Document:

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      CONFIDENTIAL: ANNEXES B, C AND D AND SCHEDULES 1, 2, 3 AND 4 OF THIS
          LEASE AGREEMENT ARE SUBJECT TO RESTRICTIONS ON DISSEMINATION
    SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN)
    -------------------------------------------------------------------------
================================================================================

                            LEASE AGREEMENT [______]

                          Dated as of [_______________]

                                     Between

                              FIRST SECURITY BANK,
                              NATIONAL ASSOCIATION,
                         Not in its Individual Capacity,
                      except as expressly provided herein,
                          but solely as Owner Trustee,

                                     Lessor

                                       and

                           CONTINENTAL AIRLINES, INC.,

                                     Lessee
    -------------------------------------------------------------------------

                      One Boeing Model [737-824] [737-924]
                          [767-424] [777-224] Aircraft
              Bearing United States Registration No. N[______] and
               Bearing Manufacturer's Serial No. [______] with two
                               [CFM MODEL 56-7B26]
                 [GE MODEL CF6-80C2B8F] [GE MODEL GE90] Engines
         Bearing Engine Manufacturer's Serial Nos. [______] and [______]

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

      THE RIGHT, TITLE AND INTEREST OF LESSOR IN AND TO, AMONG OTHER THINGS,
THIS LEASE AGREEMENT HAS BEEN ASSIGNED TO AND IS SUBJECT TO A SECURITY INTEREST
IN FAVOR OF WILMINGTON TRUST COMPANY, A DELAWARE BANKING CORPORATION, AS
MORTGAGEE, UNDER THE TRUST INDENTURE AND MORTGAGE [______], DATED AS OF
[_______________], FOR THE BENEFIT OF THE HOLDERS OF THE EQUIPMENT NOTES
REFERRED TO IN SUCH TRUST INDENTURE, ALL TO THE EXTENT PROVIDED IN SUCH TRUST
INDENTURE. THIS LEASE AGREEMENT HAS BEEN EXECUTED IN MULTIPLE COUNTERPARTS; TO
THE EXTENT, IF ANY, THAT THIS LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS
DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN LESSOR'S RIGHT, TITLE AND INTEREST IN AND
TO THIS LEASE AGREEMENT MAY BE PERFECTED THROUGH THE DELIVERY OR POSSESSION OF
ANY COUNTERPART OF THIS LEASE AGREEMENT OTHER THAN THE COUNTERPART OF THIS LEASE
AGREEMENT THAT CONTAINS THE ORIGINAL RECEIPT EXECUTED BY WILMINGTON TRUST
COMPANY, AS MORTGAGEE.

<PAGE>

<TABLE>
<CAPTION>
                                    CONTENTS

<S>                   <C>                                                                               <C>
SECTION 1.            DEFINITIONS AND CONSTRUCTION.......................................................1

SECTION 2.            DELIVERY AND ACCEPTANCE............................................................1

         2.1          Delivery and Lease of Aircraft.....................................................1
         2.2          Acceptance by Lessee...............................................................2

SECTION 3.            TERM AND RENT......................................................................2

         3.1          Term...............................................................................2
         3.2          Rent...............................................................................2
         3.3          Payments...........................................................................6

SECTION 4.            DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR; SECTION 1110 MATTERS.....................6

         4.1          Disclaimer.........................................................................7
         4.2          Certain Agreements of Lessor.......................................................7
         4.3          Quiet Enjoyment....................................................................7
         4.4          Investment of Funds Held as Security...............................................8
         4.5          Title Transfers by Lessor..........................................................9
         4.6          Lessor's Interest in Certain Engines...............................................9
         4.7          Lease For U.S. Federal Income Tax Law Purposes; Section 1110 of Bankruptcy Code...10

SECTION 5.            RETURN OF AIRCRAFT................................................................10

         5.1          Compliance with Annex B...........................................................10
         5.2          Storage and Related Matters.......................................................10
         5.3          Return of Other Engines...........................................................11
         5.4          Fuel..............................................................................11

SECTION 6.            LIENS.............................................................................11

SECTION 7.            REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND RECORDS.......................12

         7.1          Registration and Operation........................................................12
         7.2          Possession........................................................................14
         7.3          Certain Limitations on Subleasing or Other Relinquishment of Possession...........18

<PAGE>

SECTION 8.            MAINTENANCE; REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS
                      AND ADDITIONS; OTHER LESSEE COVENANTS.............................................19

         8.1          Maintenance; Replacement and Pooling of Parts; Alterations,
                      Modifications and Additions.......................................................19
         8.2          Information, Certificates, Notices and Reports....................................19

SECTION 9.            VOLUNTARY TERMINATION UPON OBSOLESCENCE...........................................21

         9.1          Right of Termination..............................................................21
         9.2          Election by Lessor to Sell........................................................21
         9.3          Retention of Aircraft by Lessor...................................................24

SECTION 10.           LOSS, DESTRUCTION, REQUISITION, ETC...............................................26

         10.1         Event of Loss With Respect to Aircraft............................................26
         10.2         Event of Loss With Respect to an Engine...........................................28
         10.3         Conditions to any Replacement.....................................................29
         10.4         Conveyance to Lessee..............................................................31
         10.5         Application of Payments...........................................................31
         10.6         Requisition of Aircraft for Use...................................................32
         10.7         Requisition of an Engine for Use..................................................33
         10.8         Application of Payments...........................................................33
         10.9         Application of Payments During Existence of a Lease Event of Default..............33

SECTION 11.           INSURANCE.........................................................................34

         11.1         Lessee's Obligation to Insure.....................................................34
         11.2         Insurance for Own Account.........................................................34
         11.3         Indemnification by Government in Lieu of Insurance................................34
         11.4         Application of Insurance Proceeds.................................................35
         11.5         Application of Payments During Existence of Lease Event of Default................35

SECTION 12.           INSPECTION........................................................................35

SECTION 13.           ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE.......................................36

         13.1         In General........................................................................36
         13.2         Merger of Lessee..................................................................36
         13.3         Assignment Security for Lessor's Obligations......................................37
         13.4         Successor Owner Trustee...........................................................38

<PAGE>

SECTION 14.           LEASE EVENTS OF DEFAULT...........................................................38

         14.1         Payments..........................................................................38
         14.2         Insurance.........................................................................39
         14.3         Other Covenants...................................................................39
         14.4         Representations and Warranties....................................................39
         14.5         Bankruptcy and Insolvency.........................................................40

SECTION 15.           REMEDIES AND WAIVERS..............................................................40

         15.1         Remedies..........................................................................40
         15.2         Limitations Under CRAF............................................................44
         15.3         Right to Perform for Lessee.......................................................44
         15.4         Determination of Fair Market Rental Value and Fair Market Sales Value.............45
         15.5         Remedies Cumulative...............................................................45

SECTION 16.           LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC................................46

SECTION 17.           RENEWAL AND PURCHASE OPTIONS......................................................46

         17.1         Notices Generally.................................................................46
         17.2         Renewal Options...................................................................47
         17.3         Purchase Option...................................................................49
         17.4         Appraisals........................................................................50

SECTION 18.           MISCELLANEOUS.....................................................................51

         18.1         Amendments........................................................................51
         18.2         Severability......................................................................51
         18.3         Third-Party Beneficiary...........................................................51
         18.4         Reproduction of Documents.........................................................52
         18.5         Counterparts......................................................................52
         18.6         Notices...........................................................................52
         18.7         GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..................................53
         18.8         No Waiver.........................................................................54
         18.9         Entire Agreement..................................................................54
</TABLE>

<PAGE>

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX A             Definitions
ANNEX B             Return Conditions
ANNEX C             Maintenance
ANNEX D             Insurance

EXHIBIT A           Form of Lease Supplement
EXHIBIT B           Form of Return Acceptance Supplement

SCHEDULE 1          Certain Terms
SCHEDULE 2          Basic Rent
SCHEDULE 3          Stipulated Loss Value Schedule
SCHEDULE 4          Termination Value Schedule
SCHEDULE 5          Permitted Countries
SCHEDULE 6          Placards

<PAGE>

                            LEASE AGREEMENT [______]

      LEASE AGREEMENT [______], dated as of [_______________] (this "Agreement"
or "Lease"), between (a) FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as expressly
provided herein, but solely as Owner Trustee (this and all other capitalized
terms used but not defined herein shall have the respective meanings ascribed
thereto in Section 1 below) ("Lessor" or "Owner Trustee"), and (b) CONTINENTAL
AIRLINES, INC., a Delaware corporation ("Lessee").

                                    RECITALS

      A. Lessor and Lessee are parties to the Participation Agreement, pursuant
to which, among other things, Lessor and Lessee have agreed to enter into this
Agreement.

      B. Pursuant to the Trust Agreement, Owner Participant has authorized
Lessor to enter into this Agreement.

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

SECTION 1.  DEFINITIONS AND CONSTRUCTION

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

SECTION 2.  DELIVERY AND ACCEPTANCE

      2.1   DELIVERY AND LEASE OF AIRCRAFT

      Lessor hereby agrees (subject to the satisfaction or waiver of the
conditions set forth in Section 5 of the Participation Agreement) to lease to
Lessee for the Term and Lessee hereby agrees (subject to the satisfaction or
waiver of the conditions set forth in Section 5 of the Participation Agreement)
to lease from Lessor for the Term, the Aircraft, commencing immediately upon
acquisition of the Aircraft by Lessor pursuant to the Purchase Agreement
Assignment.

<PAGE>

      2.2   ACCEPTANCE BY LESSEE

      (a) By executing and delivering Lease Supplement No. 1, Lessee confirms to
Lessor that Lessee has duly and irrevocably accepted delivery of the Aircraft
for all purposes of this Agreement.

      (b) Lessor has authorized one or more employees of Lessee, designated by
Lessee in writing, as the authorized representative or representatives of Lessor
to accept delivery of the Aircraft on behalf of Lessor pursuant to the Purchase
Agreement Assignment and the Participation Agreement. Lessee hereby agrees that
if delivery of the Aircraft shall be accepted by an employee or employees of
Lessee pursuant to such authorization by Lessor, such acceptance of delivery by
such employee or employees on behalf of Lessor shall, without further act,
irrevocably constitute acceptance by Lessee of the Aircraft for all purposes of
this Agreement.

SECTION 3.  TERM AND RENT

      3.1   TERM

      The Aircraft shall be leased hereunder for the Term, unless this Agreement
or the leasing of the Aircraft is earlier terminated in accordance with any
provision of this Agreement. Lessee shall have the option to renew the leasing
of the Aircraft hereunder pursuant to, and subject to the terms and conditions
of, Section 17, for the Renewal Lease Term.

      3.2   RENT

            3.2.1   INTERIM RENT; BASIC RENT; ADJUSTMENTS TO BASIC RENT AND
                    CERTAIN OTHER AMOUNTS

      (a) Lessee shall pay Interim Rent to Lessor on the last day of the Interim
Lease Term, which shall be allocated to the Interim Lease Term. During the Base
Lease Term, Lessee shall pay to Lessor, on each Payment Date, Basic Rent in the
amount equal to the percentage of Lessor's Cost specified in Schedule 2 for such
Payment Date, which shall be allocated to the Payment Period ending on such
Payment Date, if designated as a payment in arrears, or allocated to the Payment
Period commencing on such Payment Date, if designated as a payment in advance,
in each case as specified in Schedule 2, as such amount may be adjusted pursuant
to Section 3.2.1(b).

<PAGE>

      (b) Basic Rent, Stipulated Loss Values and Termination Values, shall be
subject to adjustment as follows:

            (i) In the event that Transaction Expenses paid by Lessor pursuant
      to Section 9.2 of the Participation Agreement are determined to be other
      than 1.0% of Lessor's Cost, then in each case the Basic Rent percentages
      set forth in Schedule 2, Stipulated Loss Value percentages set forth in
      Schedule 3 and the Termination Value percentages set forth in Schedule 4
      shall be recalculated (upwards or downwards) by the Owner Participant, on
      or prior to the 120th day after the Delivery Date using the same methods
      and assumptions used to calculate original Basic Rent, Stipulated Loss
      Value and Termination Value percentages in order to (1) maintain the Owner
      Participant's Net Economic Return and (2) minimize the Net Present Value
      of Rents to Lessee to the extent possible consistent with clause (1)
      hereof.

            (ii) In the event of a refinancing as contemplated by Section 11 of
      the Participation Agreement, then the Basic Rent percentages set forth in
      Schedule 2, Stipulated Loss Value percentages set forth in Schedule 3 and
      the Termination Value percentages set forth in Schedule 4 shall be
      recalculated (upwards and downwards) by the Owner Participant as
      contemplated by such Section to (1) maintain the Owner Participant's Net
      Economic Return and (2) to the extent possible consistent with clause (1)
      hereof, minimize the Net Present Value of Rents to Lessee.

            (iii) In the event that Lessee is required to indemnify the Owner
      Participant under the Tax Indemnity Agreement, then (A) in the event that
      the Lessee agrees to satisfy such indemnity obligation pursuant to Section
      __ of the Tax Indemnity Agreement, the Basic Rent percentages set forth in
      Schedule 2, and (B) in any event, the Stipulated Loss Value percentages
      set forth in Schedule 3 and the Termination Value percentages set forth in
      Schedule 4 shall be recalculated (upwards or downwards) by Owner
      Participant, using the same methods and assumptions (except to the extent
      such assumptions shall be varied to take into account the Tax Loss or
      Foreign Tax Credit Loss (as each such term is defined in the Tax Indemnity
      Agreement) that is the subject of such indemnification and any prior or
      contemporaneous Tax Loss or Foreign Tax Credit Loss) used to calculate the
      Basic Rent percentages, the Stipulated Loss Value percentages and the
      Termination Value percentages on the Delivery Date, in order to (1)

<PAGE>

      maintain the Owner Participant's Net Economic Return and (2) to the extent
      possible consistent with clause (1) hereof, minimize the Net Present Value
      of Rents to Lessee.

      (c) All adjustments pursuant to Section 3.2.1(b) shall be made as promptly
as practicable after either Owner Participant or Lessee gives notice to the
other that an event has occurred that requires an adjustment. Owner Participant
and Lessee shall give prompt notice to the other of any event requiring an
adjustment. Any recalculation of the percentages of Basic Rent, Stipulated Loss
Value and Termination Value shall be prepared by Owner Participant, subject to
verification at the request of Lessee in accordance with this Section 3.2.1(c),
on the basis of the same methodology and assumptions used by Owner Participant
in determining the percentages of Basic Rent, Stipulated Loss Value and
Termination Value as of the Delivery Date, except as such assumptions have been
modified to reflect the events giving rise to adjustments hereunder. Promptly
after an adjustment is made hereunder, Owner Participant shall deliver to Lessee
a description of such adjustment, setting forth in reasonable detail the
calculation thereof. All adjustments shall (i) be made so as to avoid
characterization of the Lease as a "disqualified leaseback or long-term
agreement" within the meaning of Section 467 of the Code unless such adjustments
are made in a manner that reflects the effect of such characterization and (ii)
be in compliance with the requirements of Sections 4.02(5), 4.07(l) and, on a
prospective basis, 4.08(1) of Revenue Procedure 75-28, except to the extent that
on the Delivery Date the Lease constituted a "disqualified leaseback or
long-term agreement" or was not in compliance with the regulations referred to
in clause (ii). All adjustments required pursuant to Section 3.2.1(b) shall be
set forth in a Lease Supplement or in an amendment to this Lease, and promptly
after execution thereof by Lessor and Lessee, Lessee shall give a copy thereof
to Mortgagee.

      (d) If Lessee believes that any calculations by Owner Participant pursuant
to Section 3.2.1(c) are in error, and if, after consultation, Lessee and Owner
Participant are unable to agree on an adjustment, then a nationally recognized
firm of accountants selected by Lessee and reasonably satisfactory to Owner
Participant shall verify such calculations. Owner Participant will make
available to such firm, but not, in any circumstances, to Lessee or any
representative of Lessee, the methodology and assumptions referred to in Section
3.2.1(c) and any modifications thereto made to reflect the events giving rise to
adjustments hereunder (subject to the execution by such firm of a

<PAGE>

confidentiality agreement, reasonably acceptable to Owner Participant,
prohibiting disclosure of such methodology and assumptions to any third party).
The determination by such firm of accountants shall be final. Lessee will pay
the reasonable costs and expenses of such further verification by such
accountants, provided that if it results in a decrease in Basic Rent which
decreases the remaining Net Present Value of Rents by ten or more basis points
from the remaining Net Present Value of Rents as recalculated by the Owner
Participant, then the Owner Participant will pay such costs and expenses.

      (e) Notwithstanding anything to the contrary in any Operative Agreement,
the amount of the payment of Basic Rent due and payable on each Payment Date
shall be at least sufficient to pay in full, as of such Payment Date (assuming
timely payment of the Equipment Notes prior to such Date), the aggregate
principal amount of scheduled installments due on the Equipment Notes
outstanding on such Payment Date, together with the accrued and unpaid interest
thereon, due on such Payment Date in respect of the Equipment Notes; provided,
however, that no installment of Basic Rent shall be increased to the extent such
increase would be based upon (i) any attachment or diversion of Basic Rent on
account of Lessor Liens, (ii) any modification of the payment terms of the
Equipment Notes, other than as required or permitted by any Operative Agreement
(including, without limitation, as permitted upon the occurrence of a Lease
Event of Default) or (iii) the acceleration of any Equipment Note or Equipment
Notes due solely to the occurrence of an Indenture Event of Default that does
not constitute a Lease Event of Default.

            3.2.2   SUPPLEMENTAL RENT

      Lessee shall pay to Lessor, or to whosoever shall be entitled thereto, any
and all Supplemental Rent when and as the same shall become due and owing.
Lessee will also pay to Lessor, or to whosoever shall be entitled thereto as
Supplemental Rent, to the extent permitted by applicable Law, interest at the
Payment Due Rate on any part of any amount of Rent (including, without
limitation, Supplemental Rent) not paid by 12:30 p.m., New York time, on the
date when due (so long as, in the case of any person not a party to the
Participation Agreement, Lessee had received timely notice of the account to
which such payment was required to be made), for the period from and including
the date on which the same was due to, but excluding, the date of payment in
full.

<PAGE>

      3.3   PAYMENTS

      (a) Payments of Rent by Lessee shall be paid by wire transfer of
immediately available Dollars, not later than 12:30 p.m., New York time, on the
date when due, to the account of Lessor specified in Schedule 1 to the
Participation Agreement or to such other account in the United States as
directed by Lessor to Lessee in writing at least 10 Business Days prior to the
date such payment of Rent is due or, in the case of any payment of Supplemental
Rent expressly payable to a person other than Lessor, to the person that shall
be entitled thereto to such account in the United States as such person may
specify from time to time to Lessee at least 10 Business Days prior to the date
such payment of Rent is due.

      (b) Except as otherwise expressly provided herein, whenever any payment of
Rent shall be due on a day that is not a Business Day, such payment shall be
made on the next day that is a Business Day, and, if such payment is made on
such next Business Day, no interest shall accrue on the amount of such payment
during such extension.

      (c) So long as Lessee has not received written notice from the Mortgagee
that the Lien of the Trust Indenture has been discharged, and notwithstanding
Section 3.3(a), Lessor hereby directs, and Lessee agrees, that all payments of
Rent and all other amounts payable by Lessee hereunder, other than Excluded
Payments, shall be paid directly to Mortgagee on behalf of Lessor by wire
transfer of immediately available Dollars to the account of Mortgagee specified
in Schedule 1 to the Participation Agreement, or to such other account in the
United States as Mortgagee may specify by written notice to Lessor and Lessee at
least 10 Business Days prior to the date such payment of Rent is due.

      (d) Excluded Payments shall be paid by wire transfer of immediately
available Dollars to the account of the person specified in the Participation
Agreement or, if not so specified, to such account in the United States as may
be specified by such person by written notice to Lessor and Lessee from time to
time at least 10 Business Days prior to the date such payment is required to be
made.

      (e) All computations of interest under this Agreement shall be made on the
basis of a year of 360 days comprised of twelve 30-day months.

<PAGE>

SECTION 4.  DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR; SECTION 1110 MATTERS

      4.1   DISCLAIMER

      LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT "AS-IS, WHERE-IS." LESSEE
ACKNOWLEDGES AND AGREES THAT AS BETWEEN LESSEE AND EACH OF LESSOR, MORTGAGEE AND
ANY PARTICIPANT (i) LESSEE HAS SELECTED THE AIRCRAFT AND MANUFACTURER THEREOF
AND (ii) NONE OF LESSOR, MORTGAGEE AND ANY PARTICIPANT MAKES, HAS MADE OR SHALL
BE DEEMED TO HAVE MADE, AND EACH WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED,
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO:

      (v)   THE AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, ANY IMPLIED
            WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY PARTICULAR
            PURPOSE OF THE AIRFRAME, ANY ENGINE OR ANY PART THEREOF;

      (w)   THE QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO THE
            AIRFRAME, ANY ENGINE OR ANY PART THEREOF;

      (x)   THE ABSENCE OF LATENT OR ANY OTHER DEFECT IN THE AIRFRAME, ANY
            ENGINE OR ANY PART THEREOF, WHETHER OR NOT DISCOVERABLE;

      (y)   THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
            COPYRIGHT OR THE LIKE; OR

      (z)   THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY
            OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
            WITH RESPECT TO THE AIRFRAME, ANY ENGINE OR ANY PART THEREOF.

      4.2   CERTAIN AGREEMENTS OF LESSOR

      Unless a Lease Event of Default shall have occurred and be continuing,
Lessor agrees to make available to Lessee such rights as Lessor may have under
any warranty with respect to the Aircraft made, or made available, by Airframe
Manufacturer or Engine Manufacturer or any of their respective subcontractors or
suppliers, as the case may be, pursuant to and in accordance with the terms of
the Purchase Agreement Assignment.

      4.3   QUIET ENJOYMENT

      So long as no Lease Event of Default shall have occurred and be
continuing, Lessor shall not interfere with Lessee's rights hereunder to

<PAGE>

continued possession, use and operation of, and quiet enjoyment of, the Aircraft
during the Term.

      4.4   INVESTMENT OF FUNDS HELD AS SECURITY

            4.4.1   INVESTMENT

      Any moneys required to be paid to or retained by Lessor that are required
to be paid to Lessee or applied as provided herein shall, until paid to Lessee
as provided herein or applied as provided herein, be invested by Lessor from
time to time as directed in writing by Lessee (or, if Lessee fails to so direct,
by or as directed by Lessor in its sole discretion) and at the expense and risk
of Lessee in Cash Equivalents so long as such Cash Equivalents specified by
Lessee or Lessor, as the case may be, can be acquired by Lessor using its best
efforts; provided, that so long as the Lien of the Trust Indenture shall not
have been discharged, such moneys shall be invested and held by Mortgagee, as
assignee of Lessor, in accordance with this Lease and upon discharge of such
Lien, Mortgagee shall pay any such money held by it to Lessor to be held and
invested in accordance with this Section.

            4.4.2   PAYMENT OF GAIN OR LOSS

      Any net gain (including interest received) realized as the result of
investments pursuant to Section 4.4.1 (net of any fees, commissions and other
reasonable expenses, if any, incurred in connection with such investment) shall
be held and applied in the same manner as the principal amount is to be held and
applied hereunder. Lessee will promptly pay to Lessor, on demand, the amount of
any loss realized as the result of any such investment (together with any fees,
commissions and other reasonable expenses, if any, incurred in connection with
such investment), such amount so paid to be held and applied by Lessor as
contemplated in Section 4.4.1 above.

            4.4.3   LIMITATION OF LIABILITY

      All investments under this Section 4.4 shall be at the expense and risk of
Lessee, and Lessor and Mortgagee shall not be liable for any loss resulting from
any investment made under this Section 4.4 other than by reason of its willful
misconduct or gross negligence. Any such investment may be sold (without regard
to its maturity) by Lessor without instructions whenever such sale is necessary
to make a distribution required by this Lease.

<PAGE>

      4.5   TITLE TRANSFERS BY LESSOR

      If Lessor shall be required to transfer title to the Aircraft, Airframe or
any Engine to Lessee or any other person pursuant to this Lease, then (a) Lessor
shall (1) transfer to Lessee or such other person, as the case may be, all of
Lessor's right, title and interest in and to the Aircraft, Airframe or such
Engine, as the case may be, free and clear of all Lessor Liens, (2) so long as
the Lien of the Trust Indenture has not been discharged, comply with the Trust
Indenture relating to the release of the Aircraft, Airframe or such Engine, (3)
assign to Lessee or such other person, as the case may be, if and to the extent
permitted under the Purchase Agreement, all warranties of Airframe Manufacturer
and Engine Manufacturer with respect to the Aircraft, Airframe or such Engine,
and (4) assign to Lessee or such other person, as the case may be, if and to the
extent permitted, all claims, if any, for damage to the Aircraft, Airframe or
such Engine, in each case free of Lessor Liens, and without recourse or warranty
of any kind whatsoever (except as to the transfer described in clause (1) above
and as to the absence of such Lessor Liens, as aforesaid), and (b) Lessor shall
promptly deliver to Lessee or such other person, as the case may be, a bill of
sale and agreements of assignment, evidencing such transfer and assignment, and
such other instruments of transfer, all in form and substance reasonably
satisfactory to Lessee (or such other person, as the case may be), as Lessee (or
such other person, as the case may be) may reasonably request.

      4.6   LESSOR'S INTEREST IN CERTAIN ENGINES

      Lessor hereby agrees for the benefit of each lessor, conditional seller,
indenture trustee or secured party of any engine leased to, or purchased by,
Lessee or any Permitted Sublessee subject to a lease, conditional sale, trust
indenture or other security agreement that Lessor, its successors and assigns
will not acquire or claim, as against such lessor, conditional seller, indenture
trustee 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 owned by such lessor or conditional seller or subject to
a trust indenture or security interest in favor of such indenture trustee or
secured party.

<PAGE>

      4.7   LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES; SECTION 1110 OF
            BANKRUPTCY CODE

      (a) Lessee and Lessor agree that this Lease is, and shall be treated as, a
lease for U.S. federal income tax purposes of the Aircraft, Airframe, Engines
and Parts.

      (b) It is the intention of each of Lessee and Lessor that Lessor (and
Mortgagee as assignee of Lessor under the Trust Indenture) 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 this Lease.

SECTION 5.  RETURN OF AIRCRAFT

      5.1   COMPLIANCE WITH ANNEX B

      Lessee shall comply with each of the provisions of Annex B hereto, which
provisions are hereby incorporated by this reference as if set forth in full
herein.

      5.2   STORAGE AND RELATED MATTERS

      If Lessor gives written notice to Lessee not less than 60 days nor more
than 120 days prior to the end of the Term requesting storage of the Aircraft
upon its return hereunder, Lessee will provide Lessor, or cause Lessor to be
provided, with outdoor parking facilities for the Aircraft for a period up to 30
days, commencing on the date of such return, and upon request of Lessor to
Lessee made at least 10 days prior to the end of such initial 30 day period, for
an additional 30 day period commencing upon expiration of such initial period,
at such storage facility in the 48 contiguous states of the United States as
Lessee may select. Lessee shall, at Lessor's written request, maintain insurance
(if available) for the Aircraft during such storage period, PROVIDED that Lessor
shall reimburse Lessee for Lessee's out-of-pocket cost of providing such
insurance. Such storage shall be at Lessor's risk, and Lessor shall pay all
applicable storage fees, except that Lessee shall pay the parking fees for the
initial 30 day storage period; PROVIDED that Lessee's obligation to provide
parking shall be subject to Lessor entering into an agreement prior to the
commencement of the storage period with the storage facility providing, among
other things, that Lessor shall bear all maintenance charges and other costs
(other than parking fees for the initial 30 day period) incurred.

<PAGE>

      5.3   RETURN OF OTHER ENGINES

      In the event that any Engine owned by Lessor shall not be installed on the
Airframe at the time of return hereunder, Lessee shall be required to return the
Airframe hereunder with a Replacement Engine meeting the requirements of, and in
accordance with, Section 10 hereof and Annex B hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of the return of the Airframe.

      5.4   FUEL

      Upon the return of the Airframe upon any termination of this Lease, Lessor
shall pay Lessee, as compensation for any fuel or oil contained in the fuel or
oil tanks of such Airframe, the value of such fuel or oil at the price paid by
Lessee for such fuel or oil, PROVIDED that if the Aircraft is being returned in
connection with the exercise of remedies pursuant to Section 15, Lessor shall
have no obligation to make such payment to Lessee until Lessor shall have been
paid all amounts due to it pursuant to Section 15.

SECTION 6.  LIENS

      Lessee shall not, directly or indirectly, create, incur, assume or suffer
to exist any Lien on or with respect to the Aircraft, the Airframe, any Engine
or any Part, title to any of the foregoing or any interest of Lessee therein, or
the Lessee's rights in and to this Lease or any Permitted Sublease, except (a)
the respective rights of Lessor, Mortgagee, the Participants or Lessee under the
Operative Agreements, or of any Permitted Sublessee under any Permitted
Sublease; (b) Lessor Liens; (c) the rights of others under agreements or
arrangements to the extent permitted by the terms of Sections 7.2 and 7.3 or
Annex C; (d) Liens for Taxes of Lessee (and its U.S. federal tax law
consolidated group), or Liens for Taxes of any Tax Indemnitee (and its U.S.
federal tax law consolidated group) for which Lessee is obligated to indemnify
such Tax Indemnitee under any of the Lessee Operative Agreements, in any such
case either not yet due or being contested in good faith by appropriate
proceedings so long as such Liens and such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Aircraft, the Airframe, any
Engine or the interest of any Participant therein or impair the lien of the
Trust Indenture; (e) materialmen's, mechanics', workers', repairers', employees'
or other like Liens arising in the ordinary course of business for amounts the
payment of which is either not yet delinquent for more than 60 days or is being

<PAGE>

contested in good faith by appropriate proceedings, so long as such Liens and
such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Aircraft, the Airframe, any Engine or the interest of any
Participant therein or impair the lien of the Trust Indenture; (f) Liens arising
out of any judgment or award against Lessee (or against any Permitted
Sublessee), so long as such judgment shall, within 60 days after the entry
thereof, have been discharged or vacated, or execution thereof stayed pending
appeal or shall have been discharged, vacated or reversed within 60 days after
the expiration of such stay, and so long as during any such 60-day period there
is not, or any such judgment or award does not involve, any material risk of the
sale, forfeiture or loss of the Aircraft, the Airframe, any Engine or the
interest of any Participant therein or impair the lien of the Trust Indenture,
and (g) any other Lien with respect to which Lessee (or any Permitted Sublessee)
shall have provided a bond, cash collateral or other security adequate in the
reasonable opinion of Lessor. Lessee shall promptly take (or cause to be taken)
such action as may be necessary duly to discharge (by bonding or otherwise) any
Lien not excepted above if the same shall at any time arise in respect of the
Aircraft, the Airframe, any Engine or any Part during the Term.

SECTION 7.  REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND RECORDS

      7.1   REGISTRATION AND OPERATION

            7.1.1   REGISTRATION AND RECORDATION

      Subject to the compliance by Lessor and Owner Participant with their
respective obligations under Section 13 of the Participation Agreement, Lessee
shall cause the Aircraft to be, and at all times during the Term to remain, duly
registered with the FAA under the Act or with such other country of registry as
shall be permitted under Section 7.1.2 below, in the name of Lessor as owner and
lessor (except to the extent that such registration under the Act cannot be
effected with the FAA because of Lessor's or Owner Participant's failure to
comply with the citizenship requirements for registration of the Aircraft under
the Act). Lessor shall execute and deliver all such documents as Lessee (or any
Permitted Sublessee) may reasonably request for the purpose of effecting and
continuing such registration. Unless Mortgagee has given Lessee notice that the
Trust Indenture has been discharged, Lessee shall also cause the Trust Indenture
to be duly recorded and at all times maintained of record as a first-priority

<PAGE>

perfected mortgage (subject to Permitted Liens) on the Aircraft, the Airframe
and each of the Engines (except to the extent such perfection or priority cannot
be maintained solely as a result of the failure by Lessor or Mortgagee to
execute and deliver any necessary documents).

            7.1.2   REREGISTRATION

      So long as no Lease Event of Default shall have occurred and be
continuing, Lessee may, by written notice to Lessor, request to change the
country of registration of the Aircraft. Any such change in registration shall
be effected only in compliance with, and subject to all of the conditions set
forth in, Section 7.6.11 of the Participation Agreement.

            7.1.3   MARKINGS

      If permitted by applicable Law, on or reasonably promptly after the
Delivery Date, Lessee will cause to be affixed to, and maintained in, the
cockpit of the Airframe and on each Engine, in each case, in a clearly visible
location (it being understood that the location of such placards, as identified
to the Owner Participant prior to the Delivery Date, shall be deemed to be in
compliance with this requirement), a placard of a reasonable size and shape
bearing the legend, in English, set forth in Schedule 6. Such placards may be
removed temporarily, if necessary, in the course of maintenance of the Airframe
or Engines. If any such placard is damaged or becomes illegible, Lessee shall
promptly replace it with a placard complying with the requirements of this
Section 7.1.3.

            7.1.4   COMPLIANCE WITH LAWS

      Lessee shall not, and shall not allow any other person to, operate, use,
maintain, service, repair or overhaul the Aircraft (a) in violation of any Law
binding on or applicable to the Aircraft, the Airframe or any Engine, or (b) in
violation of any airworthiness certificate, license or registration of any
Government Entity relating to the Aircraft, the Airframe or any Engine, except
(1) immaterial or non-recurring violations with respect to which corrective
measures are taken promptly by Lessee or a Permitted Sublessee, as the case may
be, upon discovery thereof, and (2) to the extent Lessee or any Permitted
Sublessee is contesting the validity or application of any such Law or
requirement relating to any such certificate, license or registration in good
faith in any reasonable manner which does not involve any material risk of the
sale, forfeiture or loss of the Aircraft, the Airframe, any Engine or the
interest of any Participant therein, any material risk of criminal liability or

<PAGE>

of material civil penalty against Lessor, Mortgagee or any Participant or impair
the lien of the Trust Indenture.

            7.1.5   OPERATION

      Lessee agrees not to operate, use or locate the Aircraft, the Airframe or
any Engine, or allow the Aircraft, the Airframe or any Engine to be operated,
used or located (a) in any area excluded from coverage by any insurance required
by the terms of Section 11, except in the case of a requisition by the U.S.
Government where Lessee obtains an indemnity in lieu of such insurance from the
U.S. Government, or insurance from the U.S. Government, covering such area, in
accordance with Section 11.3 or (b) in any recognized area of hostilities unless
fully covered in accordance with Annex D by war-risk insurance as required by
the terms of Section 11 (including, without limitation, Section 11.3), unless in
any case referred to in this Section 7.1.5 the Aircraft is only temporarily
operated, used or located in such area as a result of an emergency, equipment
malfunction, navigational error, hijacking, weather condition or other similar
unforeseen circumstances, so long as Lessee diligently and in good faith
proceeds to remove the Aircraft from such area.

      7.2   POSSESSION

      Lessee will not, without the prior written consent of Lessor, sublease or
otherwise in any manner deliver, transfer or relinquish possession of the
Aircraft, the Airframe or any Engine or install any Engine, or permit any Engine
to be installed, on any airframe other than the Airframe; PROVIDED, HOWEVER,
subject to the provisions of Section 7.3, Lessee may, without such prior written
consent:

            7.2.1   INTERCHANGE AND POOLING

      Subject or permit any Permitted Sublessee to subject (i) the Airframe to
normal interchange agreements or (ii) any Engine to normal interchange
agreements or pooling agreements or arrangements, in each case customary in the
commercial airline industry and entered into by Lessee or such Permitted
Sublessee, as the case may be, in the ordinary course of business; PROVIDED,
HOWEVER, that if Lessor's title to any such Engine is divested under any such
agreement or arrangement, then such Engine shall be deemed to have suffered an
Event of Loss as of the date of such divestiture, with the effect that Lessee

<PAGE>

shall be required to replace such Engine with a Replacement Engine meeting the
requirements of, and in accordance with, Section 10.

            7.2.2   TESTING AND SERVICE

      Deliver or permit any Permitted Sublessee to deliver possession of the
Aircraft, Airframe, any Engine or any Part (i) to the manufacturer thereof or to
any third-party maintenance provider, for testing, service, repair, maintenance
or overhaul work on the Aircraft, Airframe, any Engine or any Part, or, to the
extent required or permitted by the terms of Annex C, for alterations or
modifications in or additions to the Aircraft, Airframe or any Engine or (ii) to
any Person for the purpose of transport to a Person referred to in the preceding
clause (i).

            7.2.3   TRANSFER TO U.S. GOVERNMENT

      Transfer or permit any Permitted Sublessee to transfer possession of the
Aircraft, Airframe or any Engine to the U.S. Government, in which event Lessee
shall promptly notify Lessor and Mortgagee in writing of any such transfer of
possession and, in the case of any transfer pursuant to CRAF, in such
notification shall identify by name, address and telephone numbers the
Contracting Office Representative or Representatives for the Military Airlift
Command of the United States Air Force to whom notices must be given and to whom
requests or claims must be made to the extent applicable under CRAF.

            7.2.4   INSTALLATION OF ENGINES ON OWNED AIRCRAFT

      Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, as the case may be, free
and clear of all Liens, except (a) Permitted Liens and those that do not apply
to the Engines and (b) the rights of third parties under normal interchange or
pooling agreements and arrangements of the type that would be permitted under
Section 7.2.1.

            7.2.5   INSTALLATION OF ENGINES ON OTHER AIRFRAMES

      Install or permit any Permitted Sublessee to install an Engine on an
airframe leased to Lessee or such Permitted Sublessee, or purchased by Lessee or
such Permitted Sublessee subject to a mortgage, security agreement, conditional
sale or other secured financing arrangement, but only if (a) such airframe is
free and clear of all Liens, except (i) the rights of the parties to such lease,
or any such secured financing arrangement, covering such airframe and (ii) Liens

<PAGE>

of the type permitted by clauses (a) and (b) of Section 7.2.4 and (b) Lessee or
Permitted Sublessee, as the case may be, shall have received from the lessor,
mortgagee, secured party or conditional seller, in respect of such airframe, a
written agreement (which may be a copy of the lease, mortgage, security
agreement, conditional sale or other agreement covering such airframe), whereby
such Person agrees that it will not acquire or claim any right, title or
interest in, or Lien on, such Engine by reason of such Engine being installed on
such airframe at any time while such Engine is subject to this Lease or is owned
by Lessor.

            7.2.6   INSTALLATIONS OF ENGINES ON FINANCED AIRCRAFT

      Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, leased to Lessee or such
Permitted Sublessee, or purchased by Lessee or such Permitted Sublessee subject
to a conditional sale or other security agreement under circumstances where
neither Section 7.2.4 or 7.2.5 is applicable; PROVIDED, HOWEVER, that any such
installation shall be deemed an Event of Loss with respect to such Engine, and
Lessee shall comply with Section 10.2 hereof in respect thereof.

            7.2.7   SUBLEASING

      With respect to the Aircraft, Airframe or any Engine, so long as no Lease
Event of Default shall have occurred and is continuing, enter into a sublease
with any Permitted Air Carrier, but only if:

      (a) Lessee shall provide written notice to Lessor and Mortgagee (such
notice in the event of a sublease to a U.S. Air Carrier to be given promptly
after entering into any such sublease or, in the case of a sublease to any other
Permitted Air Carrier, 10 days in advance of entering into such sublease);

      (b) At the time that Lessee enters into such sublease, such Permitted Air
Carrier shall not be subject to any bankruptcy, insolvency, liquidation,
reorganization, dissolution or similar proceeding, and shall not have
substantially all of its property in the possession of any liquidator, trustee,
receiver or similar person;

      (c) Any such sublease (i) shall not extend beyond the expiration of the
Base Lease Term or any Renewal Lease Term then in effect unless Lessee shall
have irrevocably committed to purchase the Aircraft, (ii) shall include

<PAGE>

provisions for the maintenance, operation, possession, inspection and insurance
of the Aircraft that are the same in all material respects as the applicable
provisions of this Lease and (iii) shall be expressly subject and subordinate to
all the terms of this Agreement and to the rights, powers and remedies of Lessor
hereunder, including, without limitation, Lessor's rights under Section 15 to
repossess the Aircraft, Airframe and Engines and to terminate such sublease upon
the occurrence of a Lease Event of Default;

      (d) In connection with a sublease to a Permitted Foreign Air Carrier, (1)
the United States maintains diplomatic relations with the country of domicile of
such Permitted Foreign Air Carrier (or, in the case of Taiwan, diplomatic
relations at least as good as those in effect on the Delivery Date) and (2)
Lessee shall have furnished Lessor and Mortgagee a favorable opinion of counsel,
reasonably satisfactory to Lessor, in the country of domicile of such Permitted
Foreign Air Carrier, that (i) the terms of such sublease are the legal, valid
and binding obligations of the parties thereto enforceable under the laws of
such jurisdiction, (ii) it is not necessary for Owner Participant, Lessor or
Mortgagee to register or qualify to do business in such jurisdiction, if not
already so registered or qualified, as a result, in whole or in part, of the
proposed sublease, (iii) Lessor's title to, and Mortgagee's Lien in respect of,
the Aircraft, Airframe and Engines will be recognized in such jurisdiction, (iv)
the Laws of such jurisdiction of domicile require fair compensation by the
government of such jurisdiction, payable in a currency freely convertible into
Dollars, for the loss of title to the Aircraft, Airframe or Engines in the event
of the requisition by such government of such title (unless Lessee shall provide
insurance in the amounts required with respect to hull insurance under Section
11 covering the requisition of title to the Aircraft, Airframe or Engines by the
government of such jurisdiction so long as the Aircraft, Airframe or Engines are
subject to such sublease) and (v) the agreement of such Permitted Air Carrier
that its rights under the sublease are subject and subordinate to all the terms
of this Lease is enforceable against such Permitted Air Carrier under applicable
law;

      (e) Lessee shall furnish to Lessor, Mortgagee and Owner Participant
evidence reasonably satisfactory to Lessor that the insurance required by
Section 11 remains in effect;

      (f) All necessary documents shall have been duly filed, registered or
recorded in such public offices as may be required fully to preserve the title

<PAGE>

of Lessor, and the first priority security interest (subject to Permitted Liens)
of Mortgagee, in the Aircraft, Airframe and Engines;

      (g) Lessee shall reimburse Lessor, Mortgagee and Owner Participant for all
of their reasonable out-of-pocket fees and expenses, including, without
limitation, reasonable fees and disbursements of counsel, incurred by Lessor,
Mortgagee and Owner Participant in connection with any such sublease; and

      (h) No such sublease shall be made to a Permitted Foreign Air Carrier
prior to the close of the Tax Attribute Period, unless Lessee prepays on a
lump-sum basis any liability due under the Tax Indemnity Agreement as a result
of such sublease based upon the assumption that such sublease were to continue
for the remainder of the term of such sublease.

      7.3   CERTAIN LIMITATIONS ON SUBLEASING OR OTHER RELINQUISHMENT OF
            POSSESSION

      Notwithstanding anything to the contrary in Section 7.2:

      (a) The rights of any person that receives possession of the Aircraft in
accordance with Section 7.2 shall be subject and subordinate to all the terms of
this Lease, and to Lessor's rights, powers and remedies hereunder, including,
without limitation (i) Lessor's right to repossess the Aircraft pursuant to
Section 15, (ii) Lessor's right to terminate and avoid such sublease, delivery,
transfer or relinquishment of possession upon the occurrence of a Lease Event of
Default and (iii) the right to require such person to forthwith deliver the
Aircraft, the Airframe and Engines subject to such transfer upon the occurrence
of a Lease Event of Default;

      (b) Lessee shall remain primarily liable hereunder for the performance of
all the terms of this Lease to the same extent as if such transfer had not
occurred, and no transfer of possession of the Aircraft, the Airframe, any
Engine or any Part shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder or under any Operative Agreement;

      (c) Lessee shall ensure that no sublease, delivery, transfer or
relinquishment permitted under Section 7.2 shall affect the United States
registration of the Aircraft, unless also made in accordance with the provisions
of Section 7.1.2;

      (d) Any event that constitutes or would, with the passage of time,
constitute an Event of Loss under paragraph (c), (d), or (e) of the definition

<PAGE>

of such term (as set forth in Annex A) shall not be deemed to violate the
provisions of Section 7.2; and

      (e) Any Wet Lease shall not constitute a delivery, transfer or
relinquishment of possession for purposes of Section 7.2 and shall not be
prohibited by the terms hereof.

SECTION 8.  MAINTENANCE; REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
            MODIFICATIONS AND ADDITIONS; OTHER LESSEE COVENANTS

      8.1   MAINTENANCE; REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
            MODIFICATIONS AND ADDITIONS

      At all times during the Term, Lessee shall comply with, or cause to be
complied with, each of the provisions of Annex C, which provisions are hereby
incorporated by this reference as if set forth in full herein.

      8.2   INFORMATION, CERTIFICATES, NOTICES AND REPORTS

            8.2.1   FINANCIAL INFORMATION

      Lessee will furnish to Lessor:

      (a)   Within 90 days after the end of each of the first three fiscal
            quarters in each fiscal year of Lessee, a consolidated balance sheet
            of Lessee as of the end of such quarter and related statements of
            income and cash flows for the period commencing at the end of the
            previous fiscal year and ending with the end of such quarter,
            setting forth in each case in comparative form the corresponding
            figures for the corresponding period in the preceding fiscal year,
            prepared in accordance with GAAP; PROVIDED THAT so long as Lessee is
            subject to the reporting -------- ---- requirements of the
            Securities Exchange Act of 1934, a copy of Lessee's report on Form
            10-Q for such fiscal quarter (excluding exhibits) or an e-mail
            notice that such report has been filed with the SEC and providing a
            website address at which such report may be accessed will satisfy
            this paragraph (a).

      (b)   Within 120 days after the end of each fiscal year of Lessee, a
            consolidated balance sheet of Lessee as of the end of such fiscal
            year and related statements of income and cash flows of Lessee for
            such fiscal year, in comparative form with the preceding fiscal

<PAGE>

            year, prepared in accordance with GAAP, together with a report of
            Lessee's independent certified public accountants with respect to
            their audit of such financial statements; PROVIDED THAT so long as
            Lessee is subject to the reporting requirements of the Securities
            Exchange Act of 1934, a copy of Lessee's report on Form 10-K for
            such fiscal year (excluding exhibits) or an e-mail notice that such
            report has been filed with the SEC and providing a website address
            at which such report may be accessed will satisfy this paragraph
            (b).

            8.2.2   ANNUAL CERTIFICATE

      Within 120 days after the close of each fiscal year of Lessee, Lessee
shall deliver to Lessor and Mortgagee an Officer's Certificate of Lessee (which,
in lieu of delivery pursuant to Section 18.6, may be delivered by e-mail and, in
such case, need not include a manual signature of a required officer but instead
shall set forth a typed signature of such an officer) to the effect that such
officer is familiar with or has reviewed or caused to be reviewed the relevant
terms of this Lease and the other Lessee Operative Agreements and that such
officer does not have knowledge of the existence as at the date of such
certificate of any Lease Event of Default or, if any such Lease Event of Default
exists, specifying the nature and period of existence thereof and the action
Lessee has taken or is taking or proposes to take with respect thereto.

            8.2.3   INFORMATION FOR FILINGS

      Lessee shall promptly furnish to Owner Participant or Lessor such
information (other than with respect to the citizenship of Owner Participant and
Lessor) within Lessee's or any Permitted Sublessee's possession, or reasonably
available to or obtainable by Lessee or such Permitted Sublessee, as may be
required to enable Lessor timely to file any reports required to be filed by it
as lessor under the Lease or to enable Owner Participant to timely file any
reports required to be filed by it, as the beneficiary of the Trust Estate, in
either case, with any Government Entity because of, or in connection with, the
interest of Owner Participant or Lessor in the Aircraft, Airframe or Engines,
this Lease or any other part of the Trust Estate; provided, however, that with
respect to any such information which Lessee reasonably deems commercially
sensitive or confidential, Owner Participant or Lessor, as the case may be,
shall afford Lessee a reasonable opportunity to seek from any such Government
Entity a waiver of the obligation of Owner Participant or Lessor to file any

<PAGE>

such information, or shall consent to the filing of such information directly by
Lessee in lieu of filing by Owner Participant or Lessor, and if any such waiver
or consent is evidenced to the reasonable satisfaction of Owner Participant or
Lessor, as the case may be, then Lessee shall not be required to furnish such
information to Owner Participant or Lessor.

SECTION 9.  VOLUNTARY TERMINATION UPON OBSOLESCENCE

      9.1   RIGHT OF TERMINATION

      (a) Lessee shall have the right at its option to terminate this Lease
during the Base Lease Term, effective only on a Termination Date occurring on or
after the fifth anniversary of the Delivery Date, if:

            (i) Lessee makes a good faith determination that the Aircraft either
      has become economically obsolete or is surplus to Lessee's requirements
      and the Chief Financial Officer or Treasurer of Lessee so certifies in
      writing to Lessor; and

            (ii) written notice of Lessee's exercise of its option to terminate
      this Agreement shall be given to Lessor not less than 90 days prior to the
      proposed Termination Date specified in such notice.

      (b) Lessor shall notify Lessee and Mortgagee of Lessor's intention to sell
or retain the Aircraft, as provided in this Section 9, within 30 days after
Lessee gives Lessor written notice pursuant to Section 9.1(a)(ii). Any failure
by Lessor to give such notice of its election shall be deemed to be an election
to sell the Aircraft, as provided in this Section 9.

      (c) Any termination pursuant to this Section 9 shall become effective on
the date of the sale, if any, pursuant to Section 9.2 or upon the date of
termination and payment by Lessee and Lessor in accordance with Section 9.3 if
Lessor elects to retain the Aircraft.

      9.2   ELECTION BY LESSOR TO SELL

            9.2.1   BIDS; CLOSING OF SALE

      Unless Lessor has given Lessee notice of Lessor's election to retain the
Aircraft, Lessee, as agent for Lessor, shall, until the date ten Business Days
prior to the proposed Termination Date, use commercially reasonable efforts to

<PAGE>

obtain bids for a cash purchase of the Aircraft and Lessor may, if it desires to
do so, also seek to obtain such bids. In the event Lessee receives any bid,
Lessee shall promptly, and in any event at least ten Business Days prior to the
proposed date of sale, certify to Lessor in writing the amount and terms of such
bid, the proposed date of such sale and the name and address of the person (who
shall not be Lessee or any Affiliate of Lessee or any person with whom Lessee or
any such Affiliate has an arrangement for the future use of the Aircraft by
Lessee or any such Affiliate) submitting such bid. In the event Lessor receives
any bid on or prior to the date ten Business Days prior to the proposed
Termination Date, Lessor shall, at least ten Business Days prior to the proposed
date of sale, certify to Lessee in writing the amount and terms of such bid, the
proposed date of such sale and the name and address of the person submitting
such bid.

            9.2.2   CLOSING OF SALE

      (a) On the proposed Termination Date (i) Lessee shall deliver the Airframe
and Engines or engines constituting part of the Aircraft to the bidder, if any,
which shall have submitted the highest cash bid (net of applicable brokerage
commissions) on or before the date ten Business Days prior to such Termination
Date, in the same manner as if delivery were made to Lessor pursuant to Section
5 and Annex B and in full compliance with the terms thereof, and shall duly
transfer to Lessor title to any such engines not owned by Lessor, all in
accordance with the terms of Section 5 and Annex B, and (ii) Lessor shall
simultaneously therewith transfer the Airframe and Engines or engines to such
bidder, in the manner described in Section 4.5, against cash paid to Lessor in
the amount of such highest bid (net of applicable brokerage commissions and all
reasonable out-of-pocket fees and expenses incurred by Lessor, Mortgagee and
Owner Participant in connection with such sale and the related termination of
this Lease (collectively, the "Expenses of Sale")) and in the manner and in
funds of the type specified in Section 3.3.

      (b) All proceeds of any sale described in Section 9.2.2(a) (net of the
Expenses of Sale) shall be paid to and retained by Lessor and, on such
Termination Date, and as a condition precedent to such sale and the delivery of
the Aircraft and Engines or engines to such bidder, Lessee shall pay to Lessor,
in the manner and in funds of the type specified in Section 3.3:

<PAGE>

            (i) all unpaid Basic Rent due at any time prior to such Termination
      Date and all Basic Rent due on such Termination Date to the extent payable
      in arrears with respect to the Payment Period then ended; plus

            (ii) an amount equal to the excess, if any, of the Termination Value
      for the Aircraft, computed as of such Termination Date, over the proceeds
      of such sale (net of the Expenses of Sale); plus

            (iii) as provided in Section 3.2.2, interest on the amounts
      specified in the foregoing clause (i) at the Payment Due Rate from and
      including the date on which any such amount was due to the date of payment
      of such amount in full.

      As a further condition precedent to such sale and delivery, Lessee shall
pay all Supplemental Rent due by Lessee to Lessor, Mortgagee or the Participants
under this Lease (including, without limitation, (A) Supplemental Rent in
respect of Make-Whole Amount, if any, payable pursuant to Section 2.10(b) of the
Trust Indenture in connection with a prepayment of the Equipment Notes upon such
sale, (B) all interest charges provided for hereunder or under any other Lessee
Operative Agreement with respect to the late payment of any amounts so payable,
and (C) the Expenses of Sale).

      (c) Upon and subject to any such sale and receipt of proceeds by Lessor,
and full and final payment of all amounts described in Section 9.2.2(b), and
compliance by Lessee with all the other provisions of this Section 9.2,

            (i) Lessor will transfer to Lessee, in accordance with Section 4.5,
      any Engines constituting part of the Aircraft but which were not then
      installed on the Airframe and sold therewith; and

            (ii) the obligation of Lessee to pay Basic Rent, on or after the
      Payment Date with reference to which Termination Value is computed, shall
      cease, and the Term for the Aircraft shall end effective as of the date of
      such sale.

      (d) A sale of the Aircraft pursuant to this Section 9.2.2 shall take place
only on a Termination Date. Subject to Section 9.3, if no sale shall have
occurred on or as of the proposed Termination Date, this Agreement shall
continue in full force and effect, and all of Lessee's obligations shall
continue, including, without limitation, its obligation to pay Rent, in each

<PAGE>

case, as if the notice under Section 9.1 shall not have been given and, subject
to Section 9.2.3(b), Lessee may give another notice pursuant to Section 9.1.

            9.2.3   WITHDRAWAL OF NOTICE OF TERMINATION

      (a) Lessee may withdraw any notice given pursuant to Section 9.1 at any
time on or before the date ten Business Days prior to the proposed Termination
Date, whereupon this Agreement shall continue in full force and effect and all
of Lessee's obligations shall continue, including, without limitation, its
obligation to pay Rent, in each case, as if the notice under Section 9.1 shall
not have been given and Lessee may give another notice pursuant to Section 9.1;
PROVIDED that Lessee shall not be entitled to give more than five notices
pursuant to Section 9.1.

      (b) Lessee shall pay all reasonable out-of-pocket fees and expenses of
Lessor, Mortgagee and Owner Participant in connection with any notice of
termination withdrawn by Lessee or in connection with any notice of termination
pursuant to which a sale of the Aircraft fails to occur.

      9.3   RETENTION OF AIRCRAFT BY LESSOR

      (a) If Lessor shall elect to retain the Aircraft in accordance with
Section 9.1, on the proposed Termination Date:

            (i) Lessor shall pay, or cause to be paid, in the manner and in
      funds of the type specified in Section 3.3, to the Mortgagee an amount
      sufficient to prepay all outstanding Equipment Notes pursuant to Section
      2.10(b) of the Trust Indenture;

            (ii) subject to receipt by Mortgagee of the funds described in
      paragraph (i) above, Lessee shall deliver the Airframe and Engines or
      engines constituting part of the Aircraft to Lessor pursuant to Section 5
      and Annex B and in full compliance with the terms thereof, and shall duly
      transfer to Lessor title to any such engines not owned by Lessor, all in
      accordance with the terms of Section 5 and Annex B;

            (iii) Lessee shall pay to Lessor, in the manner and in funds of the
      type specified in Section 3.3:

<PAGE>

                  (1)   all unpaid Basic Rent due at any time prior to such
                        Termination Date and all Basic Rent due on such
                        Termination Date to the extent payable in arrears with
                        respect to the Payment Period then ended; plus

                  (2)   as provided in Section 3.2.2, interest on the amounts
                        specified in the foregoing clause (1) at the Payment Due
                        Rate from and including the date on which any such
                        amount was due to the date of payment of such amount in
                        full; and

            (iv) Lessee shall also pay all Supplemental Rent due and payable by
      Lessee to Lessor, Mortgagee or the other Participants under this Lease
      (other than any Supplemental Rent in respect of Make-Whole Amount, if any,
      payable pursuant to Section 2.10(b) of the Trust Indenture in connection
      with a prepayment of the Equipment Notes upon such sale), including
      without limitation all interest charges provided for hereunder or under
      any other Lessee Operative Agreement with respect to the late payment of
      any amounts, so payable, and the reasonable out-of-pocket fees and
      expenses incurred by Lessor, Mortgagee and Owner Participant in connection
      with such termination and sale.

      (b) Upon full and final payment to Lessor, Mortgagee and the Participants
of the amounts described in Section 9.3(a), and compliance by Lessee with all
the other applicable provisions of this Section 9.3,

            (i) Lessor will transfer to Lessee, in accordance with Section 4.5,
      any Engines constituting part of the Aircraft but which were not then
      installed on the Airframe and sold therewith; and

            (ii) The obligation of Lessee to pay Basic Rent otherwise due on or
      after the Termination Date shall cease, and the Term for the Aircraft
      shall end effective as of such Termination Date.

<PAGE>

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.

      10.1  EVENT OF LOSS WITH RESPECT TO AIRCRAFT

            10.1.1  NOTICE AND ELECTION

      (a) Upon the occurrence of an Event of Loss with respect to the Airframe,
and any Engine or Engines installed thereon at the time of such Event of Loss,
Lessee shall promptly (and in any event within 15 days after such occurrence)
give Lessor and Mortgagee written notice of such Event of Loss. Within 45 days
after such occurrence, Lessee shall give Lessor and Mortgagee written notice of
Lessee's election to make payment in respect of such Event of Loss, as provided
in Section 10.1.2, or to replace the Airframe, and any such Engines, as provided
in Section 10.1.3.

      (b) Any failure by Lessee to give such notice of its election shall be
deemed to be an election of the option set forth in Section 10.1.2. In addition,
Lessee shall not be entitled to elect the option set forth in Section 10.1.3 if,
at the time Lessor receives such notice from Lessee, there shall have occurred
and be continuing a Special Default or a Lease Event of Default.

      (c) For purposes of Section 10.1.2, an Event of Loss with respect to the
Airframe shall be deemed to constitute an Event of Loss with respect to the
Aircraft. For purposes of Section 10.1.3, any Engine not actually suffering an
Event of Loss shall not be required to be replaced.

            10.1.2  PAYMENT OF LOSS AND TERMINATION OF LEASE

      (a) If Lessee elects, in accordance with Section 10.1.1, to make payment
in respect of any such Event of Loss, then Lessee shall pay, in the manner and
in funds of the type specified in Section 3.3, the following amounts:

            (i) on or before the Business Day next following the earlier of (x)
      the 120th day following the date of the occurrence of such Event of Loss,
      and (y) the fourth Business Day following the receipt of insurance
      proceeds with respect to such occurrence (but in any event not earlier
      than the date of Lessee's election under Section 10.1.1 to make payment
      under this Section 10.1.2), Lessee shall pay to Lessor:

<PAGE>

            (1)   all unpaid Interim Rent, Basic Rent or Renewal Rent, as the
                  case may be, due at any time prior to the Stipulated Loss
                  Value Date that is on or immediately preceding the Loss
                  Payment Date; plus

            (2)   the Stipulated Loss Value of the Aircraft computed as of the
                  Stipulated Loss Value Date used in the foregoing clause (1)
                  for the computation of unpaid Rent; plus

            (3)   if the Stipulated Loss Value Date used in the foregoing clause
                  (1) is a Payment Date on which Basic Rent payable in arrears
                  is due, the amount of such Basic Rent; plus

            (4)   as provided in Section 3.2.2, interest on the amount specified
                  in the foregoing clause (1) at the Payment Due Rate from and
                  including the date on which any such amount was due to the
                  date of payment of such amount in full; plus

            (5)   interest on the amounts specified in the foregoing clauses (2)
                  and (3) at the SLV Rate from and including the Stipulated Loss
                  Value Date used in the foregoing clause (1) for the
                  computation of unpaid Rent to the date such amount is due, and
                  thereafter at the Payment Due Rate to the date of payment of
                  such amounts in full; and

            (ii) on or before the date required for payment of the amounts
      specified in paragraph (i) above, Lessee shall also pay to Lessor,
      Mortgagee and the other Participants all other amounts due and payable by
      Lessee to Lessor, Mortgagee and the other Participants under this Lease,
      the Participation Agreement or any other Lessee Operative Agreement.

      (b) Upon payment in full of all amounts described in the foregoing
paragraph (a),(i) the obligation of Lessee to pay Interim Rent, Basic Rent or
Renewal Rent hereunder with respect to the Aircraft shall terminate, (ii) the
Term for the Aircraft shall end and (iii) Lessor will transfer the Aircraft to
Lessee, as-is and where-is, and subject to any insurer's salvage rights, but
otherwise in the manner described in Section 4.5.

<PAGE>

            10.1.3  REPLACEMENT OF AIRFRAME AND ENGINES

      (a) If Lessee elects, in accordance with Section 10.1.1, to replace the
Airframe, and any Engines actually suffering the Event of Loss, then Lessee
shall, as promptly as possible and in any event within 120 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Airframe, and any such
Engine, title to a Replacement Airframe (which shall comply with paragraph (b)
below), and for each such Engine a Replacement Engine, in each case free and
clear of all Liens other than Permitted Liens. If Lessee makes such election,
but for any reason fails or is unable to effect such replacement within such
time period and in compliance with the requirements set forth in Section 10.3,
then Lessee shall be deemed to have initially made the election set forth in
Section 10.1.2 with the effect that Lessee shall immediately pay, in the manner
and in funds of the type specified in Section 3.3, the amounts required under,
and in accordance with, Section 10.1.2.

      (b) Any such Replacement Airframe shall be an airframe that is the same
model as the Airframe to be replaced thereby, or an improved model, and that has
a value, utility and remaining useful life (without regard to hours or cycles
remaining until the next regular maintenance check), at least equal to the
Airframe to be replaced thereby (assuming that such Airframe had been maintained
in accordance with the Lease). Any such Replacement Engine shall meet the
requirements of, and be conveyed by Lessee to Lessor in accordance with, Section
10.2 (other than the notice requirement set forth in Section 10.2.1).

      10.2  EVENT OF LOSS WITH RESPECT TO AN ENGINE

            10.2.1  NOTICE

      Upon the occurrence of an Event of Loss with respect to an Engine under
circumstances in which an Event of Loss with respect to the Airframe has not
occurred, Lessee shall promptly (and in any event within 15 days after such
occurrence) give Lessor written notice of such Event of Loss.

            10.2.2  REPLACEMENT OF ENGINE

      Lessee shall, promptly and in any event within 60 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Engine with respect to
which any Event of Loss occurred, title to a Replacement Engine free and clear

<PAGE>

of all Liens other than Permitted Liens. Such Replacement Engine shall be an
engine manufactured by Engine Manufacturer that is the same model as the Engine
to be replaced thereby, or an improved model, and that is suitable for
installation and use on the Airframe, and that has a value, utility and
remaining useful life (without regard to hours and cycles remaining until
overhaul) at least equal to the Engine to be replaced thereby (assuming that
such Engine had been maintained in accordance with the Lease).

            10.2.3  ENGINE EXCHANGE

         Upon not less than five (5) Business Days' prior written notice to
Lessor, Lessee may replace any Engine leased hereunder with another engine (the
"Exchanged Engine") meeting the requirements of Section 10.2.2. Such Exchanged
Engine shall be deemed to be a "Replacement Engine" and Lessor and Lessee shall
comply with the provisions of Section 10.3 with regard to the Exchanged Engine
and the Engine so replaced.

      10.3  CONDITIONS TO ANY REPLACEMENT

            10.3.1  DOCUMENTS

      Prior to or at the time of conveyance of title to any Replacement Airframe
or Replacement Engine to Lessor, Lessee shall take each of the following
actions:

      (a) furnish Lessor with a full warranty bill of sale duly conveying to
Lessor such Replacement Airframe or Replacement Engine, in form and substance
reasonably satisfactory to Lessor and cause such Replacement Airframe to be duly
registered in the name of Lessor pursuant to the Act;

      (b) cause (i) a Lease Supplement subjecting such Replacement Airframe or
Replacement Engine to this Lease, duly executed by Lessee, to be delivered to
Lessor for execution and, upon such execution, to be filed for recordation with
the FAA pursuant to the Act, (ii) a Trust Indenture Supplement, subjecting such
Replacement Airframe or Replacement Engine to the Trust Indenture, to be
delivered to Lessor for execution and, upon execution, to be filed for
recordation with the FAA pursuant to the Act and (iii) such Financing Statements
and other filings, as Lessor or Mortgagee may reasonably request, duly executed
by Lessee and, to the extent applicable, Lessor and Mortgagee (and Lessor and
Mortgagee shall execute and deliver the same), to be filed in such locations as
any such party may reasonably request;

<PAGE>

      (c) furnish such evidence of compliance with the insurance provisions of
Section 11 with respect to such Replacement Airframe or Replacement Engine as
Lessor may reasonably request;

      (d) furnish an opinion or opinions of Lessee's counsel (which may be
Lessee's legal department) reasonably satisfactory to Lessor and addressed to
Lessor and Mortgagee to the effect that (i) such full warranty bill of sale
referred to in Section 10.3.1(a) constitutes an effective instrument for the
conveyance of title to the Replacement Airframe or Replacement Engine and (ii)
in the case of a Replacement Airframe, Lessor and Mortgagee, as assignee of
Lessor, will be entitled to the benefits of Section 1110 with respect to the
Replacement Airframe, provided that such opinion referred to in this clause (ii)
need not be delivered to the extent that immediately prior to such replacement
the benefits of Section 1110 were not, solely by reason of a change in law or
court interpretation thereof, available to Lessor or Mortgagee, as assignee of
Lessor;

      (e) furnish an opinion of Lessee's aviation law counsel reasonably
satisfactory to Lessor and addressed to Lessor and Mortgagee as to the due
registration of any such Replacement Airframe and the due filing for recordation
of each Lease Supplement and Trust Indenture Supplement with respect to such
Replacement Airframe or Replacement Engine under the Act; and

      (f) with respect to the replacement of the Airframe, and any Engine
installed thereon at the time of the subject Event of Loss, if requested by
Lessor and at Lessor's expense, furnish a certified report of a qualified
independent aircraft appraiser, reasonably satisfactory to Lessor, certifying
that such Replacement Airframe and any such Replacement Engine complies with the
value, utility and remaining useful life requirements set forth in Section
10.1.3(b).

      Lessor and Lessee understand and agree that if at the time of any
replacement of the Airframe or any Engine, as contemplated in this Section 10,
the Airframe was registered in a jurisdiction other than the United States, then
the requirements set forth above in this Section 10.3.1 relating to compliance
with the requirements of the Act or the FAA, shall be deemed to refer to the
comparable applicable Law of, and the Aviation Authority of, such other
jurisdiction.

<PAGE>

            10.3.2  OTHER OBLIGATIONS

      (a) Lessor and Lessee agree that, upon any Replacement Airframe becoming
the Airframe hereunder, and upon any Replacement Engine becoming an Engine
hereunder, this Lease shall continue to be, and shall be treated as, a lease for
U.S. federal income tax purposes of, among other things, such Replacement
Airframe and such Replacement Engine. Without limiting the foregoing, Lessee and
Lessor intend that Lessor shall, in all events, be entitled to the benefits of
Section 1110 with respect to any Replacement Airframe or Replacement Engine and
Lessee and Lessor shall cooperate and take such action as the other may
reasonably request so as to ensure that Lessor shall be entitled to such
benefits.

      (b) No Event of Loss with respect to an Engine, or with respect to an
Airframe, shall result in, or otherwise allow or permit (other than as provided
in Section 10.1.2(b)), any reduction, deferral, discharge or other change in the
timing or amount of any Rent payable by Lessee hereunder, and (subject to such
Section 10.1.2(b)) Lessee shall pay all such Rent and other amounts as though
such Event of Loss had not occurred

      10.4  CONVEYANCE TO LESSEE

      Upon compliance by Lessee with the applicable terms of Sections 10.1.3,
10.2 and 10.3.1, Lessor will transfer to Lessee the Airframe or Engine, as the
case may be, with respect to which such Event of Loss occurred, in accordance
with Section 4.5.

      10.5  APPLICATION OF PAYMENTS

      Any amounts, other than insurance proceeds in respect of damage or loss
not constituting an Event of Loss (the application of which is provided for in
Section 11), received at any time by Lessor, Lessee or any Permitted Sublessee
from any Government Entity or any other Person in respect of any Event of Loss
will be applied as follows:

            10.5.1  REPLACEMENT OF AIRFRAME AND ENGINES

      If such amounts are received with respect to the Airframe, and any Engine
installed thereon at the time of such Event of Loss, upon compliance by Lessee
with the applicable terms of Section 10.1.3 with respect to the Event of Loss
for which such amounts are received, such amounts shall be paid over to, or
retained by, Lessee.

<PAGE>

            10.5.2  LOSS OF ENGINE

         If such amounts are received with respect to an Engine (other than an
Engine installed on the Airframe at the time such Airframe suffers an Event of
Loss), upon compliance by Lessee with the applicable terms of Section 10.2.2
with respect to the Event of Loss for which such amounts are received, such
amounts shall be paid over to, or retained by, Lessee.

            10.5.3  PAYMENT OF LOSS

      If such amounts are received, in whole or in part, with respect to the
Airframe, and Lessee makes, has made or is deemed to have made the election set
forth in Section 10.1.2, such amounts shall be applied as follows:

      (a) FIRST, if the sum described in Section 10.1.2 has not then been paid
in full by Lessee, such amounts shall be paid to Lessor (or to Mortgagee so long
as Mortgagee has not given notice to Lessee that the Lien of the Trust Indenture
has been duly discharged, except with respect to Excluded Payments) to the
extent necessary to pay in full such sum;

      (b) SECOND, the remainder, if any, shall be paid to Lessee.

      10.6  REQUISITION OF AIRCRAFT FOR USE

      If any Government Entity shall requisition for use the Airframe and the
Engines or engines installed thereon, and if the same does not constitute an
Event of Loss, Lessee shall promptly notify Lessor and Mortgagee of such
requisition and all of Lessee's obligations under this Agreement shall continue
to the same extent as if such requisition had not occurred; PROVIDED, HOWEVER,
that if the Airframe and Engines or engines installed thereon are not returned
to Lessor by Lessee at the end of the Term or within 30 days thereafter, and
Lessor, upon notice given not less than 30 days nor more than 120 days before
the end of the Term, shall have elected to treat such event as constituting an
Event of Loss with respect to the Aircraft, Lessee shall then be deemed to have
made the election set forth in Section 10.1.2 with the effect that Lessee shall
be obligated to pay the Stipulated Loss Value and all other amounts payable
pursuant to Section 10.1.2 with respect to the Aircraft as if an Event of Loss
had occurred as of the end of the Term. If Lessor shall not have elected to
treat such event as an Event of Loss, Lessee shall be obligated to return the
Airframe and Engines or engines to Lessor pursuant to, and in all other respects

<PAGE>

to comply with the provisions of, Section 5 promptly upon their return by such
Government Entity, and Lessee shall pay to Lessor upon such return an amount
equal to the average daily Basic Rent payable by Lessee during the Term for each
day after the end of the Term to but excluding the day of such return, up to a
maximum of 30 days.

      10.7  REQUISITION OF AN ENGINE FOR USE

      If any Government Entity shall requisition for use any Engine but not the
Airframe, Lessee will replace such Engine by complying with the applicable terms
of Sections 10.2 and 10.3 to the same extent as if an Event of Loss had occurred
with respect to such Engine, and any payments received by Lessor or Lessee from
such Government Entity with respect to such requisition shall be paid or
retained in accordance with Section 10.5.2.

      10.8  APPLICATION OF PAYMENTS

      All payments received by Lessor or Lessee, or any Permitted Sublessee,
from any Government Entity for the use of the Airframe and Engines or engines
installed thereon during the Term shall be paid over to, or retained by, Lessee
and all payments received by Lessor or Lessee from any Government Entity for the
use of the Airframe and Engines or engines installed thereon after the Term
shall be paid over to, or retained by, Lessor; provided that, if such
requisition constitutes an Event of Loss, or Lessor has elected under Section
10.6 to treat such requisition as an Event of Loss, then all such payments shall
be paid over to Lessor (or to Mortgagee so long as Mortgagee has not given
notice to Lessee that the Lien of the Trust Indenture has been duly discharged),
and held as provided in Section 10.5.

      10.9  APPLICATION OF PAYMENTS DURING EXISTENCE OF A LEASE EVENT OF DEFAULT

      Any amount described in this Section 10 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Special Default or Lease Event of Default shall have occurred and be continuing,
but shall instead be held by or paid over to Lessor (or to Mortgagee so long as
Mortgagee has not given notice to Lessee that the Trust Indenture has been duly
discharged) as security for the obligations of Lessee under this Lease and the
other Lessee Operative Agreements and shall be invested pursuant to Section 4.4
hereof unless and until Lessor shall have demanded liquidated damages pursuant
to Section 15.1.3 or 15.1.4 and such amount is applied, at the option of Lessor,

<PAGE>

or upon the written request of Lessee to Lessor, from time to time during the
continuance of a Lease Event of Default, to Lessee's obligations under this
Lease as and when due, it being understood that any such application shall be
made to such obligations of Lessee as Lessor may determine in its sole
discretion. At such time as there shall not be continuing any Special Default or
Lease Event of Default, such amount shall be paid to Lessee to the extent not
previously applied in accordance with this Section 10.9.

SECTION 11. INSURANCE

      11.1  LESSEE'S OBLIGATION TO INSURE

      Lessee shall comply with, or cause to be complied with, each of the
provisions of Annex D, which provisions are hereby incorporated by this
reference as if set forth in full herein.

      11.2  INSURANCE FOR OWN ACCOUNT

      Nothing in Section 11 shall limit or prohibit (a) Lessee from maintaining
the policies of insurance required under Annex D with higher limits than those
specified in Annex D, or (b) Lessor, Mortgagee or Owner Participant from
obtaining insurance for its own account (and any proceeds payable under such
separate insurance shall be payable as provided in the policy relating thereto);
PROVIDED, HOWEVER, that no insurance may be obtained or maintained that would
limit or otherwise adversely affect the coverage of any insurance required to be
obtained or maintained by Lessee pursuant to this Section 11 and Annex D.

      11.3  INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE

      Lessor agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft described in Annex D, indemnification from, or insurance
provided by, the U.S. Government, or upon the written consent of Lessor, other
Government Entity, against such risk in an amount that, when added to the amount
of insurance (including permitted self-insurance), if any, against such risk
that Lessee (or any Permitted Sublessee) may continue to maintain, in accordance
with this Section 11, during the period of such requisition or transfer, shall
be at least equal to the amount of insurance against such risk otherwise
required by this Section 11.

<PAGE>

      11.4  APPLICATION OF INSURANCE PROCEEDS

      As between Lessor and Lessee, all insurance proceeds received as a result
of the occurrence of an Event of Loss with respect to the Aircraft or any Engine
under policies required to be maintained by Lessee pursuant to this Section 11
will be applied in accordance with Section 10.5. All proceeds of insurance
required to be maintained by Lessee, in accordance with Section 11 and Section B
of Annex D, in respect of any property damage or loss not constituting an Event
of Loss with respect to the Aircraft, Airframe or any Engine will be applied in
payment (or to reimburse Lessee) for repairs or for replacement property, and
any balance remaining after such repairs or replacement with respect to such
damage or loss shall be paid over to, or retained by, Lessee.

      11.5  APPLICATION OF PAYMENTS DURING EXISTENCE OF LEASE EVENT OF DEFAULT

      Any amount described in this Section 11 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Special Default or Lease Event of Default shall have occurred and be continuing,
but shall instead be held by or paid over to Lessor (or to Mortgagee so long as
Mortgagee has not given notice to Lessee that the Lien of the Trust Indenture
has been duly discharged) as security for the obligations of Lessee under this
Lease and shall be invested pursuant to Section 4.4 hereof unless and until
Lessor shall have demanded liquidated damages pursuant to Section 15.1.3 or
15.1.4 and such amount is applied, at the option of Lessor, or upon the written
request of Lessee to Lessor, from time to time during the continuance of a Lease
Event of Default, to Lessee's obligations under this Lease and the other Lessee
Operative Agreements as and when due, it being understood that any such
application shall be made to such obligations of Lessee as Lessor may determine
in its sole discretion. At such time as there shall not be continuing any
Special Default or Lease Event of Default, such amount shall be paid to Lessee
to the extent not previously applied in accordance with this Section 11.5.

SECTION 12. INSPECTION

      (a) At all reasonable times Lessor, Mortgagee or the Owner Participant,
and their respective authorized representatives (the "Inspecting Parties") may
(not more than once every 12 months unless a Lease Event of Default has occurred

<PAGE>

and is continuing then such inspection right shall not be so limited) inspect
the Aircraft, Airframe and Engines (including, without limitation, the Aircraft
Documents) and any such Inspecting Party may make copies of such Aircraft
Documents not reasonably deemed confidential by Lessee or such Permitted
Sublessee.

      (b) Any inspection of the Aircraft hereunder shall be limited to a visual,
walk-around inspection and shall not include the opening of any panels, bays or
other components of the Aircraft, and no such inspection shall interfere with
Lessee's or any Permitted Sublessee's maintenance and operation of the Aircraft,
Airframe and Engines.

      (c) With respect to such rights of inspection, Lessor, Owner Participant
and Mortgagee shall not have any duty or liability to make, or any duty or
liability by reason of not making, any such visit, inspection or survey.

      (d) Each Inspecting Party shall bear its own expenses in connection with
any such inspection (including the cost of any copies made in accordance with
Section 12(a)).

SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE

      13.1  IN GENERAL

      This Lease and the other Lessee Operative Agreements shall be binding upon
and inure to the benefit of Lessor and Lessee and their respective successors
and permitted assigns. Except as otherwise expressly permitted by the terms of
the Lease or any other Lessee Operative Agreement, Lessee will not, without the
prior written consent of Lessor and Mortgagee, assign any of its rights under
this Lease. Except as otherwise provided herein (including, without limitation,
under the provisions of Section 15 hereof), Lessor and Mortgagee may not assign
or convey any of its right, title and interest in and to this Lease or the
Aircraft without the prior written consent of Lessee, such consent not to be
unreasonably withheld.

      13.2  MERGER OF LESSEE

            13.2.1  IN GENERAL

         Lessee shall not consolidate with or merge into any other person under
circumstances in which Lessee is not the surviving corporation, or convey,
transfer or lease in one or more transactions all or substantially all of its
assets to any other person, unless:

<PAGE>

      (a) such person is organized, existing and in good standing under the Laws
of the United States, any State of the United States or the District Columbia
and, upon consummation of such transaction, such person will be a U.S. Air
Carrier;

      (b) such person executes and delivers to Lessor and Mortgagee a duly
authorized, legal, valid, binding and enforceable agreement, reasonably
satisfactory in form and substance to Lessor, containing an effective assumption
by such person of the due and punctual performance and observance of each
covenant, agreement and condition in the Lessee Operative Agreements to be
performed or observed by Lessee;

      (c) such person makes such filings and recordings with the FAA pursuant to
the Act as shall be necessary to evidence such consolidation or merger; and

      (d) immediately after giving effect to such consolidation or merger no
Lease Event of Default shall have occurred and be continuing.

            13.2.2  EFFECT OF MERGER

      Upon any such consolidation or merger of Lessee with or into, or the
conveyance, transfer or lease by Lessee of all or substantially all of its
assets to, any Person in accordance with this Section 13.2, such Person will
succeed to, and be substituted for, and may exercise every right and power of,
Lessee under the Lessee Operative Agreements with the same effect as if such
person had been named as "Lessee" therein. No such consolidation or merger, or
conveyance, transfer or lease, shall have the effect of releasing Lessee or such
Person from any of the obligations, liabilities, covenants or undertakings of
Lessee under the Lease.

      13.3  ASSIGNMENT SECURITY FOR LESSOR'S OBLIGATIONS

      In order to secure the indebtedness evidenced by the Equipment Notes,
Lessor has agreed in the Trust Indenture, among other things, to assign to
Mortgagee this Lease and to mortgage the Aircraft, Airframe and Engines in favor
of Mortgagee, subject to the reservations and conditions therein set forth.
Lessee hereby accepts and consents to the assignment of all Lessor's right,
title and interest in and to this Lease pursuant to the terms of the Trust
Indenture. In accordance with Section 3.3(c), Lessee agrees to pay directly to
Mortgagee (or, after receipt by Lessee of notice from Mortgagee of the discharge
of the Lien of the Trust Indenture, to Lessor), all amounts of Rent (other than

<PAGE>

Excluded Payments) due or to become due hereunder and assigned to Mortgagee and
Lessee agrees that Mortgagee's right to such payments hereunder shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, the circumstances set forth in Section 16 hereof.
Notwithstanding the foregoing assignment of this Lease, the obligations of
Lessee to Lessor to perform the terms and conditions of this Lease shall remain
in full force and effect.

      13.4  SUCCESSOR OWNER TRUSTEE

      Lessee agrees that in the case of the appointment of any successor Owner
Trustee pursuant to the terms of the Participation Agreement and the Trust
Agreement, such successor Owner Trustee shall, upon written notice by such
successor Owner Trustee to Lessee, succeed to all the rights, powers and title
of Lessor hereunder and shall be deemed to be Lessor and the owner of the
Aircraft and the other assets of the Trust Estate for all purposes hereof
without the necessity of any consent or approval by Lessee and without in any
way altering the terms of this Lease or Lessee's obligations hereunder. An
appointment and designation of a successor Owner Trustee shall not exhaust the
right to appoint and designate further successor or additional Owner Trustees
pursuant to the Participation Agreement and the Trust Agreement, and such right
may be exercised repeatedly as long as this Lease shall be in effect.

SECTION 14. LEASE EVENTS OF DEFAULT

      The occurrence of any one or more of the following circumstances,
conditions, acts or events, for any reason whatsoever and whether any such
circumstance, condition, act or 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, order, rule or regulation of any Government Entity, shall
constitute a Lease Event of Default so long as it shall not have been remedied:

      14.1  PAYMENTS

      Lessee shall fail to pay any amount of Interim Rent, Basic Rent, Renewal
Rent, Stipulated Loss Value or Termination Value within ten (10) Business Days
after the same shall have become due; or Lessee shall fail to pay any
Supplemental Rent (other than Stipulated Loss Value or Termination Value) when
due and such failure shall continue for a period in excess of ten (10) Business
Days from and after the date of any written notice to Lessee from Lessor of the

<PAGE>

failure to make such payment when due; provided that any such failure to pay any
Excluded Payment shall not constitute a Lease Event of Default until written
notice is given by the Owner Participant to Lessee and Mortgagee that such
failure constitutes a Lease Event of Default and such failure shall have
continued for a period in excess of ten (10) Business Days after such notice.

      14.2  INSURANCE

      Lessee shall fail to carry and maintain, or cause to be carried and
maintained, insurance on and in respect of the Aircraft, Airframe and Engines in
accordance with the provisions of Section 11.

      14.3  OTHER COVENANTS

      Lessee shall fail to observe or perform (or cause to be observed and
performed) in any material respect any other covenant, agreement or obligation
set forth herein or in any other Lessee Operative Agreement (other than the
covenants, agreements and obligations set forth in the Tax Indemnity Agreement),
and such failure shall continue unremedied for a period of 30 days from and
after the date of written notice thereof to Lessee from Lessor or Mortgagee,
unless such failure is capable of being corrected and Lessee shall be diligently
proceeding to correct such failure, in which case there shall be no Lease Event
of Default unless and until such failure shall continue unremedied for a period
of 270 days after receipt of such notice.

      14.4  REPRESENTATIONS AND WARRANTIES

         Any representation or warranty made by Lessee herein, in the
Participation Agreement or in any other Lessee Operative Agreement (other than
the representations and warranties of Lessee in the Tax Indemnity Agreement) (a)
shall prove to have been untrue or inaccurate in any material respect as of the
date made, (b) such untrue or inaccurate representation or warranty is material
at the time in question, (c) and the same shall remain uncured (to the extent of
the adverse impact of such incorrectness on the interest of the Participants or
Lessor) for a period in excess of 30 days from and after the date of written
notice thereof from Lessor or Mortgagee to Lessee.

<PAGE>

      14.5  BANKRUPTCY AND INSOLVENCY

      (a) Lessee shall consent to the appointment of or the taking of possession
by a receiver, trustee or liquidator of itself or of substantially all of its
property, or Lessee shall admit in writing its inability to pay its debts
generally as they come due, or does not pay its debts generally as they become
due or shall make a general assignment for the benefit of creditors, or Lessee
shall file a voluntary petition in bankruptcy or a voluntary petition or an
answer seeking reorganization, liquidation or other relief in a case under any
bankruptcy Laws or other insolvency Laws (as in effect at such time), or Lessee
shall seek relief by voluntary petition, answer or consent, under the provisions
of any other bankruptcy or other similar Law providing for the reorganization or
winding-up of corporations (as in effect at such time) or Lessee's board of
directors shall adopt a resolution authorizing any of the foregoing; or

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

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

SECTION 15. REMEDIES AND WAIVERS

      15.1  REMEDIES

      If any Lease Event of Default shall occur and be continuing, Lessor may,
at its option and at any time and from time to time, exercise any one or more of
the following remedies as Lessor in its sole discretion shall elect:

<PAGE>

            15.1.1  RETURN AND REPOSSESSION

      Lessor may cause Lessee, upon giving written notice to Lessee, to return
promptly, and Lessee shall return promptly, the Airframe and Engines as Lessor
may so demand, to Lessor or its order in the manner and condition required by,
and otherwise in accordance with, all the provisions of Section 5 as if the
Airframe or Engine were being returned at the end of the Base Lease Term or any
Renewal Lease Term or Lessor, at its option, may enter upon the premises where
the Airframe or any Engine, or any Part thereof, are located and take immediate
possession of and remove the same by summary proceedings or otherwise, all
without liability accruing to Lessor for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by such
taking or otherwise.

            15.1.2  SALE AND USE

      Lessor may sell the Airframe and/or any Engine at public or private sale,
at such times and places, and to such Persons (including Lessor, Mortgagee or
any Participant), as Lessor may determine; or Lessor may otherwise dispose of,
hold, use, operate, lease to others or keep idle the Airframe and/or any Engine,
as Lessor, in its sole discretion, may determine, all free and clear of any
rights of Lessee and without any duty to account to Lessee with respect to such
action or inaction or for any proceeds with respect thereto, except as
hereinafter set forth in this Section 15, and except to the extent that such
proceeds would constitute, under applicable Law, a mitigation of Lessor's
damages suffered or incurred as a result of the subject Lease Event of Default.
Lessor shall give Lessee at least 15 days prior written notice of the date fixed
for any public sale of the Airframe and/or any Engine or of the date on or after
which will occur the execution of any contract providing for any private sale.

            15.1.3  CERTAIN LIQUIDATED DAMAGES

      Whether or not Lessor shall have exercised, or shall thereafter at any
time exercise, any of its rights under Section 15.1.1 or 15.1.2 with respect to
the Airframe and/or any Engine, or any Part thereof, Lessor, by written notice
to Lessee specifying a payment date (which shall be the Stipulated Loss Value
Date next occurring not less than 10 days after the date of such notice), may
demand Lessee to pay to Lessor, and Lessee shall pay to Lessor, on the payment
date so specified and in the manner and in funds of the type specified in
Section 3.3, as liquidated damages for loss of a bargain and not as a penalty

<PAGE>

(in lieu of the Interim Rent, Basic Rent or Renewal Rent, as the case may be,
for the Aircraft in respect of all periods commencing on or after the date
specified for payment in such notice), the following amounts:

      (a) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case may
be, due at any time prior to the Stipulated Loss Value Date specified in such
notice; plus

      (b) whichever of the following amounts Lessor, in its sole discretion
shall specify in such notice:

            (i) an amount equal to the excess, if any, of the present value,
      computed as of the Stipulated Loss Value Date specified in such notice,
      discounted to such date at a rate per annum equal to the Debt Rate,
      compounded semiannually, of all unpaid Interim Rent and Basic Rent during
      the then remaining portion of the Base Lease Term or, if a Renewal Lease
      Term has commenced, of all unpaid Renewal Rent during the remaining
      portion of such Renewal Lease Term, over the Fair Market Rental Value of
      the Aircraft for the remainder of the Term, after discounting such Fair
      Market Rental Value to its then present value (at a rate per annum equal
      to the Debt Rate, compounded semiannually) as of the Stipulated Loss Value
      Date specified in such notice, or

            (ii) an amount equal to the excess, if any, of the Stipulated Loss
      Value for the Aircraft, computed as of the Stipulated Loss Value Date
      specified in such notice, over the Fair Market Sales Value of the
      Aircraft, as of the Stipulated Loss Value Date specified in such notice;
      plus

      (c) interest on the amounts specified in the foregoing clause (a) at the
Payment Due Rate from and including the date on which any such amount was due to
the date of payment of such amount; plus

      (d) interest on the amount specified in the foregoing clause (b)(i) or
(b)(ii), according to Lessor's election, at the Payment Due Rate from and
including the Stipulated Loss Value Date specified in such notice to the date of
payment of such amount.

            15.1.4  LIQUIDATED DAMAGES UPON SALE

      If Lessor, pursuant to Section 15.1.2 or applicable Law, shall have sold
the Airframe and/or any Engine, Lessor, in lieu of exercising its rights under

<PAGE>

Section 15.1.3 with respect to the Aircraft, Airframe or any Engine, as the case
may be, may, if Lessor shall so elect, upon giving written notice to Lessee,
demand Lessee to pay Lessor, and Lessee shall pay to Lessor, on the date of such
sale and in the manner and in funds of the type specified in Section 3.3, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Interim Rent, Basic Rent or Renewal Rent, as the case may be, for the Aircraft
in respect of all periods commencing on or after the date of such sale), the
following amounts:

      (a)   all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case may
            be, due at any time prior to the Stipulated Loss Value Date on or
            immediately preceding the date of such sale; plus

      (b)   an amount equal to the excess, if any, of (i) the Stipulated Loss
            Value of the Aircraft, computed as of the Stipulated Loss Value Date
            used in the foregoing clause (a) for the computation of unpaid Rent,
            over (ii) the proceeds of such sale, minus all reasonable costs of
            Lessor and Mortgagee in connection with the sale; plus

      (c)   if the date of such sale is not a Stipulated Loss Value Date, an
            amount equal to interest on the outstanding principal amount of the
            Equipment Notes at the rate per annum borne thereby from and
            including the Stipulated Loss Value Date used in the foregoing
            clause (a) for the computation of unpaid Rent to the date of such
            sale; plus

      (d)   interest on the amounts specified in the foregoing clause (a) at the
            Payment Due Rate from and including the date on which any such
            amount was due to the date of payment of such amount; plus

      (e)   interest on the sum of the amounts specified in the foregoing clause
            (b) at the Payment Due Rate from and including the date of such sale
            to the date of payment of such amounts.

            15.1.5  RESCISSION

      Lessor may (i) at its option, rescind or terminate this Lease as to the
Aircraft, Airframe or any Engine, or any Part thereof, or (ii) exercise any

<PAGE>

other right or remedy that may be available to it under applicable Law or
proceed by appropriate court action to enforce the terms hereof.

            15.1.6  OTHER REMEDIES

      In addition to the foregoing remedies (but without duplication of amounts
otherwise paid under this Section 15), Lessee shall be liable for any and all
unpaid Rent due hereunder before, during or after (except as otherwise provided
herein) the exercise of any of the foregoing remedies and for all reasonable
attorneys' fees and other costs and expenses of Lessor, Mortgagee the Owner
Participant and the Note Holders, including, without limitation, interest on
overdue Rent at the rate as herein provided, incurred by reason of the
occurrence of any Lease Event of Default or the exercise of Lessor's remedies
with respect thereto, including all reasonable costs and expenses incurred in
connection with the return of the Airframe or any Engine, in accordance with the
terms of Section 5 or in placing the Airframe or any Engine, in the condition
and airworthiness required by Section 5.

      15.2  LIMITATIONS UNDER CRAF

      Notwithstanding the provisions of Section 15.1, during any period that the
Aircraft, Airframe or any Engine is subject to CRAF in accordance with the
provisions of Section 7.2.3 and in the possession of the U.S. Government, Lessor
shall not, as a result of any Lease Event of Default, exercise its remedies
hereunder in such manner as to limit Lessee's control under this Lease (or any
Permitted Sublessee's control under any Permitted Sublease) of the Aircraft,
Airframe or such Engine, unless at least 30 days' (or such other period as may
then be applicable under CRAF) written notice of default hereunder shall have
been given by Lessor or Mortgagee by registered or certified mail to Lessee (and
any Permitted Sublessee) with a copy to the Contracting Officer Representative
or Representatives for the Military Airlift Command of the United States Air
Force to whom notices must be given under the contract governing Lessee's (or
any Permitted Sublessee's) participation in CRAF with respect to the Aircraft,
Airframe or any Engine.

      15.3 RIGHT TO PERFORM FOR LESSEE

      If Lessee (i) fails to make any payment of Rent required to be made by it
hereunder or (ii) fails to perform or comply with any of its agreements
contained herein and such failure continues for a period of thirty days after
written notice thereof is given by Lessor or Mortgagee to Lessee, Lessor or

<PAGE>

Mortgagee may (but shall not be obligated to) make such payment or perform or
comply with such agreement, and the amount of such payment and the amount of the
expenses of Lessor or Mortgagee incurred in connection with such payment or the
performance of or compliance with such agreement, as the case may be, together
with interest thereon at the Payment Due Rate, shall be deemed Supplemental
Rent, payable by Lessee upon demand by Lessor or Mortgagee, whichever is
entitled thereto. No such payment, performance or compliance shall be deemed to
cure any Lease Default or Lease Event of Default or otherwise relieve Lessee of
its obligations with respect thereto.

      15.4  DETERMINATION OF FAIR MARKET RENTAL VALUE AND FAIR MARKET SALES
            VALUE

      For the purpose of this Section 15, the "Fair Market Rental Value" or the
"Fair Market Sales Value" of the Aircraft, Airframe or any Engine, shall be
determined on an "as is, where is" basis and shall take into account customary
brokerage and other out-of-pocket fees and expenses which typically would be
incurred in connection with a re-lease or sale of the Aircraft, Airframe or any
Engine. Any such determination shall be made by an Appraiser selected by Lessor
and the costs and expenses associated therewith shall be borne by Lessee, unless
Lessor does not obtain possession of the Aircraft, Airframe and Engines pursuant
to this Section 15, in which case an Appraiser shall not be appointed and Fair
Market Rental Value and Fair Market Sales Value for purposes of this Section 15
shall be zero.

      15.5  REMEDIES CUMULATIVE

      Nothing contained in this Lease shall be construed to limit in any way any
right, power, remedy or privilege of Lessor hereunder or under any other
Operative Agreement or now or hereafter existing at law or in equity. Each and
every right, power, remedy and privilege hereby given to, or retained by, Lessor
in this Lease shall be in addition to and not in limitation of every other
right, power, remedy and privilege given under the Operative Agreements or now
or hereafter existing at law or in equity. Each and every right, power, remedy
and privilege of Lessor under this Lease and any other Operative Agreement may
be exercised from time to time or simultaneously and as often and in such order
as may be deemed expedient by Lessor. All such rights, powers, remedies and
privileges shall be cumulative and not mutually exclusive, and the exercise of
one shall not be deemed a waiver of the right to exercise any other. Lessee

<PAGE>

hereby waives to the extent permitted by applicable Law any right which it may
have to require Lessor to choose or elect remedies.

SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC.

      (a) Lessee's obligation to pay Rent hereunder shall be absolute and
unconditional, and shall not be affected by any event or circumstance,
including, without limitation: (i) any setoff, counterclaim, recoupment, defense
or other right that Lessee may have against Lessor, Mortgagee, any Participant,
any Note Holder, or any other Person for any reason whatsoever; (ii) any defect
in the title, airworthiness, condition, design, operation or fitness for use of,
or any damage to or loss or destruction of, the Aircraft, Airframe or any
Engine, or any interruption or cessation in the use or possession thereof by
Lessee for any reason whatsoever; (iii) any insolvency, bankruptcy,
reorganization or similar proceedings by or against Lessee or any other Person;
or (iv) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

      (b) If for any reason whatsoever this Lease shall be terminated in whole
or in part by operation of law or otherwise except as specifically provided
herein, Lessee nonetheless agrees to pay an amount equal to each Rent payment at
the time such payment would have become due and payable in accordance with the
terms hereof had this Agreement not been terminated in whole or in part. Lessee
hereby waives, to the extent permitted by applicable law, any and all rights
that it may now have or that at any time hereafter may be conferred upon it, by
statute or otherwise, to terminate, cancel, quit or surrender this Agreement,
except in accordance with the express terms hereof.

      (c) Nothing set forth in this Section 16 shall be construed to prohibit
Lessee from separately pursuing any claim that it may have from time to time
against Lessor or any other Person with respect to any matter (other than the
absolute and unconditional nature of Lessee's obligations hereunder to pay Rent,
and other than the matters specified in paragraphs (a) and (b) above).

SECTION 17. RENEWAL AND PURCHASE OPTIONS

      17.1  NOTICES GENERALLY

      (a) At least 120 days prior to the Scheduled Expiration Date or, if a
Renewal Lease Term is then in effect, prior to the Scheduled Renewal Term

<PAGE>

Expiration Date of such Renewal Lease Term, Lessee may provide notice to Lessor
that Lessee may exercise either the option to extend the leasing of the Aircraft
for a Renewal Lease Term pursuant to Section 17.2 or the option to purchase the
Aircraft on the Scheduled Expiration Date or Scheduled Renewal Term Expiration
Date of such Renewal Lease Term, as the case may be, pursuant to Section 17.3 (a
"Preliminary Notice").

      (b) If any such Preliminary Notice is given by Lessee, then Lessee may
provide a further notice specifying which option it intends to elect, with
respect to the relevant period, pursuant to Section 17.2.1 or 17.3.1, as the
case may be.

      17.2  RENEWAL OPTIONS

            17.2.1  RENEWAL NOTICE

      (a) If Lessee has given a Preliminary Notice, as specified in Section
17.1, and subject to the terms and conditions of this Section 17.2, Lessee may
exercise its option to extend the leasing of the Aircraft hereunder until the
next Scheduled Renewal Term Expiration Date, on the same terms, provisions and
conditions (except as contemplated by this Section 17) set forth herein and in
the other Lessee Operative Agreements with respect to the Base Lease Term, by
delivery of a notice (a "Renewal Notice") to Lessor not less than 90 days prior
to (i) if the Base Lease Term is then in effect, the Scheduled Expiration Date,
or (ii) if a Renewal Lease Term is then in effect, the Scheduled Renewal Term
Expiration Date for such Renewal Lease Term.

      (b) Notwithstanding anything to the contrary in this Agreement or any
other Operative Agreement:

            (i) No Preliminary Notice or Renewal Notice shall be binding on
      Lessor or oblige Lessor to extend the leasing of the Aircraft hereunder
      for a Renewal Lease Term if any Lease Event of Default shall have occurred
      and be continuing on and as of the date that such Renewal Lease Term would
      otherwise commence.

            (ii) Any Renewal Notice shall be revocable by Lessee until 10
      Business Days after the Renewal Rent is determined in accordance with
      Sections 17.2.2 and unless revoked by written notice by Lessee to Lessor
      shall thereafter become irrevocable and shall constitute an unconditional

<PAGE>

      obligation of Lessee to extend the leasing of the Aircraft hereunder for
      the Renewal Lease Term to which such Renewal Notice relates.

            (iii) Lessee shall not be entitled to give any Renewal Notice if it
      has (x) not delivered a Preliminary Notice or (y) delivered a Purchase
      Notice to Lessor.

            17.2.2  RENEWAL RENT

      (a) During the Renewal Lease Term, Lessee shall pay to Lessor on each
Payment Date, in the manner and in the funds of the type specified in Section
3.3, Renewal Rent in arrears.

      (b) The Renewal Rent payable by Lessee on each Payment Date during any
Fixed Renewal Lease Term shall be the lower of (i) the Renewal Rent Limit and
(ii) the Fair Market Rental Value of the Aircraft for such Renewal Lease Term.
The Renewal Rent payable by Lessee on each Payment Date during any Subsequent
Renewal Lease Term shall be the Fair Market Rental Value of the Aircraft for
such Renewal Lease Term. Any such Fair Market Rental Value shall be determined
not more than 120 days and not less than 100 days prior to the date of
commencement of such Renewal Lease Term by mutual agreement of Lessor and Lessee
or, if they shall be unable to agree, by an appraisal in accordance with Section
17.4. Notwithstanding the foregoing, (i) on the first Payment Date of a Renewal
Term, Lessee shall pay to Lessor a pro-rated amount of Renewal Rent equal to (x)
the Renewal Rent applicable to such Renewal Term divided by 180 multiplied by
(y) the actual number of days elapsed in such Payment Period and (ii) on the
last Payment Date in such Renewal Term Lessee shall pay to Lessor an amount
equal to the Renewal Rent minus the amount referred to in the preceding clause
(i).

            17.2.3  STIPULATED LOSS AND TERMINATION VALUES

      (a) For any Renewal Lease Term, Stipulated Loss Value Dates and
Termination Value Dates shall be extended throughout such Renewal Lease Term on
the same days and for the same months as during the Base Lease Term.

      (b) Stipulated Loss Value and Termination Value amounts that are payable
during any such Renewal Lease Term shall be determined at the same time that the
Renewal Rent for such Renewal Lease Term is determined under Section 17.2.2.
Stipulated Loss Values and Termination Values for any such Renewal Lease Term
shall, commencing on the first day of such Renewal Lease Term, be equal to the

<PAGE>

Fair Market Sales Value of the Aircraft, computed as of the first day of such
Renewal Lease Term, and shall decline ratably on a monthly basis to the Fair
Market Sales Value of the Aircraft as of the last day of such Renewal Lease
Term.

      (c) Any Fair Market Sales Value of the Aircraft, for purposes of
calculating Stipulated Loss Value and Termination Value amounts applicable
during any such Renewal Lease Term, shall be determined by mutual agreement of
Lessor and Lessee or, if they shall be unable to agree, by an appraisal in
accordance with Section 17.4.

      17.3  PURCHASE OPTION

            17.3.1  PURCHASE NOTICE

      (a) Subject to Section 17.1 and the terms and conditions of this Section
17.3, Lessee may elect to purchase the Aircraft, on any Purchase Date, at a
purchase price equal to the lesser of 50% of Lessor's Cost and the Fair Market
Sales Value of the Aircraft computed as of the Purchase Date.

      (b) Lessee may exercise such option to purchase the Aircraft, by delivery
of a notice (a "Purchase Notice") to Lessor not less than 90 days prior to the
Purchase Date specified in such Purchase Notice.

      (c) Notwithstanding anything to the contrary in this Agreement or any
other Operative Agreement:

            (i) Any Purchase Notice (whether delivered or deemed to have been
      delivered) shall be revocable until 10 Business Days after the
      determination of the Fair Market Sales Value in accordance with Section
      17.3.2 and unless revoked by written notice by Lessee to Lessor shall
      thereafter become irrevocable and shall constitute an unconditional
      obligation of Lessee to purchase the Aircraft under this Section 17.3.

            (ii) Lessee shall not be entitled to give any Purchase Notice in
      respect of any Purchase Date if it has delivered a Renewal Notice for a
      Renewal Lease Term that would commence immediately following such Purchase
      Date.

            17.3.2  DETERMINATION OF FAIR MARKET SALES VALUE

      The Fair Market Sales Value of the Aircraft shall be determined not more
than 120 days and not less than 100 days prior to the applicable Purchase Date

<PAGE>

by mutual agreement of Lessor and Lessee or, if they shall be unable to agree,
by an appraisal in accordance with Section 17.4.

            17.3.3  TITLE

      Upon full and final payment by Lessee of (a) the applicable purchase price
of the Aircraft, (b) all unpaid Rent due and payable through and including the
Purchase Date and (c) all other amounts due and payable by Lessee under this
Agreement, Lessor will transfer to Lessee title to the Aircraft in accordance
with Section 4.5.

      17.4  APPRAISALS

      Whenever Fair Market Rental Value or Fair Market Sales Value of the
Aircraft is required to be determined by an appraisal under this Section 17,
Lessee and Lessor shall appoint a mutually satisfactory Appraiser to conduct
such appraisal. If Lessee and Lessor fail to agree upon a satisfactory Appraiser
then each shall promptly appoint a separate Appraiser and such Appraisers shall
jointly determine such amount. If either Lessee or Lessor fails to so appoint an
Appraiser, the determination of the single Appraiser appointed shall be final.
If two Appraisers are appointed and within 7 days after the appointment of the
latter of such two Appraisers, they cannot agree upon such amount, such two
Appraisers shall, within 8 days after such latter appointment, appoint a third
Appraiser and such amount shall be determined by such three Appraisers, who
shall make their separate appraisals within 7 days following the appointment of
the third Appraiser, and any determination so made shall be conclusive and
binding upon Lessor and Lessee. If no such third Appraiser is appointed within
such 8-day period, either Lessor or Lessee may apply to the American Arbitration
Association to make such appointment, and both parties shall be bound by such
appointment. The foregoing appraisal procedure shall in any event be completed
no less than 125 days before the end of the Base Lease Term or the current
Renewal Lease Term, as the case may be. If three Appraisers are appointed and
the difference between the determination which is farther from the middle
determination and the middle determination is more than 125% of the difference
between the middle determination and the third determination, then such farther
determination shall be excluded, the remaining two determinations shall be
averaged and such average shall be final and binding upon Lessor and Lessee.
Otherwise, the average of all three determinations shall be final and binding
upon Lessor and Lessee. The fees and expenses of all such Appraisers and such
appraisal procedure shall be borne equally by Lessee and Lessor, PROVIDED that

<PAGE>

if Lessee elects not to renew this Lease or purchase the Aircraft following the
conclusion of such appraisal, Lessee shall pay all expenses of such appraisal.

SECTION 18. MISCELLANEOUS

      18.1  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 Lessor and Lessee. 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 Lessor and Lessee.

      18.2  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.

      18.3  THIRD-PARTY BENEFICIARY

      This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than Mortgagee, the Participants, the Indenture Indemnitees
and the Persons referred to in Section 4.6) with any rights of any nature
whatsoever against either of the parties hereto, and no person not a party
hereto (other than Mortgagee, the Participants, the Indenture Indemnitees and

<PAGE>

the Persons referred to in Section 4.6) shall have any right, power or privilege
in respect of, or have any benefit or interest arising out of, this Agreement.

      18.4  REPRODUCTION OF DOCUMENTS

      This Agreement, all annexes, 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 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.

      18.5  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
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.

      18.6  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 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 to the Participation Agreement, or to such

<PAGE>

other address or number as either party hereto may hereafter specify by notice
to the other party 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.

      18.7  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 18.6. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 18.7(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.

<PAGE>

      (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.

      18.8  NO WAIVER

      No failure on the part of Lessor to exercise, and no delay by Lessor in
exercising, any of its 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 Lessor or the exercise of any other right, power, remedy or privilege by
Lessor. No notice to or demand on Lessee in any case shall, unless otherwise
required under this Agreement, entitle Lessee to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
Lessor to any other or further action in any circumstances without notice or
demand.

      18.9  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, between the parties
hereto with respect to such subject matter are hereby superseded in their
entireties.

                     [This space intentionally left blank.]

<PAGE>

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

                                        FIRST SECURITY BANK,
                                        NATIONAL ASSOCIATION, not in its
                                          individual capacity, except as
                                          expressly provided herein, but solely
                                          as Owner Trustee under the Trust
                                          Agreement, as Lessor

                                        By______________________________________
                                          Name:
                                          Title:

                                          CONTINENTAL AIRLINES, INC.,
                                          as Lessee

                                        By______________________________________
                                          Name:
                                          Title:

      Receipt of this original counterpart of the foregoing Lease Agreement is
hereby acknowledged on this ____ day of _________, _______.

                                        WILMINGTON TRUST COMPANY,
                                          as Mortgagee

                                        By______________________________________
                                          Name:
                                          Title:

<PAGE>

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

                                        FIRST SECURITY BANK,
                                        NATIONAL ASSOCIATION, not in its
                                          individual capacity, except as
                                          expressly provided herein, but solely
                                          as Owner Trustee under the Trust
                                          Agreement, as Lessor

                                        By______________________________________
                                          Name:
                                          Title:

                                        CONTINENTAL AIRLINES, INC.,
                                          as Lessee

                                        By______________________________________
                                          Name:
                                          Title:

<PAGE>

                                    ANNEX A

             [SEE LEASED AIRCRAFT PARTICIPATION AGREEMENT ANNEX A]

<PAGE>

                                  ANNEXES B-D

           [OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

<PAGE>

                                                    ----------------------------
                                                    EXHIBIT A - LEASE SUPPLEMENT
                                                       LEASE AGREEMENT [___]
                                                    ----------------------------

                             LEASE SUPPLEMENT NO.__

      LEASE SUPPLEMENT No. [__], dated [________, 20__,] between FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Owner Trustee under the Trust Agreement
[_____], dated as of [_____________,] with the Owner Participant named therein
(such Owner Trustee, in its capacity as such Owner Trustee being herein called
"Lessor"), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
("Lessee").

      Lessor and Lessee have heretofore entered into that certain Lease
Agreement [______], dated as of [______________,] relating to one Boeing Model
[__________] aircraft (herein called the "Lease" and the defined terms therein
being hereinafter used with the same meanings). The Lease provides for the
execution and delivery of this Lease Supplement for the purpose of leasing the
Airframe and Engines under the Lease as and when delivered by Lessor to Lessee
in accordance with the terms thereof.

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

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

      1. Lessee has been duly authorized by Lessor to accept, and does hereby
irrevocably accept on behalf of Lessor delivery of the Aircraft from Airframe
Manufacturer under, and for all purposes of, the Aircraft Bill of Sale, the
Participation Agreement and the Purchase Agreement Assignment.

      2. Lessor hereby delivers and leases to Lessee under the Lease and Lessee
hereby accepts and leases from Lessor under the Lease the following described
Boeing [__________] aircraft (the "Aircraft"), which Aircraft as of the date
hereof consists of the following components:

            (i) Airframe: U.S. Registration No. ___________; manufacturer's
      serial no. ___________; and

<PAGE>

            (ii) Engines: two (2) _________________________ engines bearing,
      respectively, manufacturer's serial nos. ___________ and ____________(each
      of which engines has 750 or more rated takeoff horsepower or the
      equivalent of such horsepower).

      3. The Delivery Date of the Aircraft is the date of this Lease Supplement
set forth in the opening paragraph hereof.

      4. Lessee hereby confirms to Lessor that Lessee has duly and irrevocably
accepted the Aircraft under and for all purposes hereof, of the Lease and of the
other Lessee Operative Agreements.

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

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

      7. To the extent, if any, that this Lease Supplement constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction), no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
original executed counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Mortgagee on the signature page
thereof.

                     [This space intentionally left blank.]

<PAGE>

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

                                        FIRST SECURITY BANK,
                                        NATIONAL ASSOCIATION, not in its
                                          individual capacity, except as
                                          expressly provided herein, but solely
                                          as Owner Trustee under the Trust
                                          Agreement, as Lessor

                                        By______________________________________
                                          Name:
                                          Title:

                                        CONTINENTAL AIRLINES, INC.,
                                          as Lessee

                                        By______________________________________
                                          Name:
                                          Title:

<PAGE>

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

                                        FIRST SECURITY BANK,
                                        NATIONAL ASSOCIATION, not in its
                                          individual capacity, except as
                                          expressly provided herein, but solely
                                          as Owner Trustee under the Trust
                                          Agreement, as Lessor

                                        By______________________________________
                                          Name:
                                          Title:

                                        CONTINENTAL AIRLINES, INC.,
                                          as Lessee

                                        By______________________________________
                                          Name:
                                          Title:

      Receipt of this original counterpart of the foregoing Lease Supplement is
hereby acknowledged on this ____ day of _________, __________.

                                        WILMINGTON TRUST COMPANY,
                                          as Mortgagee

                                        By______________________________________
                                          Name:
                                          Title:

<PAGE>

                                                    ----------------------------
                                                    EXHIBIT B - LEASE SUPPLEMENT
                                                       LEASE AGREEMENT [___]
                                                    ----------------------------

                          RETURN ACCEPTANCE SUPPLEMENT

      RETURN ACCEPTANCE SUPPLEMENT dated ________, between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement [_____________],
dated as of [________________________], with the Owner Participant named therein
(such Owner Trustee, in its capacity as such Owner Trustee being herein called
"Lessor"), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
("Lessee").

      Lessor and Lessee have heretofore entered into that certain Lease
Agreement [_________________], dated as of [_____________], relating to one
Boeing Model [___________________] aircraft (herein called the "Lease" and the
defined terms therein being hereinafter used with the same meanings). The Lease
relates to the Airframe and Engines described below.

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

      1. This Return Acceptance Supplement is executed by Lessor and Lessee to
confirm that on the date hereof the following described Airframe and Engines
were returned by Lessee to Lessor:

            (i) Airframe: U.S. Registration No. ________________; manufacturer's
      serial no. __________________; and

            (ii) Engines: two (2) _____________________ engines bearing,
      respectively, manufacturer's serial nos. ____________________________ and
      _________________________.

      2. This Return Acceptance Supplement is intended to be delivered in
_____________________.

      3. Lessor and Lessee agree that the return of the Aircraft is in
compliance with Section 5 and Annex B of the Lease, except as set forth below:

<PAGE>

      4. Lessor and Lessee agree that the Lease is terminated, except for the
provisions thereof that expressly survive termination.

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

                                        FIRST SECURITY BANK,
                                        NATIONAL ASSOCIATION, not in its
                                          individual capacity, except as
                                          expressly provided herein, but solely
                                          as Owner Trustee under the Trust
                                          Agreement, as Lessor

                                        By______________________________________
                                          Name:
                                          Title:

                                        CONTINENTAL AIRLINES, INC.,
                                          as Lessee

                                        By______________________________________
                                          Name:
                                          Title:

<PAGE>

                                 SCHEDULES 1-4

           [OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

<PAGE>

                                                --------------------------------
                                                SCHEDULE 5 - PERMITTED COUNTRIES
                                                    LEASE AGREEMENT [_____]
                                                --------------------------------

                               PERMITTED COUNTRIES

Argentina                                  Malaysia

Australia                                  Malta

Austria                                    Mexico

Bahamas                                    Morocco

Belgium                                    Netherlands

Brazil                                     New Zealand

Canada                                     Norway

Chile                                      Paraguay

Denmark                                    Peoples 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

<PAGE>

                                                        ------------------------
                                                          SCHEDULE 6 - PLACARDS
                                                         LEASE AGREEMENT [_____]
                                                        ------------------------

                                    PLACARDS

                                   Leased from

                   First Security Bank, National Association,
                  not in its individual capacity but solely as
                         Owner Trustee, Owner and Lessor

                                       and
                                  Mortgaged to

                            Wilmington Trust Company,
             not in its individual capacity but solely as Mortgagee--------------------------------------------------------------------------------

                       TRUST INDENTURE AND MORTGAGE [___]

                        Dated as of [____________, 20__]

                                     Between

                   FIRST SECURITY BANK, 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

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

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

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

<PAGE>

<TABLE>
<CAPTION>
                                                  TABLE OF CONTENTS

                                                                                                               PAGE
                                                                                                               ----

                                                   GRANTING CLAUSE

                                                ARTICLE I DEFINITIONS

                                           ARTICLE II THE EQUIPMENT NOTES

<S>                      <C>                                                                                    <C>
SECTION 2.01.            Form of Equipment Notes.................................................................7
SECTION 2.02.            Issuance and Terms of Equipment Notes..................................................12
SECTION 2.03.            Payments from Trust Indenture Estate Only..............................................14
SECTION 2.04.            Method of Payment......................................................................16
SECTION 2.05.            Application of Payments................................................................18
SECTION 2.06.            Termination of Interest in Trust Indenture Estate......................................18
SECTION 2.07.            Registration Transfer and Exchange of Equipment Notes..................................18
SECTION 2.08.            Mutilated, Destroyed, Lost or Stolen Equipment Notes...................................20
SECTION 2.09.            Payment of Expenses on Transfer; Cancellation..........................................20
SECTION 2.10.            Mandatory Redemptions of Equipment Notes...............................................20
SECTION 2.11.            Voluntary Redemptions of Equipment Notes...............................................21
SECTION 2.12.            Redemptions; Notice of Redemption......................................................21
SECTION 2.13.            Option to Purchase Equipment Notes.....................................................22
SECTION 2.14.            Subordination..........................................................................23

                          ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
                                             THE TRUST INDENTURE ESTATE

SECTION 3.01.            Basic Rent Distribution................................................................23
SECTION 3.02.            Event of Loss; Replacement; Voluntary Termination; Optional
                         Redemption.............................................................................25
SECTION 3.03.            Payments After Event of Default........................................................26
SECTION 3.04.            Certain Payments.......................................................................28
SECTION 3.05.            Other Payments.........................................................................29
SECTION 3.06.            Payments to Owner Trustee..............................................................29

                              ARTICLE IV COVENANTS OF OWNER TRUSTEE; EVENTS OF DEFAULT;
                                                REMEDIES OF MORTGAGEE

SECTION 4.01.            Covenants of Owner Trustee.............................................................30
SECTION 4.02.            Event of Default.......................................................................31
SECTION 4.03.            Certain Rights.........................................................................32
SECTION 4.04.            Remedies...............................................................................34
SECTION 4.05.            Return of Aircraft, Etc................................................................37

<PAGE>

                                                  TABLE OF CONTENTS
                                                  -----------------
                                                     (Continued)
                                                                                                               PAGE
                                                                                                               ----

SECTION 4.06.            Remedies Cumulative....................................................................38
SECTION 4.07.            Discontinuance of Proceedings..........................................................38
SECTION 4.08.            Waiver of Past Defaults................................................................38
SECTION 4.09.            Appointment of Receiver................................................................39
SECTION 4.10.            Mortgagee Authorized to Execute Bills of Sale, Etc.....................................39
SECTION 4.11.            Rights of Note Holders to Receive Payment..............................................39

                                          ARTICLE V DUTIES OF THE MORTGAGEE

SECTION 5.01.            Notice of Event of Default.............................................................39
SECTION 5.02.            Action Upon Instructions; Certain Rights and Limitations...............................40
SECTION 5.03.            Indemnification........................................................................43
SECTION 5.04.            No Duties Except as Specified in Trust Indenture or
                         Instructions...........................................................................44
SECTION 5.05.            No Action Except Under Lease, Trust Indenture or Instructions..........................44
SECTION 5.06.            Replacement Airframes and Replacement Engines..........................................44
SECTION 5.07.            Indenture Supplements for Replacements.................................................44
SECTION 5.08.            Effect of Replacement..................................................................45
SECTION 5.09.            Investment of Amounts Held by Mortgagee................................................45

                                   ARTICLE VI THE OWNER TRUSTEE AND THE MORTGAGEE

SECTION 6.01.            Acceptance of Trusts and Duties........................................................45
SECTION 6.02.            Absence of Duties......................................................................46
SECTION 6.03.            No Representations or Warranties as to Aircraft or Documents...........................46
SECTION 6.04.            No Segregation of Monies; No Interest..................................................47
SECTION 6.05.            Reliance; Agreements; Advice of Counsel................................................47
SECTION 6.06.            Capacity in Which Acting...............................................................48
SECTION 6.07.            Compensation...........................................................................48
SECTION 6.08.            Instructions from Note Holders.........................................................48

                              ARTICLE VII INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE

SECTION 7.01.            Scope of Indemnification...............................................................49

                                    ARTICLE VIII SUCCESSOR AND SEPARATE TRUSTEES

SECTION 8.01.            Notice of Successor Owner Trustee......................................................50
SECTION 8.02.            Resignation of Mortgagee; Appointment of Successor.....................................50
SECTION 8.03.            Appointment of Additional and Separate Trustees........................................51

<PAGE>

                                                  TABLE OF CONTENTS
                                                  -----------------
                                                     (Continued)
                                                                                                               PAGE
                                                                                                               ----

                            ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
                                                 AND OTHER DOCUMENTS

SECTION 9.01.            Instructions of Majority; Limitations..................................................52
SECTION 9.02.            Trustees Protected.....................................................................54
SECTION 9.03.            Documents Mailed to Note Holders.......................................................54
SECTION 9.04.            No Request Necessary for Lease Supplement or Trust Indenture
                         Supplement.............................................................................55

                                               ARTICLE X MISCELLANEOUS

SECTION 10.01.           Termination of Trust Indenture.........................................................55
SECTION 10.02.           No Legal Title to Trust Indenture Estate in Note Holders...............................55
SECTION 10.03.           Sale of Aircraft by Mortgagee Is Binding...............................................55
SECTION 10.04.           Trust Indenture for Benefit of Owner Trustee, Mortgagee, Owner
                         Participant, Note Holders and the other Indenture Indemnitees..........................56
SECTION 10.05.           Notices................................................................................56
SECTION 10.06.           Severability...........................................................................56
SECTION 10.07.           No Oral Modification or Continuing Waivers.............................................56
SECTION 10.08.           Successors and Assigns.................................................................57
SECTION 10.09.           Headings...............................................................................57
SECTION 10.10.           Normal Commercial Relations............................................................57
SECTION 10.11.           Governing Law; Counterpart Form........................................................57
SECTION 10.12.           Voting By Note Holders.................................................................58
SECTION 10.13.           Bankruptcy.............................................................................58

EXHIBIT A               Form of Trust Indenture and Mortgage Supplement
SCHEDULE I              Equipment Notes Amortization and Interest Rates
</TABLE>

<PAGE>

                       TRUST INDENTURE AND MORTGAGE [___]

            TRUST INDENTURE AND MORTGAGE [___], dated as of [___________, 20__]
("Trust Indenture"), between FIRST SECURITY BANK, 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 and the
Lessee's obligations to the Note Holders and the Indenture Indemnitees;

            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;

<PAGE>

                                 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
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 each of the Indenture Indemnitees and the prompt payment of all
amounts from time to time owing hereunder, under the Participation Agreement and
the Lease to the Loan Participants, the Note Holders or any Indenture Indemnitee
by the Owner Trustee or the Lessee and for the uses and purposes and subject to
the terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
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 each of the Indenture Indemnitees, 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 two Engines, with the manufacturer's serial numbers of [_____] and
[_____], each of which Engines is a [_________________________] 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

<PAGE>

payable to or receivable by the Lessor under the Lease pursuant thereto, and,
subject to Section 5.02 hereof, the right to make 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, the Owner Participant or any other Person in respect of any
determination of invalidity of any thereof;

_______________

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

<PAGE>

            [(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 Indenture Indemnitees, 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
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 Indenture Indemnitees shall have no obligation or

<PAGE>

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 Indenture Indemnitees 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.

            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

<PAGE>

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
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

_______________

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

<PAGE>

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.

            FIRST SECURITY BANK, 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: [__________, ____]

                            $_______________________

             INTEREST RATE                              MATURITY DATE
<PAGE>

             [___________]                              [___________]

            FIRST SECURITY BANK, 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 First Security Bank,
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
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).

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

<PAGE>

            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
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

<PAGE>

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

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

<PAGE>

            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.

                                      * * *

            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.

                                        FIRST SECURITY BANK, 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
        Payment Date                            Original Amount 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
Applicable Pass Through Trust Agreements. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations of

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

<PAGE>

$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 paid 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) 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); (ii) (x) the amount equal to
interest on any Downgrade Advance (other than any Applied Downgrade Advance)
payable under Section 3.07 of each Liquidity Facility minus Investment Earnings
from such Downgrade Advance multiplied by (y) the fraction specified in the
foregoing clause (i); (iii) (x) the amount equal to interest on any
Non-Extension Advance (other than any Applied Non-Extension Advance) payable
under Section 3.07 of each Liquidity Facility minus Investment Earnings from
such Non-Extension Advance multiplied by (y) the fraction specified in the
foregoing clause (i); and (iv) 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

<PAGE>

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.

            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

<PAGE>

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.

            (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)

<PAGE>

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
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.

<PAGE>

            (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.

            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.

<PAGE>

            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.

            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 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 nor any other Indenture Indemnitee 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 to such Note Holder, such
Indenture Indemnitee or the Mortgagee hereunder (including, without limitation,
under the third paragraph of Section 2.02 hereof) and under the other Operative
Agreements by the Owner Trustee and the Lessee (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

<PAGE>

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
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.

<PAGE>

            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
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

<PAGE>

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.

            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

<PAGE>

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
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 irrevocable written notice of its
election of such option to the Mortgagee, which notice shall specify a date for
such purchase within 15 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
date of the giving of such notice until the date on which such purchase is
required to occur pursuant to the terms of the preceding sentence.

            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

<PAGE>

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.

            (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 OF INCOME 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

<PAGE>

            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;

      (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".

<PAGE>

            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
            which they are entitled to reimbursement, or indemnity by Lessee,
            under the Operative Agreements and then (b) to pay any other Secured
            Obligations then due to the Mortgagee, the Note Holders and the
            other Indenture Indemnitees under this Trust Indenture, the
            Participation Agreement or the Equipment Notes (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.

<PAGE>

            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:

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) all Secured Obligations
            payable to the other Indenture Indemnitees hereunder and under the
            Participation Agreement and the Lease (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

<PAGE>

            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;

       (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

<PAGE>

            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
            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 or any other Indenture
Indemnitee, in each case whether pursuant to Section 9 of the Participation
Agreement or as Supplemental Rent, directly to the Person entitled thereto. 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

<PAGE>

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,
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.

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

<PAGE>

                                   ARTICLE IV

           COVENANTS OF OWNER TRUSTEE; EVENTS OF DEFAULT; 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
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 and 11 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

<PAGE>

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
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

<PAGE>

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 30 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

            (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,

<PAGE>

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.

            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] [six]<F11>
immediately preceding Basic Rent payment dates, or the Owner Trustee has cured
[six] [eight]<F12> 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

_______________
<F11>
Insert appropriate term for Owner Participant
<F12>
Insert appropriate term for Owner Participant

<PAGE>

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 the
Indenture Indemnitees in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not
otherwise attempt to recover any such amount paid by it on behalf of the Lessee
pursuant to this Section 4.03 except by demanding of the Lessee payment of such
amount, or by commencing an action at law against the Lessee and obtaining and
enforcing a judgment against the Lessee for the payment of such amount or taking
appropriate action in a pending action at law against the Lessee (PROVIDED, that
at no time while an Event of Default shall have occurred and be continuing shall
any such demand be made or shall any such action be commenced (or continued) and
any amounts nevertheless received by the Owner Trustee in respect thereof shall
be held in trust for the benefit of, and promptly paid to, the Mortgagee for
distribution as provided in Section 3.03 hereof).

            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]<F13> 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

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

<PAGE>

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
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

<PAGE>

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 or a Lease Event of Default under
Section 14.5 of the Lease 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 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
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

<PAGE>

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
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

<PAGE>

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.

            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

<PAGE>

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
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

<PAGE>

(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
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)]<F14> provided, that the rights referred
      to in this clause (1) shall not be deemed to include the exercise of any

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

<PAGE>

      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)]<F15>;

            (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]<F16>, 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
      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]<F17> 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;

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

<PAGE>

            (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]<F18> 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
      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

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

<PAGE>

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
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.

<PAGE>

            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
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.

<PAGE>

            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 endorsed
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
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

<PAGE>

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]<F19> with respect
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,

_______________
<F19>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

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
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

<PAGE>

relating to Lessee the manner of the 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
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.

<PAGE>

                                  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;
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.

<PAGE>

                                  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
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.

<PAGE>

            (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
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

<PAGE>

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.

                                   ARTICLE IX

     SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND 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

<PAGE>

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
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 other Indenture 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

<PAGE>

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
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.

<PAGE>

            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 Indenture Indemnitees, the Note Holders and the Mortgagee
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.

            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,

<PAGE>

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 the
                            other Indenture Indemnitees

            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 the other Indenture Indemnitees, 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, any Note Holder or any other Indenture
Indemnitee, 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 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

<PAGE>

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
[or any Permitted Sublessee]<F20>, 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

_______________
<F20>
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.

<PAGE>

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.

            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.

                                        FIRSTSECURITY BANK, 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 FIRST
SECURITY BANK, 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.

<PAGE>
                                AIRCRAFT ENGINES

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

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
Indenture Indemnitees, 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
Indenture Indemnitees, 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.

                                        FIRSTSECURITY BANK,
                                          NATIONAL ASSOCIATION, not in its
                                          individual capacity, but solely as
                                          Owner Trustee, Owner Trustee

                                        By______________________________________
                                           Name:
                                           Title:

<PAGE>

                                                    TRUST INDENTURE AND MORTGAGE

                                   SCHEDULE I

                     ORIGINAL AMOUNT          INTEREST RATE
                     ---------------          -------------
Series A-1:
Series A-2:
Series B:
Series C:
Series D:

<PAGE>

                                                    Trust Indenture and Mortgage

                           Equipment Note Amortization

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

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