required withholdings or deductions such Tax
Indemnitee receives the same amount that it would have received had no such
withholdings or deductions been made, and (z) Owner shall pay the full amount
withheld or deducted to the relevant Taxing Authority in accordance with
applicable law. Except as provided in Section 8.3.2 and whether or not any of
the transactions contemplated hereby are consummated, Owner shall pay,
indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes
imposed by any Taxing Authority that may from time to time be imposed on or
asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or
any Part or any interest in any of the foregoing (whether or not indemnified
against by any other Person), upon or with respect to the Operative Agreements
or the transactions or payments contemplated thereby, including but not limited
to any Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any
Engine, any Part, any Operative Agreement (including without limitation any
Equipment Notes) or any data or any other thing delivered or to be delivered
under an Operative Agreement, (y) the purchase, manufacture, acceptance,
rejection, sale, transfer of title, return, ownership, mortgaging, delivery,
transport, charter, rental, lease, re-lease, sublease, assignment, possession,
repossession, presence, use, condition, storage, preparation, maintenance,
modification, alteration, improvement, operation, registration, transfer or
change of registration, reregistration, repair, replacement, overhaul, location,
control, the imposition of any Lien, financing, refinancing requested by the
Owner, abandonment or other disposition of the Aircraft, the Airframe, any
Engine, any Part, any data or any other thing delivered or to be delivered under
an Operative Agreement or (z) interest, fees or any other income, proceeds,

<PAGE>

receipts or earnings, whether actual or deemed, arising upon, in connection
with, or in respect of, any of the Operative Agreements (including the property
or income or other proceeds with respect to property held as part of the
Collateral) or the transactions contemplated thereby.

          8.3.2 CERTAIN EXCEPTIONS

     The provisions of Section 8.3.1 shall not apply to, and Owner shall have no
liability hereunder for, Taxes:

     (a) imposed on a Tax Indemnitee by the federal government of the United
States or any Taxing Authority or governmental subdivision of the United States
or therein (including any state or local Taxing Authority) (i) on, based on, or
measured by, gross or net income or gross or net receipts, including capital
gains taxes, excess profits taxes, minimum taxes from tax preferences,
alternative minimum taxes, branch profits taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes and estate taxes, and any
withholding taxes on, based on or measured by gross or net income or receipts or
(ii) on, or with respect to, or measured by, capital or net worth or in the
nature of a franchise tax or a tax for the privilege of doing business (other
than, in the case of clause (i) or (ii), sales, use, license or property Taxes);

     (b) imposed on a Tax Indemnitee by any Taxing Authority or governmental
subdivision thereof or therein outside of the United States (including any
Taxing Authority in or of a territory, possession or commonwealth of the United
States) (i) on, based on, or measured by, gross or net income or gross or net
receipts, including capital gains taxes, excess profits taxes, minimum taxes
from tax preferences, alternative minimum taxes, branch profits taxes,
accumulated earnings taxes, personal holding company taxes, succession taxes and
estate taxes, and any withholding taxes on, based on or measured by gross or net
income or receipts or (ii) on, or with respect to, or measured by, capital or
net worth or in the nature of a franchise tax or a tax for the privilege of
doing business (other than, in the case of clause (i) or (ii), (A) sales, use,
license or property Taxes, or (B) any Taxes imposed by any Taxing Authority
(other than a Taxing Authority within whose jurisdiction such Tax Indemnitee is
incorporated or organized or maintains its principal place of business) if such
Tax Indemnitee would not have been subject to Taxes of such type by such
jurisdiction but for (I) the location, use or operation of the Aircraft, the
Airframe, any Engine or any Part thereof by an Owner Person within the
jurisdiction of the Taxing Authority imposing such Tax, or (II) the activities

<PAGE>

of any Owner Person in such jurisdiction, including, but not limited to, use of
any other aircraft by Owner in such jurisdiction, (III) the status of any Owner
Person as a foreign entity or as an entity owned in whole or in part by foreign
persons, (IV) Owner having made (or having been deemed to have made) payments to
such Tax Indemnitee from the relevant jurisdiction or (V) in the case of the
Pass Through Trustees, the Note Holders or any related Tax Indemnitee, the Owner
being incorporated or organized or maintaining a place of business or conducting
activities in such jurisdiction);

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

     (d) that are being contested as provided in Section 8.3.4 hereof;

     (e) imposed on any Tax Indemnitee to the extent that such Taxes result from
the gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof;

     (f) imposed on or with respect to a Tax Indemnitee (including the
transferee in those cases in which the Tax on transfer is imposed on, or is
collected from, the transferee) as a result of a transfer or other disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee of any interest in the Aircraft, the Airframe, any Engine or any
Part, any interest arising under the Operative Agreements or any Equipment Note
or as a result of a transfer or disposition (including a deemed transfer or
disposition) of any interest in a Tax Indemnitee (other than (A) a substitution
or replacement of the Aircraft, the Airframe, any Engine or any Part by an Owner
Person that is treated for Tax purposes as a transfer or disposition, or (B) a
transfer pursuant to an exercise of remedies upon an Event of Default that shall
have occurred and have been continuing);

     (g) Taxes in excess of those that would have been imposed had there not
been a transfer or other disposition by or to such Tax Indemnitee or a related
Tax Indemnitee described in paragraph (f) above;

     (h) consisting of any interest, penalties or additions to tax imposed on a
Tax Indemnitee as a result of (in whole or in part) failure of such Tax
Indemnitee or a related Tax Indemnitee to file any return properly and timely,

<PAGE>

unless such failure shall be caused by the failure of Owner to fulfill its
obligations, if any, under Section 8.3.6 with respect to such return;

     (i) resulting from, or that would not have been imposed but for, any Liens
arising as a result of claims against, or acts or omissions of, or otherwise
attributable to such Tax Indemnitee or a related Tax Indemnitee that the Owner
is not obligated to discharge under the Operative Agreements;

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

     (k) in the nature of an intangible or similar Tax (i) upon or with respect
to the value or principal amount of the interest of any Note Holder in any
Equipment Note or the loan evidenced thereby but only if such Taxes are in the
nature of franchise Taxes or result from the Tax Indemnitee doing business in
the taxing jurisdiction and are imposed because of the place of incorporation or
the activities unrelated to the transactions contemplated by the Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;

     (l) imposed on a Tax Indemnitee by a Taxing Authority of a jurisdiction
outside the United States to the extent that such Taxes would not have been
imposed but for a connection between the Tax Indemnitee or a related Tax
Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions
contemplated by the Operative Agreements; or

     (m) Taxes relating to ERISA or Section 4975 of the Code.

     For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that
are successors, assigns, agents, servants or Affiliates of such Tax Indemnitee
shall be related Tax Indemnitees.

          8.3.3 PAYMENT

     (a) Owner's indemnity obligation to a Tax Indemnitee under this Section 8.3
shall equal the amount which, after taking into account any Tax imposed upon the
receipt or accrual of the amounts payable under this Section 8.3 and any tax
benefits actually recognized by such Tax Indemnitee as a result of the

<PAGE>

indemnifiable Tax (including, without limitation, any benefits recognized as a
result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit
against Taxes not indemnifiable under this Section 8.3), shall equal the amount
of the Tax indemnifiable under this Section 8.3.

     (b) At Owner's request, the computation of the amount of any indemnity
payment owed by Owner or any amount owed by a Tax Indemnitee to Owner pursuant
to this Section 8.3 shall be verified and certified by an independent public
accounting firm selected by such Tax Indemnitee and reasonably satisfactory to
Owner. Such verification shall be binding. The costs of such verification
(including the fee of such public accounting firm) shall be borne by Owner
unless such verification shall result in an adjustment in Owner's favor of 5% or
more of the net present value of the payment as computed by such Tax Indemnitee,
in which case the costs shall be paid by such Tax Indemnitee.

     (c) Each Tax Indemnitee shall provide Owner with such certifications,
information and documentation as shall be in such Tax Indemnitee's possession
and as shall be reasonably requested by Owner to minimize any indemnity payment
pursuant to this Section 8.3; provided, that notwithstanding anything to the
contrary contained herein, no Tax Indemnitee shall be required to provide Owner
with any Tax returns.

     (d) Each Tax Indemnitee shall promptly forward to Owner any written notice,
bill or advice received by it from any Taxing Authority concerning any Tax for
which it seeks indemnification under this Section 8.3. Owner shall pay any
amount for which it is liable pursuant to this Section 8.3 directly to the
appropriate Taxing Authority if legally permissible or upon demand of a Tax
Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a
contest occurs in accordance with Section 8.3.4, within 30 days after a Final
Determination (as defined below)), but in no event more than one Business Day
prior to the date the Tax to which such amount payable hereunder relates is due.
If requested by a Tax Indemnitee in writing, Owner shall furnish to the
appropriate Tax Indemnitee the original or a certified copy of a receipt for
Owner's payment of any Tax paid by Owner or such other evidence of payment of
such Tax as is acceptable to such Tax Indemnitee. Owner shall also furnish
promptly upon written request such data as any Tax Indemnitee may reasonably
require to enable such Tax Indemnitee to comply with the requirements of any
taxing jurisdiction unless such data is not reasonably available to Owner or,
unless such data is specifically requested by a Taxing Authority, is not
customarily furnished by domestic air carriers under similar circumstances. For

<PAGE>

purposes of this Section 8.3, a "Final Determination" shall mean (i) a
decision, judgment, decree or other order by any court of competent jurisdiction
that occurs pursuant to the provisions of Section 8.3.4, which decision,
judgment, decree or other order has become final and unappealable, (ii) a
closing agreement or settlement agreement entered into in accordance with
Section 8.3.4 that has become binding and is not subject to further review or
appeal (absent fraud, misrepresentation, etc.), or (iii) the termination of
administrative proceedings and the expiration of the time for instituting a
claim in a court proceeding.

     (e) If any Tax Indemnitee shall actually realize a tax savings by reason of
any Tax paid or indemnified by Owner pursuant to this Section 8.3 (whether such
tax savings shall be by means of a foreign tax credit, depreciation or cost
recovery deduction or otherwise) and such savings is not otherwise taken into
account in computing such payment or indemnity such Tax Indemnitee shall pay to
Owner an amount equal to the lesser of (i) the amount of such tax savings, plus
any additional tax savings recognized as the result of any payment made pursuant
to this sentence, when, as, if, and to the extent, realized or (ii) the amount
of all payments pursuant to this Section 8.3 by Owner to such Tax Indemnitee
(less any payments previously made by such Tax Indemnitee to Owner pursuant to
this Section 8.3.3 (e)) (and the excess, if any, of the amount described in
clause (i) over the amount described in clause (ii) shall be carried forward and
applied to reduce pro tanto any subsequent obligations of Owner to make payments
to such Tax Indemnitee pursuant to this Section 8.3); provided, that such Tax
Indemnitee shall not be required to make any payment pursuant to this sentence
so long as a Lease Event of Default of a monetary nature has occurred and is
continuing. If a tax benefit is later disallowed or denied, the disallowance or
denial shall be treated as a Tax indemnifiable under Section 8.3.1 without
regard to the provisions of Section 8.3.2 (other than Section 8.3.2 (f)). Each
such Tax Indemnitee shall in good faith use reasonable efforts in filing its tax
returns and in dealing with Taxing Authorities to seek and claim any such tax
benefit.

          8.3.4 CONTEST

     (a) If a written claim is made against a Tax Indemnitee for Taxes with
respect to which Owner could be liable for payment or indemnity hereunder, or if
a Tax Indemnitee makes a determination that a Tax is due for which Owner could
have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give
Owner notice in writing of such claim (provided, that failure to so notify Owner
shall not relieve Owner of its indemnity obligations hereunder unless such
failure to notify effectively forecloses Owner's rights to require a contest of

<PAGE>

such claim) and shall take no action with respect to such claim without the
prior written consent of Owner for 30 days following the receipt of such notice
by Owner; provided, that, in the case of a claim made against a Tax Indemnitee,
if such Tax Indemnitee shall be required by law to take action prior to the end
of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so
inform Owner, and such Tax Indemnitee shall take no action for as long as it is
legally able to do so (it being understood that a Tax Indemnitee shall be
entitled to pay the Tax claimed and sue for a refund prior to the end of such
30-day period if (i)(A) the failure to so pay the Tax would result in
substantial penalties (unless immediately reimbursed by Owner) and the act of
paying the Tax would not materially prejudice the right to contest or (B) the
failure to so pay would result in criminal penalties and (ii) such Tax
Indemnitee shall take any action so required in connection with so paying the
Tax in a manner that is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to
keep such information confidential other than to the extent necessary in order
to contest the claim) furnish Owner with copies of any requests for information
from any Taxing Authority relating to such Taxes with respect to which Owner may
be required to indemnify hereunder. If requested by Owner in writing within 30
days after its receipt of such notice, such Tax Indemnitee shall, at the expense
of Owner (including, without limitation, all reasonable costs, expenses and
reasonable attorneys' and accountants' fees and disbursements), in good faith
contest (or, if permitted by applicable law, allow Owner to contest) through
appropriate administrative and judicial proceedings the validity, applicability
or amount of such Taxes by (I) resisting payment thereof, (II) not paying the
same except under protest if protest is necessary and proper or (III) if the
payment is made, using reasonable efforts to obtain a refund thereof in an
appropriate administrative and/or judicial proceeding. If requested to do so by
Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial
decision, except that the Tax Indemnitee shall not be required to pursue any
appeals to the United States Supreme Court. If and to the extent the Tax
Indemnitee is able to separate the contested issue or issues from other issues
arising in the same administrative or judicial proceeding that are unrelated to
the transactions contemplated by the Operative Agreements without, in the good
faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee,
such Tax Indemnitee shall permit Owner to control the conduct of any such

<PAGE>

proceeding and shall provide to Owner (at Owner's cost and expense) with such
information or data that is in such Tax Indemnitee's control or possession that
is reasonably necessary to conduct such contest. In the case of a contest
controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in
good faith regarding the manner of contesting such claim and shall keep Owner
reasonably informed regarding the progress of such contest. A Tax Indemnitee
shall not fail to take any action expressly required by this Section 8.3.4
(including, without limitation, any action regarding any appeal of an adverse
determination with respect to any claim) or settle or compromise any claim
without the prior written consent of the Owner (except as contemplated by
Section 8.3.4(b) or (c)).

     (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be
required to pursue any contest (or to permit Owner to pursue any contest) unless
(i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable
costs and expenses incurred by such Tax Indemnitee in connection with contesting
such Taxes, including, without limitation, all reasonable out of pocket costs
and expenses and reasonable attorneys' and accountants' fees and disbursements,
(ii) if such contest shall involve the payment of the claim, Owner shall advance
the amount thereof (to the extent indemnified hereunder) plus interest,
penalties and additions to tax with respect thereto that are required to be paid
prior to the commencement of such contest on an interest-free after-Tax basis to
such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any
net realized tax benefits resulting from such advance including any tax benefits
resulting from making such payment), (iii) such Tax Indemnitee shall have
reasonably determined that the action to be taken will not result in any
material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall
have made provisions to protect the interests of any such Tax Indemnitee in a
manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax
Indemnitee agrees to notify Owner in writing promptly after it becomes aware of
any such risk), (iv) no Lease Event of Default shall have occurred and be
continuing unless Owner has provided security for its obligations hereunder by
advancing to such Tax Indemnitee before proceeding or continuing with such
contest, the amount of the Tax being contested, plus any interest and penalties
and an amount estimated in good faith by such Tax Indemnitee for expenses, and
(v) prior to commencing any judicial action controlled by Owner, Owner shall
have acknowledged its liability for such claim hereunder, provided that Owner
shall not be bound by its acknowledgment if the Final Determination articulates
conclusions of law and fact that demonstrate that Owner has no liability for the

<PAGE>

contested amounts hereunder. Notwithstanding the foregoing, if any Tax
Indemnitee shall release, waive, compromise or settle any claim which may be
indemnifiable by Owner pursuant to this Section 8.3 without the written
permission of Owner, Owner's obligation to indemnify such Tax Indemnitee with
respect to such claim (and all directly related claims and claims based on the
outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject
to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount
previously paid or advanced to such Tax Indemnitee with respect to such claim,
plus interest at the rate that would have been payable by the relevant Taxing
Authority with respect to a refund of such Tax.

     (c) Notwithstanding anything contained in this Section 8.3, a Tax
Indemnitee will not be required to contest the imposition of any Tax and shall
be permitted to settle or compromise any claim without Owner's consent if such
Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3
with respect to such Tax (and any directly related claim and any claim the
outcome of which is determined based upon the outcome of such claim), (ii) shall
pay to Owner any amount previously paid or advanced by Owner pursuant to this
Section 8.3 with respect to such Tax, plus interest at the rate that would have
been payable by the relevant Taxing Authority with respect to a refund of such
Tax, and (iii) shall agree to discuss with Owner the views or positions of any
relevant Taxing Authority with respect to the imposition of such Tax.

          8.3.5 REFUND

     If any Tax Indemnitee shall receive a refund of, or be entitled to a credit
against other liability for, all or any part of any Taxes paid, reimbursed or
advanced by Owner, such Tax Indemnitee shall pay to Owner within 30 days of such
receipt an amount equal to the lesser of (a) the amount of such refund or credit
plus any net tax benefit (taking into account any Taxes incurred by such Tax
Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment by
such Tax Indemnitee made pursuant to this sentence (including this clause (a))
and (b) such tax payment, reimbursement or advance by Owner to such Tax
Indemnitee theretofore made pursuant to this Section 8.3 (and the excess, if
any, of the amount described in clause (a) over the amount described in clause
(b) shall be carried forward and applied to reduce pro tanto any subsequent
obligation of Owner to make payments to such Tax Indemnitee pursuant to this

<PAGE>

Section 8.3). If, in addition to such refund or credit, such Tax Indemnitee
shall receive (or be credited with) an amount representing interest on the
amount of such refund or credit, such Tax Indemnitee shall pay to Owner within
30 days of such receipt or realization of such credit that proportion of such
interest that shall be fairly attributable to Taxes paid, reimbursed or advanced
by Owner prior to the receipt of such refund or realization of such credit.

          8.3.6 TAX FILING

     If any report, return or statement is required to be filed with respect to
any Tax which is subject to indemnification under this Section 8.3, Owner shall
timely file the same (except for any such report, return or statement which a
Tax Indemnitee has timely notified the Owner in writing that such Tax Indemnitee
intends to file, or for which such Tax Indemnitee is required by law to file, in
its own name); provided, that the relevant Tax Indemnitee shall furnish Owner
with any information in such Tax Indemnitee's possession or control that is
reasonably necessary to file any such return, report or statement and is
reasonably requested in writing by Owner (it being understood that the Tax
Indemnitee shall not be required to furnish copies of its actual tax returns,
although it may be required to furnish relevant information contained therein).
Owner shall either file such report, return or statement and send a copy of such
report, return or statement to such Tax Indemnitee, or, where Owner is not
permitted to file such report, return or statement, it shall notify such Tax
Indemnitee of such requirement and prepare and deliver such report, return or
statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
within a reasonable time prior to the time such report, return or statement is
to be filed.

          8.3.7 FORMS

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

<PAGE>

          8.3.8 NON-PARTIES

     If a Tax Indemnitee is not a party to this Agreement, Owner may require the
Tax Indemnitee to agree in writing, in a form reasonably acceptable to Owner, to
the terms of this Section 8.3 and Section 15.8 prior to making any payment to
such Tax Indemnitee under this Section 8.3.

          8.3.9 SUBROGATION

     Upon payment of any Tax by Owner pursuant to this Section 8.3 to or on
behalf of a Tax Indemnitee, Owner, without any further action, shall be
subrogated to any claims that such Tax Indemnitee may have relating thereto.
Such Tax Indemnitee shall cooperate with Owner (to the extent such cooperation
does not result in any unreimbursed cost, expense or liability to such Tax
Indemnitee) to permit Owner to pursue such claims.

     8.4 PAYMENTS

     Any payments made pursuant to Section 8.1 or 8.3 shall be due on the 60th
day after demand therefor and shall be made directly to the relevant Indemnitee
or Tax Indemnitee or to Owner, in immediately available funds at such bank or to
such account as specified by such Indemnitee or Tax Indemnitee or Owner, as the
case may be, in written directives to the payor, or, if no such direction shall
have been given, by check of the payor payable to the order of, and mailed to,
such Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified
mail, postage prepaid, at its address as set forth in this Agreement.

     8.5 INTEREST

     If any amount, payable by Owner, any Indemnitee or any Tax Indemnitee under
Section 8.1 or 8.3 is not paid when due, the person obligated to make such
payment shall pay on demand, to the extent permitted by Law, to the person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the same is paid, at the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.

     8.6 BENEFIT OF INDEMNITIES

     The obligations of Owner in respect of all indemnities, obligations,
adjustments and payments in Section 8.1 or 8.3 are expressly made for the

<PAGE>

benefit of, and shall be enforceable by, the Indemnitee or Tax Indemnitee
entitled thereto, notwithstanding any provision of the Trust Indenture.

SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST

     9.1 NOTE HOLDERS

     Subject to Section 6.3.2 hereof and Section 2.07 of the Trust Indenture,
any Note Holder may, at any time and from time to time, Transfer or grant
participations in all or any portion of the Equipment Notes and/or all or any
portion of its beneficial interest in its Equipment Notes to any person (it
being understood that the sale or issuance of Pass Through Certificates by a
Pass Through Trustee shall not be considered a Transfer or participation);
PROVIDED, that any participant in any such participations shall not have any
direct rights under the Operative Agreements or any Lien on all or any part of
the Aircraft or the Collateral and Owner shall not have any increased liability
or obligations as a result of any such participation. In the case of any such
Transfer, the Transferee, by acceptance of Equipment Notes in connection with
such Transfer, shall be deemed to be bound by all of the covenants of Note
Holders contained in the Operative Agreements.

     9.2 EFFECT OF TRANSFER

     Upon any Transfer in accordance with Section 9.1 (other than any Transfer
by any Note Holder, to the extent it only grants participations in Equipment
Notes or in its beneficial interest therein), Transferee shall be deemed a
"Note Holder," for all purposes of this Agreement and the other
Operative Agreements, and the transferring Note Holder shall be released from
all of its liabilities and obligations under this Agreement and any other
Operative Agreements to the extent such liabilities and obligations arise after
such Transfer and, in each case, to the extent such liabilities and obligations
are assumed by the Transferee; PROVIDED, that such transferring Note Holder (and
its respective Affiliates, successors, assigns, agents, servants,
representatives, directors and officers) will continue to have the benefit of
any rights or indemnities under any Operative Agreement vested or relating to
circumstances, conditions, acts or events prior to such Transfer.

SECTION 10. SECTION 1110

     It is the intention of each of the Owner, the Note Holders (such intention
being evidenced by each of their acceptance of an Equipment Note), and Mortgagee

<PAGE>

that Mortgagee shall be entitled to the benefits of Section 1110 in the event of
a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

SECTION 11. CHANGE OF CITIZENSHIP

     11.1 GENERALLY

     Without prejudice to the representations, warranties or covenants regarding
the status of any party hereto as a Citizen of the United States, each of Owner,
WTC and Mortgagee agrees that it will, immediately upon obtaining knowledge of
any facts that would cast doubt upon its continuing status as a Citizen of the
United States and promptly upon public disclosure of negotiations in respect of
any transaction which would or might adversely affect such status, notify in
writing all parties hereto of all relevant matters in connection therewith.

     11.2 MORTGAGEE

     Upon WTC giving any notice in accordance with Section 11.1, Mortgagee shall
(if and so long as such citizenship is necessary under the Act as in effect at
such time or, if it is not necessary, if and so long as Mortgagee's citizenship
could have any adverse effect on Owner, or any Note Holder), subject to Section
9.02 of the Trust Indenture, resign as Mortgagee promptly upon its ceasing to be
such a citizen.

SECTION 12. MISCELLANEOUS

     12.1 AMENDMENTS

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

<PAGE>

     12.2 SEVERABILITY

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

     12.3 SURVIVAL

     The indemnities set forth herein shall survive the delivery or return of
the Aircraft, the Transfer of any interest by any Note Holder of its Equipment
Note and the expiration or other termination of this Agreement or any other
Operative Agreement.

     12.4 REPRODUCTION OF DOCUMENTS

     This Agreement, all schedules and exhibits hereto and all agreements,
instruments and documents relating hereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed and (b)
financial statements, certificates and other information previously or hereafter
furnished to any party hereto, may be reproduced by such party by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process, and such party may destroy any original documents so
reproduced. Any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by such
party in the regular course of business) and any enlargement, facsimile or
further reproduction of such reproduction likewise is admissible in evidence.

     12.5 COUNTERPARTS

     This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed

<PAGE>

shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.

     12.6 NO WAIVER

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

     12.7 NOTICES

     Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers and other
communications required or permitted to be made, given, furnished or filed
hereunder shall be in writing (it being understood that the specification of a
writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this
Agreement or other applicable Operative Agreement, and shall be personally
delivered, sent by facsimile or telecommunication transmission (which in either
case provides written confirmation to the sender of its delivery), sent by
registered mail or certified mail, return receipt requested, postage prepaid, or
sent by overnight courier service, in each case to the respective address, or
facsimile number set forth for such party in Schedule 1, or to such other
address, facsimile or other number as each party hereto may hereafter specify by
notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by facsimile
or telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.

<PAGE>

     12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

     (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

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

     (c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 12.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 12.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.

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

     (e) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

     12.9 THIRD-PARTY BENEFICIARY

     This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than the Indenture Indemnitees, each of which is an intended

<PAGE>

third party beneficiary with respect to the provisions of Section 8.1 and the
persons referred to in Section 6.4.6, which are intended third party
beneficiaries with respect to such Section) with any rights of any nature
whatsoever against any of the parties hereto and no person not a party hereto
(other than the Indenture Indemnitees, with respect to the provisions of Section
8.1, and the persons referred to in Section 6.4.6 with respect to the provisions
of such Section) shall have any right, power or privilege in respect of any
party hereto, or have any benefit or interest, arising out of this Agreement.

     12.10 ENTIRE AGREEMENT

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

     12.11 FURTHER ASSURANCES

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

                     [This space intentionally left blank]

<PAGE>

     IN WITNESS WHEREOF, each of the parties has caused this Participation
Agreement to be duly executed and delivered as of the day and year first above
written.

                                            CONTINENTAL AIRLINES, INC.,
                                              Owner

                                            By_________________________________
                                              Name:
                                              Title:

                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as Mortgagee

                                            By_________________________________
                                              Name:
                                              Title:

                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as Pass Through
                                              Trustee under the Pass Through
                                              Trust Agreement for the
                                              Continental Airlines Pass Through
                                              Trust, 2001-1A-1-0

                                            By_________________________________
                                              Name:
                                              Title:

<PAGE>
                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as Pass Through
                                              Trustee under the Pass Through
                                              Trust Agreement for the
                                              Continental Airlines Pass Through
                                              Trust, 2001-1A-2-0

                                            By_________________________________
                                              Name:
                                              Title:

                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as Pass Through
                                              Trustee under the Pass Through
                                              Trust Agreement for the
                                              Continental Airlines Pass Through
                                              Trust, 2001-1B-0

                                            By_________________________________
                                              Name:
                                              Title:

                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as Pass Through
                                              Trustee under the Pass Through
                                              Trust Agreement for the
                                              Continental Airlines Pass Through
                                              Trust, 2001-1C-0

                                            By_________________________________
                                              Name:
                                              Title:

<PAGE>
                                            WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              except as expressly provided
                                              herein, but solely as
                                              Subordination Agent

                                            By_________________________________
                                              Name:
                                              Title:

<PAGE>

                                                            SCHEDULE 1
                                                               TO
                                                       PARTICIPATION AGREEMENT

                              ACCOUNTS; ADDRESSES
<TABLE>
<CAPTION>

                                ACCOUNT FOR PAYMENTS            ADDRESS FOR NOTICES
                                ____________________            ___________________
<S>                             <C>                             <C>

CONTINENTAL AIRLINES, INC.   The Chase Manhattan Bank        Continental Airlines, Inc.
                             New York, New York 10081        1600 Smith Street
                             Account No.: 910-2-499291       Dept. HQS-FN
                             ABA#: 021-000021                Houston, Texas 77002
                             Attention: Darlene Cafferata    Attention: Senior Vice
                             Voice: 312-807-4084               President - Finance
                             Facsimile: 312-807-4501         Facsimile: (713) 324-2447
                             Reference: Continental [___]

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
MORTGAGEE                    New York, New York 10081        Rodney Square North
                             Account No.: 920-1-014363       1100 North Market Street
                             ABA#: 021-000021                Wilmington, Delaware 19890
                             Attention: Corporate Trust      Attention: Corporate Trust
                              Administration                  Administration
                             Reference: Continental [___]    Facsimile: (302) 651-8882

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
AS SUBORDINATION AGENT       New York, New York 10081        Rodney Square North
                             Account No.: 920-1-014363       1100 North Market Street
                             ABA#: 021-000021                Wilmington, Delaware 19890
                             Attention: Corporate Trust      Attention: Corporate Trust
                              Administration                   Administration
                             Reference: Continental [___]    Facsimile:  (302) 651-8882

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
AS PASS THROUGH TRUSTEE      New York, New York  10081       Rodney Square North
FOR THE 2001-1A-1 PASS       Account No.: 920-1-014363       1100 North Market Street
THROUGH TRUST                ABA#: 021-000021                Wilmington, Delaware  19890
                             Attention: Corporate Trust      Attention:  Corporate Trust
                              Administration                   Administration
                              Reference: Continental [__]    Facsimile:  (302) 651-8882

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
AS PASS THROUGH TRUSTEE      New York, New York  10081       Rodney Square North
FOR THE 2001-1A-2 PASS       Account No.: 920-1-014363       1100 North Market Street
THROUGH TRUST                ABA#: 021-000021                Wilmington, Delaware  19890
                             Attention: Corporate Trust      Attention:  Corporate Trust
                              Administration                  Administration
                              Reference: Continental [__]    Facsimile:  (302) 651-8882

</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                               ACCOUNT FOR PAYMENTS            ADDRESS FOR NOTICES
                               ____________________            ___________________
<S>                             <C>                             <C>

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
AS PASS THROUGH TRUSTEE      New York, New York  10081       Rodney Square North
FOR THE 2001-1B PASS         Account No.: 920-1-014363       1100 North Market Street
THROUGH TRUST                ABA#:  021-000021               Wilmington, Delaware  19890
                             Attention:  Corporate Trust     Attention:  Corporate Trust
                              Administration                   Administration
                             Reference:  Continental [__]    Facsimile:  (302) 651-8882

WILMINGTON TRUST COMPANY,    The Chase Manhattan Bank        Wilmington Trust Company
AS PASS THROUGH TRUSTEE      New York, New York  10081       Rodney Square North
FOR THE 2001-1C PASS         Account No.: 920-1-014363       1100 North Market Street
THROUGH TRUST                ABA#:  021-000021               Wilmington, Delaware  19890
                             Attention:  Corporate Trust     Attention:  Corporate Trust
                              Administration                   Administration
                             Reference:  Continental [__]    Facsimile:  (302) 651-8882

[WILMINGTON TRUST COMPANY,   The Chase Manhattan Bank        Wilmington Trust Company
AS PASS THROUGH TRUSTEE      New York, New York  10081       Rodney Square North
FOR THE 2001-1D PASS         Account No.: 920-1-014363       1100 North Market Street
THROUGH TRUST]               ABA#:  021-000021               Wilmington, Delaware  19890
                             Attention:  Corporate Trust     Attention:  Corporate Trust
                              Administration                   Administration
                             Reference:  Continental [__]    Facsimile:  (302) 651-8882
</TABLE>

<PAGE>

                                                       SCHEDULE 2 - COMMITMENTS
                                                        PARTICIPATION AGREEMENT

                                  COMMITMENTS

   PASS THROUGH                  SERIES OF                      DOLLAR AMOUNT
     TRUSTEE                   EQUIPMENT NOTES                     OF LOAN
__________________           __________________               __________________

<PAGE>

                                                      SCHEDULE 3 - CERTAIN TERMS
                                                        PARTICIPATION AGREEMENT

                                 CERTAIN TERMS

         DEFINED TERM                                             DEFINITION
        ______________                                          ______________

           [OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

<PAGE>

                                               SCHEDULE 4 - PERMITTED COUNTRIES
                                                    PARTICIPATION AGREEMENT

                              PERMITTED COUNTRIES

<TABLE>
<CAPTION>
<S>                                     <C>

Argentina                               Malaysia

Australia                               Malta

Austria                                 Mexico

Bahamas                                 Morocco

Belgium                                 Netherlands

Brazil                                  New Zealand

Canada                                  Norway

Chile                                   Paraguay

Denmark                                 People's Republic of China

Egypt                                   Philippines

Ecuador                                 Portugal

Finland                                 Republic of China (Taiwan)

France                                  Singapore

Germany                                 South Africa

Greece                                  South Korea

Hungary                                 Spain

Iceland                                 Sweden

India                                   Switzerland

Indonesia                               Thailand

Ireland                                 Trinidad and Tobago

Italy                                   United Kingdom

Japan                                   Uruguay

Luxembourg                              Venezuela

</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]