Document:

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                                                                   EXHIBIT 10.30

                             FIRST PRIORITY CHATTEL
                         MORTGAGE AND SECURITY AGREEMENT

     This FIRST PRIORITY CHATTEL MORTGAGE AND SECURITY AGREEMENT (this "Chattel
Mortgage"), dated May 7, 1997, between WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except as expressly set
forth herein, but solely as Owner Trustee under the Trust Agreement (as
hereinafter defined), having its chief executive office and principal place of
business at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890, (hereinafter called the "Mortgagor"), as Mortgagor, and FINOVA CAPITAL
CORPORATION, a Delaware corporation, having its chief executive office and
principal place of business at 1850 North Central Avenue, Phoenix, Arizona 85002
(hereinafter called the "Mortgagee"), as Mortgagee.

                                    WHEREAS:

     (A) The Mortgagor and Mortgagee have entered into Secured Loan Agreement
dated as of May 7, 1997 (hereinafter the "Loan Agreement"), providing for the
making of the Loan (hereinafter defined) by the Mortgagee to the Mortgagor;

     (B) It is a condition precedent to the Mortgagee's obligation to make the
Loan to the Mortgagor under the Loan Agreement, that Mortgagor execute and
deliver this Chattel Mortgage for the purposes, among other things, of securing:
(1) the payment of all sums which may become payable by the Mortgagor under the
Loan Agreement and this Chattel Mortgage and each other Loan Document (as
hereinafter defined), and (2) the performance of the covenants, undertakings and
obligations of the Mortgagor under the Loan Agreement, this Chattel Mortgage and
each other Loan Document;

(such payment and performance obligations being hereinafter collectively
referred to as the "Obligations"), and for the purpose of subjecting the
properties and assets hereinafter described to the Lien of this Chattel
Mortgage.

     NOW, THEREFORE, in consideration of the premises and Mortgagee's making the
Loan and other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound and to secure
the performance of the Obligations, the Mortgagor does hereby grant, bargain,
sell, transfer, convey and mortgage unto the Mortgagee, its successors and
assigns, and gives to the Mortgagee a

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first priority security interest in and Lien upon the Flight Equipment (as
hereinafter defined) and a first priority security interest in and Lien upon all
the rest of the following described property, to wit:

                         SCHEDULE OF MORTGAGED PROPERTY

                                  CLAUSE FIRST.

                                    Airframes

     Four (4) Airframes, identified as follows:

                                       FAA           Manufacturer's
Manufacturer          Model    Registration Number    Serial Number
-----------------   --------   -------------------   --------------
Boeing              747-273C          N471EV             20651
McDonnell Douglas   DC-9-33F          N933F              47191
McDonnell Douglas   DC-9-33F          N944F              47194
McDonnell Douglas   DC-9-33F          N945F              47279

together with all jet fuel, appliances, parts, modules, instruments, avionics,
accessories and any other equipment (including, without limitation, radio and
radar) whether now owned or hereafter acquired from time to time thereto
belonging or owned by the Mortgagor and installed in or appurtenant to said
Airframe.

                                     Engines

          Ten(10) Pratt & Whitney Engines, each such Engine having 750 or more
rated take-off horsepower or the equivalent thereof, identified by the following
model and serial numbers:

Model     Serial Numbers
-------   --------------
JT9D-7J       662205
JT9D-7J       662254
JT9D-7F       689542
JT9D-7F       685607
JT8D-9A       653895
JT8D-9A       665815
JT8D-9A       666348

                                      -2-

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JT8D-9A       656041
JT8D-9A       666937
JT8D-9A       678072

together with any and all Parts incorporated or installed therein or attached
thereto and any and all Parts removed therefrom so long as title thereto shall
remain vested in the Mortgagor in accordance with the terms of the Lease after
removal from such Engine, and all replacements and substitutions therefor and
whether now owned or hereafter acquired by the Mortgagor.

                                 CLAUSE SECOND.

          All property which shall be subjected to the Lien of this Chattel
Mortgage by a supplemental chattel mortgage in substantially the form of
Schedule II hereto.

          The Airframes and Engines referred to in Clause First and all property
which shall be identified as an Engine in, and subjected to the Lien of this
Chattel Mortgage by, a supplemental chattel mortgage as provided in this Clause
Second are hereinafter collectively referred to as the "Flight Equipment."

                                  CLAUSE THIRD.

          All warranties, service contracts and product agreements of any
manufacturer or of any maintenance and overhaul agency of the Flight Equipment,
or any subcontractor or supplier or vendor thereof, to the extent assignable or
enforceable, and any and all rights of the Mortgagor to compel performance of
the terms of such warranties, service contracts and product agreements in
respect of any of the Flight Equipment.

                                 CLAUSE FOURTH.

          All casualty insurance policies maintained with respect to the Flight
Equipment pursuant to this Chattel Mortgage, the Lease or any other Permitted
Lease (excluding, however, the Excluded Amounts).

                                      -3-

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                                  CLAUSE FIFTH.

          All monies deposited from time to time with the Mortgagee pursuant to
Section 2.1 hereof.

                                  CLAUSE SIXTH.

          All records, logs, manuals and documents or other materials of any
kind relating to the condition, use, location, maintenance of or repairs or
overhauls to all or any part of the Flight Equipment.

                                 CLAUSE SEVENTH.

          All right, title and interest of the Mortgagor in, to and under the
Second Amended and Restated Lease Agreement, as amended by the Third Amendment
to Lease dated as of May 7, 1997 all as more particularly described in Annex I
(including its rights under the Guaranty) and any other Permitted Lease (as
hereinafter defined) or other arrangement for the operation of all or any part
of the Flight Equipment, including but not limited to, the Mortgagor's right,
title and interest in and to all of the monies due and to become due to the
Mortgagor thereunder (however, except as expressly provided herein, Mortgagee
assumes none of the Mortgagor's obligations thereunder), excluding only the
Excluded Amounts (as hereinafter defined), and Mortgagor's right to compel
performance of all the Lessee's or any other Permitted Lessee's obligations
thereunder, including all rights under Section 1110 of the Bankruptcy Code of
the United States or any subsequently enacted statutes of similar import, and
together with all general intangibles and contract rights related thereto,
including the right of Mortgagor to demand, receive and retain and compel
payment of all rents, issues, proceeds, properties, revenues and other income
derived from the Flight Equipment, including casualty insurance proceeds, but
excluding the Excluded Amounts and all rights of the Mortgagor to exercise any
election or option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to take any action under or
in respect of any such document or to accept surrender or redelivery of any item
of Flight Equipment or any part thereof, as well as all the rights, powers and
remedies on the part of the Mortgagor arising out of any Lease Event of Default.

                                      -4-

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                                 CLAUSE EIGHTH.

          All Proceeds, products, accessions, rents, profits, income, benefits,
substitutions, renewals and replacements of and to any of the Property of the
Mortgagor described in the preceding Clauses (including, without limitation, all
causes of action, claims and warranties now or hereafter held by the Mortgagor
in respect of any of the items listed above) and to the extent related to any
Property described in said clauses or such Proceeds, products and accessions,
all books, correspondence, credit files, records, invoices and other papers,
including without limitation all tapes, cards, computer runs and other papers
and documents in the possession or under the control of the Mortgagor or any
computer bureau or service company from time to time acting for the Mortgagor.

          Title to or a Lien upon all property mortgaged hereby, or intended to
be, and which is hereafter acquired by the Mortgagor or to which it may at any
time hereafter be, in any manner, entitled at law or in equity, and required to
be subjected hereto or intended so to be, shall vest in the Mortgagee, under the
terms and conditions of this Chattel Mortgage, forthwith upon acquisition
thereof by the Mortgagor, and such property shall be as fully embraced within
the provisions of this Chattel Mortgage and subject to the Lien hereof as if
such property were now owned by the Mortgagor and were specifically described
herein and mortgaged hereby.

EXCLUDING, HOWEVER, IN ALL CASES, EXCLUDED AMOUNTS (all such property, rights
and privilege, excluding Excluded Amounts, collectively, the "Mortgaged
Property").

          TO HAVE AND TO HOLD, all and singular said property unto the
Mortgagee, its successors and assigns, as security as aforesaid.

          All of the Mortgaged Property shall secure all of the Obligations.

          IT IS HEREBY COVENANTED AND DECLARED by and between the parties hereto
and their respective successors and assigns that the terms upon which the
Mortgaged Property shall be held, used and operated are as follows:

                                    ARTICLE I

                                   DEFINITIONS

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          SECTION 1.1 For all purposes of this Chattel Mortgage, unless the
context otherwise requires:

          "747 Aircraft" the Boeing Model 747-273C Aircraft bearing
manufacturer's serial number 20651 and FAA Registration No. N471EV, together
with two Pratt & Whitney JT9D-7J aircraft engines bearing manufacturer's serial
numbers 662205 and 662254, and two Pratt & Whitney JT9D-7F aircraft engines
bearing manufacturer's serial numbers 685607 and 689542, as more fully described
in Granting Clause First hereof.

          "DC-9 Aircraft" the three McDonnell Douglas DC-9-33F Aircraft bearing
manufacturer's serial number 47191, 47194 and 47279 and FAA Registration No.
N933F, N944F and N945F, respectively, together with six Pratt & Whitney JT8D-9A
aircraft engines bearing manufacturer's serial numbers 665815, 678072, 666937,
653895, 666348 and 656041, as more fully described in Granting Clause First
hereof.

          "Airlines" Evergreen International Airlines, Inc., an Oregon
corporation, having its principal place of business and chief executive office
at 3850 Three Mile Lane, McMinnville, Oregon 97128-9361; Telephone No.:(503)
472-9361; Telefax No.: (503) 472-1048.

          "Aircraft Engines", "appliances" and "snare parts" shall have the
respective meanings given to these terms in the Transportation Code as in effect
on the date of this instrument.

          "Chattel Mortgage" shall mean this instrument as originally executed
or as it may from time to time be supplemented or amended by one or more
instruments supplementary or amendatory hereto and which are executed by the
Mortgagor.

          "Closing Date" shall mean the date the Loan is advanced under the Loan
Agreement.

          "Collateral" shall mean all property which at the time of any
determination is subject to a Lien in favor of the Mortgagee, granted by the
Mortgagor under this Chattel Mortgage or by the Owner Participant under the
Beneficial Interest Security Agreement.

          "Default" or "Event of Default" shall have the meanings ascribed to
such terms in Schedule I hereto.

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          "Engine" or "Engines" shall mean any or all of the Engines which are
part of the Flight Equipment.

          "Event of Loss" with respect to the Airframe or any Engine shall have
the meaning given such term in the Lease.

          "Excluded Amounts" shall mean (i) indemnity or similar payments paid
or payable by Lessee to Mortgagor, any affiliate of Mortgagor or any director,
officer, employee, representative or agent of Mortgagor or any such affiliate,
pursuant to the terms of the Lease, (ii) proceeds of public liability insurance
in respect of the Mortgaged Property payable as a result of insurance claims
made, or losses suffered, by Mortgagor, any affiliate of Mortgagor or any
director, officer, employee, representative or agent of Mortgagor or any such
affiliate, (iii) proceeds of insurance maintained with respect to the Mortgaged
Property by Mortgagor or any such affiliate and not required under any other
Loan Document, (iv) Rent payable in respect of the DC-9 Aircraft (other than
Rent Mortgagor causes Lessee to pay in order to retain quiet enjoyment to the
DC-9 Aircraft in accordance with the second paragraph of the Repayment Schedule
attached to the Loan Agreement); (v) any interest paid or payable on any amounts
described in clauses (i) through (iv) of this definition, and (vi) the proceeds
from the enforcement of the payment of any amount described in clauses (i)
through (iv) of this definition.

          "Federal Aviation Act" shall mean Title 49 of the Unites States Code
(which, among other things, recodified the Federal Aviation Act of 1958 as
amended to the time of such recodification), as amended.

          "Federal Aviation Administration" or "FAA" shall mean the Federal
Aviation Administration provided for in the Department of Transportation Act of
1966, as in effect on the date of this Chattel Mortgage and as modified or
amended hereafter, or any successor or substituted governmental authority at the
time having jurisdiction over the Flight Equipment.

          "Flight Equipment" shall have the meaning ascribed to such term in the
granting Clause Second hereof.

          "Guarantor" Evergreen International Aviation, Inc., an Oregon
corporation, having its principal place of business and chief executive office
at 3850 Three Mile Lane, McMinnville, Oregon 97128-9361; Telephone No.: (503)
472-9361; Telefax No.: (503) 472-1048.

                                      -7-

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          "Guaranty" the Guaranty and Subordination Agreement dated as of the
Closing Date to be entered into by the Guarantor for the benefit of the
Mortgagor.

          "Lease" shall mean the Second Amended and Restated Lease Agreement,
dated as of 1996, between Borrower and Lessee, as more particularly described in
Annex I, and as amended by the Third Amendment to Lease.

          "Lease Event of Default" shall mean an Event of Default, as defined in
the Lease, or in the event any other Permitted Lease is in place with respect to
an Aircraft, an event of default, or the equivalent thereof, under any such
Permitted Lease.

          "Lessee" shall mean Airlines.

          "Lien" shall mean any mortgage, pledge, lien, charge, encumbrance,
option, security interest or lease (including any conditional sale agreement,
equipment trust agreement, or other title retention agreement) or right or claim
of any person, whether voluntary or involuntary in nature.

          "Loan" shall mean the principal amount of the loan made by the
Mortgagee pursuant to the Loan Agreement, which is outstanding from time to time
and due the Mortgagee under the Loan Agreement and the Note.

          "Loan Agreement" shall mean that certain Secured Loan Agreement dated
as of May 8, 1997 between Mortgagor and Mortgagee.

          "Loan Documents" shall mean collectively, the Loan Agreement, the
Note, this Chattel Mortgage, the Third Amendment to Lease, and all other
documents executed in connection with each of the foregoing agreements or
contemplated thereby or the transactions related thereto.

          "Loan Term" shall mean the period commencing on the Closing Date
through and including that date which shall be the earlier of: (i) May 7, 2005,
or (ii) the date on which the Loan becomes payable in full under the provisions
of Paragraph 7 or 8 of the Loan Agreement.

          "Mortgagor Order" and "Mortgagor Request" shall mean, respectively, a
written order or request signed in the name of the Mortgagor by an authorized
officer of the Mortgagor and delivered to the Mortgagee in accordance with the
terms hereof.

                                      -8-

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          "Note" shall mean the Promissory Note dated the Closing Date issued by
the Mortgagor to the Mortgagee pursuant to the terms of the Loan Agreement.

          "Obligations" shall have the meaning set forth in Paragraph (B) of the
recitals.

          "Officer's Certificate" shall mean a certificate signed by an
authorized officer of the Mortgagor and delivered to the Mortgagee.

          "Owner Participant" collectively, 747, Inc., an Oregon corporation,
Delford M. Smith, a natural person, and King, Christian Inc., a Nevada
corporation, with respect to the 747 Aircraft, and 747, Inc., with respect to
the DC-9 Aircraft.

          "Parts" shall mean any and all appliances, parts, instruments,
appurtenances, accessions, furnishings, modules, avionics and other equipment of
whatever nature which may from time to time be incorporated or installed in or
attached to the Airframe or any Engine.

          "Permitted Lease" shall mean the Lease, any Permitted Sublease, or any
other lease relating to the Aircraft that the Mortgagee has consented to in
writing.

          "Permitted Lessee" shall mean a lessee under any Permitted Lease.

          "Permitted Liens" shall mean:

          (i) materialmen's, mechanics', workmen's, repairmen's, employees' or
other like Liens arising in the ordinary course of Mortgagor's, Lessee's or any
Permitted Sublessee's business securing obligations that are not overdue for a
period of more than thirty (30) days or are being contested in good faith by
appropriate proceedings, so long as during such 30-day period there is not, or
such proceedings do not involve, any material risk of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein;

          (ii) Liens arising out of any judgment or award against Mortgagor,
Lessee (or any Permitted Sublessee), unless the judgment secured shall not,
within thirty (30) days after the entry thereof, have been discharged, vacated,
reversed or execution thereof stayed pending appeal or shall not have been
discharged, vacated or reversed within thirty (30) days after the expiration of
such stay, so long as during any such 30-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 Airframe or any Engine or any interest therein (unless Mortgagor,

                                      -9-

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Lessee or any Permitted Sublessee shall have provided a bond or other security
in an amount and under terms reasonably satisfactory to Mortgagee);

          (iii) any other Lien with respect to which Mortgagor, Lessee or a
Permitted Sublessee shall have provided a bond or other security in an amount
and under terms reasonably satisfactory to Mortgagee;

          (iv) the Lease, any Permitted Sublease entered into pursuant to the
terms of the Lease and any other Permitted Lease, and any "Permitted Liens", as
that term is defined in the Lease; and

          (v) the Lien of this Chattel Mortgage and the other Loan Documents.

          "Permitted Sublease" shall mean a sublease permitted under the Lease.

          "Permitted Sublessee" shall mean a sublessee under any sublease
permitted under the Lease.

          "Proceeds" shall have the broadest meaning permissible under the
Uniform Commercial Code of Arizona and shall include all proceeds, whether such
proceeds are money, accounts, instruments, chattel paper, documents, equipment,
inventory, farm products, consumer goods, general intangibles, or deposit
accounts, and, in any event, shall include but shall not be limited to (i) all
rents, fees, lease payments, sublease payments and all other amounts due or
collected under or in respect of leases (including maintenance reserves and
return condition adjustments, if any, to the extent the same shall be the
property of the Mortgagor under the Lease or any other Permitted Lease),
subleases, all insurance proceed, judgments or awards relating to any of the
foregoing and all goods, documents, instruments, general intangibles, chattel
paper and accounts, wherever located, acquired with the cash proceeds of such
equipment or the proceeds thereof and (ii) any and all payments (in any form
whatsoever) made or due and payable to the Mortgagor, from time to time, in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Mortgaged Property by any governmental
body, authority, bureau or agency (or any person or entity acting under color of
governmental authority); excluding, however, the Excluded Amounts.

          "Taxes" shall mean all present and future taxes, levies, imposts,
duties or charges of any nature whatever and wherever imposed, including,
without limitation, value added taxes or similar taxes and any franchise,
transfer, sales, use, business, occupation, excise, personal property, real
property, stamp or other tax imposed by any national or local taxing or fiscal
authority or agency, together with any penalties,

                                      -10-

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additions to tax, fines or interest thereon, excluding, however, any and all
taxes imposed upon or measured by the income, receipts, earnings and profits or
net worth of the Mortgagee; and "tax" and "taxation" shall be construed
accordingly.

          "Third Amendment to Lease" shall mean the Third Amendment to Lease
Agreement, dated the Closing Date, between Mortgagor and Mortgagee.

          "Transaction Documents" shall mean the Loan Documents, the Trust
Agreement, the Guaranty and the Lease.

                                   ARTICLE II

                      CASH COLLATERAL AND SECURITY DEPOSIT

          SECTION 2.1 A. Cash Collateral. All monies received by the Mortgagee
as proceeds of casualty insurance upon any part of the Mortgaged Property and
all monies elsewhere herein provided to be held and applied under this Section,
and all monies, if any, required to be paid to the Mortgagee hereunder, whose
disposition is not elsewhere herein otherwise specifically provided for (all
such monies being hereinafter sometimes called the "Cash Collateral"), shall be
held by the Mortgagee and applied by the Mortgagee from time to time as provided
herein and in the Loan Agreement. Unless otherwise expressly set forth herein to
the contrary, Mortgagee shall have no obligation to segregate Cash Collateral.

          B. Proceeds of Insurance Used for Repair. Provided an Event of Default
shall not have occurred and be continuing, and subject to the terms and
provisions of the Lease, to the extent that any Cash Collateral is the proceeds
of casualty insurance upon any part of the Mortgaged Property not subject to an
Event of Loss, the same may be withdrawn by the Mortgagor and shall be paid by
the Mortgagee, upon Mortgagor Order, (a) to reimburse the Mortgagor for, and up
to an amount not exceeding, expenditures made to repair and/or restore the
property damaged as required hereunder, but only upon receipt by the Mortgagee
of (1) a Mortgagor Request for the withdrawal and payment of specified proceeds
of insurance then included in the Cash Collateral, and (2) an Officer's
Certificate, dated not more than five days prior to the application for such
withdrawal, stating that expenditures have been made by the Mortgagor or Lessee
in a specified amount for one or more of the purposes aforesaid, which shall be
briefly described, and also stating that no part of such expenditures has been
or is then being used in any other previous or then pending application, as the
basis for the withdrawal of any Cash Collateral from the Mortgagee hereunder; or
(b) directly to the vendor or contractor who has provided or will provide parts
and/or labor, including, without

                                      -11-

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limitation, for any down payments, advance, deposits or other amounts payable in
respect of equipment, parts, services or repairs provided or rendered or to be
provided or rendered (including by Evergreen Air Center, Inc., or other
affiliates of the Owner Participants or the Lessee, as long as such terms are no
less favorable than would be available from unrelated third parties), specified
proceeds of insurance then included in the Cash Collateral, upon receipt by the
Mortgagee of a Mortgagor Request for withdrawal and payment of such insurance
proceeds and upon receipt by Mortgagee of an invoice for payment for such labor
or parts used to repair the Flight Equipment, and for which an insurance payment
has been made to Mortgagee.

          SECTION 2.2 Cash Collateral under the Lease. Notwithstanding anything
to the contrary contained in this Section 2, any amount held by the Mortgagee as
assignee of the Mortgagor's rights to payments by the Lessee pursuant to the
Lease shall be held, applied and paid over by the Mortgagee as provided in the
Lease and, without limiting the foregoing, the Mortgagee hereby agrees for the
benefit of Lessee to perform the duties of the Mortgagor under the Lease in
respect of such amounts.

                                   ARTICLE III

                     PARTICULAR COVENANTS OF THE MORTGAGOR

          The Mortgagor covenants, agrees, represents and warrants in particular
as hereinafter in this Article set forth:

          SECTION 3.1 Warranty and Covenant of Title. At the time of the
execution and delivery of this instrument, the Mortgagor owns the Flight
Equipment subject to no lien, charge, encumbrance, option, title retention
agreement or security interest, except Permitted Liens and Liens that will be
released concurrently with the Closing, and has full power and authority to
grant, bargain, sell, transfer, convey and mortgage, and give a security
interest in, the Flight Equipment in the manner and form as set forth in this
Chattel Mortgage. Except as set forth in the foregoing, the Mortgagor is and
shall remain the legal owner, free and clear of all mortgages, security
interests, liens, charges, encumbrances, title retention agreements, and options
(except for Permitted Liens) of the Flight Equipment.

          The Mortgagor hereby does and will forever warrant and defend upon
direction of an Owner Participant the title to and possession of the Mortgaged
Property against the claims and demands of all persons whomsoever except the
claims and demands under the Permitted Liens and at all times upon direction of
an Owner

                                      -12-

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Participant keep the Lien and security interest granted herein with respect to
the Mortgaged Property, at the Mortgagor's expense, a duly perfected first
priority security interest in and Lien upon the Flight Equipment, and a duly
perfected first priority security interest in and Lien upon all of the other
Mortgaged Property as constituted from time to time, superior to the rights of
all third parties (except the rights of Lessee under the Lease and Permitted
Liens) to the fullest extent permitted by applicable law, and shall upon
direction of an Owner Participant obtain any authorization, approval, license,
or consent of any competent governmental or judicial authority, including,
without limitation, the Federal Aviation Administration Aircraft Registry which
may be or become necessary in order to obtain the full benefits of this Chattel
Mortgage and all rights and powers granted or to be granted herein.

          SECTION 3.2 Recording. (A) The Mortgagor will bear the expense of and
be responsible for recording and re-recording, registering and re-registering
and filing and re-filing this Chattel Mortgage and each and every supplemental
chattel mortgage and such other financing statements or other instruments from
time to time as may be reasonably requested by the Mortgagee and provided to
Mortgagor in execution form in all such jurisdictions and offices as the
Mortgagee shall from time to time request in order that: (a) the Lien hereof as
a first priority lien on the Flight Equipment and on all of the other Mortgaged
Property, subject to Permitted Liens, (b) the security for the Obligations, and
(c) the rights and remedies of the Mortgagee, may be established, confirmed,
maintained and protected; and the Mortgagor will furnish upon request to the
Mortgagee evidence reasonably satisfactory to the Mortgagee of every such
recording, registering and filing which is not filed, recorded or registered by
Mortgagee. The foregoing includes, without limitation, the execution and
delivery by the Mortgagor of all documents reasonably necessary to perfect
Mortgagee's rights as secured party and Mortgagor's rights as lessor under the
Lease.

          (B) The Mortgagor hereby appoints Mortgagee as its irrevocable
attorney in fact (said agency coupled with an interest) to take all such action
and execute all such documents in Mortgagee's own name or in the name of the
Mortgagor that is necessary to carry out the purposes of Paragraph 3.2(A).

          SECTION 3.3 To Keep in Effect Authorizations; To Pay Taxes. (A) The
Mortgagor will obtain and maintain, or cause to be obtained or maintained, in
full force and effect, any authorization, approval, license, or consent of any
governmental or judicial authority, which may be or become necessary in order to
obtain the full benefits of this Chattel Mortgage and all rights and remedies
granted or to be granted herein, and will not create or suffer to exist any Lien
upon the Mortgaged Property or any part thereof or upon the income therefrom
other than Permitted Liens; and the Mortgagor will from

                                      -13-

<PAGE>

time to time pay or cause to be paid as they become due and payable all taxes,
assessments and governmental charges lawfully levied or assessed or imposed upon
the Lien of the Mortgagee so that the Lien of this Chattel Mortgage shall at all
times be wholly preserved at the cost of the Mortgagor and without expense to
the Mortgagee except to the extent being contested in good faith by appropriate
proceedings and adequate reserves for which are being maintained; and the
Mortgagor will not suffer any other matter or thing whatsoever whereby the Lien
of or security interest created by this Chattel Mortgage might be impaired in
any material respect.

          (B) With respect to Mortgagee's obligations under Section 3.3(A): (i)
to the extent the Lessee performs such obligation, such obligations shall be
deemed to have been performed; (ii) WTC shall have no obligation in its
individual capacity to perform any such obligation; and (iii) to the extent the
Lessee has not performed such obligation, Mortgagor shall perform such
obligation only to the extent instructed by an Owner Participant and shall
execute only such documents as shall have been provided to it in execution form.

          SECTION 3.4 Indemnification. The Mortgagor shall, or shall cause
Lessee to, assume liability for and indemnify, protect, save, and keep harmless
the Mortgagee, its officers, directors, agents, and employees from and against
any and all liabilities, losses, damages, taxes (excluding, however, any and all
taxes imposed upon or measured by the income of the Mortgagee), claims, actions,
suits, reasonable costs and expenses of whatsoever kind, including, without
limitation, reasonable legal fees and disbursements, imposed on, incurred by, or
asserted against the Mortgagee, its officers, directors, agents and employees in
any way relating to or arising out of the purchase, ownership, delivery,
possession, use, operation, condition, performance, quality, suitability,
airworthiness, maintenance, registration, loss, confiscation, seizure,
requisition, lease, sale, or other disposition of the Mortgaged Property or any
part thereof, or this Chattel Mortgage or any other Loan Document or any of the
instruments or agreements to be entered into by the parties pursuant hereto or
thereto.

          SECTION 3.5 To Maintain Flight Equipment. (A) The Mortgagor will at
all times maintain, preserve and keep, at its own cost and expense, all of the
Flight Equipment as from time to time constituted and every part thereof in good
order and repair (ordinary wear and tear excepted), in accordance with standards
of United States airlines engaged in international flights, in conformity with
FAA regulations and local aviation authority requirements, or will cause such
Mortgaged Property to be so maintained, preserved and kept, without cost or
expense under this Chattel Mortgage to the Mortgagee. The Mortgagor will from
time to time make, or cause to be made, all needed and proper repairs to the
Flight Equipment in order to comply with such standards

                                      -14-

<PAGE>

at a maintenance repair station approved by the FAA and acceptable to Mortgagee,
and obtain and maintain in full force and effect and in good order all licenses,
permits, certificates, registrations or other documents required by any
insurance policy or any governmental authority having jurisdiction regarding the
Flight Equipment. The Mortgagor will replace or will cause to be replaced,
without expense to the Mortgagee, all or any part of the Flight Equipment
(including, without limitation, any Engine) that may be retired (whether by
sale, expropriation, wearing out, loss or destruction or other cause), or may be
in any way rendered unfit for use, with replacement property of comparable
grade, quality and utility, which replacement property shall be in the same or
better serviceable condition by standards of the FAA as the unit so retired or
rendered unfit for use assuming such replaced property was maintained in
accordance with the provisions hereof and will, with respect to replacement
engines, execute and deliver to Mortgagee a Supplemental Chattel Mortgage and
such other documents as may be necessary to accord Mortgagee a first priority
Lien under this Chattel Mortgage with respect thereto (subject to Permitted
Liens) and to subject such replacement property to the Lien of this Chattel the
Mortgaged Property. The Mortgagor shall not cannibalize or part out any Aircraft
or any Engine, or attempt to do so.

          (B) Upon request of the Mortgagee made no more frequently than once
during every 12-month period during the Loan Term, the Mortgagor shall provide
to the Mortgagee an audit report prepared by the Mortgagor with respect to the
Flight Equipment, clearly specifying the replacement of major parts and/or
components of the Flight Equipment from that which existed on the date of this
Chattel Mortgage (as to the first such report) or as of the date of the
preceding audit report (as to each subsequent report), with respect to the
Flight Equipment. Such audit report shall also clearly note all parts and/or
components of the Flight Equipment, as then constituted, which constitute
leased, borrowed, loaned or exchanged parts and components. Thereafter, or at
any time requested by the Mortgagee, the Mortgagor shall execute, deliver,
and/or file at its own expense such Supplemental Chattel Mortgages reasonably
satisfactory in form and substance to the Mortgagee or such other instruments as
the Mortgagee may reasonably request in order to confirm or give further
assurance of the Lien hereof with respect to any item of property so used in
replacement and described in such report.

          (C) The Mortgagor will at all times comply or cause compliance with
all lawful orders, rules and regulations of governmental authorities having
jurisdiction with respect to any part of the Mortgaged Property the
noncompliance with which would have a material adverse effect on the condition
of any Flight Equipment, the business of Mortgagor or the perfection or priority
of this Chattel Mortgage or any of Mortgagee's rights or remedies under any Loan
Document. The Mortgagor will advise the Mortgagee of the receipt by the
Mortgagor of any notice from the Administrator of the FAA as to

                                      -15-

<PAGE>

any violation of or failure to comply with or any order, rule or regulation
thereof relating to the Flight Equipment. Mortgagor shall, at any time and from
time to time, at Mortgagee's request, promptly furnish to Mortgagee information
as to the maintenance status of the Flight Equipment in such detail as Mortgagee
shall reasonably require.

          (D) The provisions of Section 3.5(A) and (C) shall apply only during
either of the following times: (i) when the Lease or any Permitted Lease is no
longer in effect; or (ii) during the continuance of a Lease Event of Default
arising as a result of the Lessee's failure to comply with its obligations
thereunder regarding the maintenance of the Flight Equipment.

          (E) With respect to Mortgagee's obligations under Section 3.5(A), (B)
and (C): (i) to the extent the Lessee performs such obligations, such
obligations shall be deemed to have been performed; (ii) WTC shall have no
obligation in its individual capacity to perform any such obligation; and (iii)
to the extent the Lessee has not performed such obligation, Mortgagor shall
perform such obligation only to the extent instructed by an Owner Participant
and shall execute only such documents as shall have been provided to it in
execution form.

          SECTION 3.6 To Insure. The Mortgagor shall at all times procure and
maintain, or cause to be procured and maintained, on the Flight Equipment,
without liability and at no cost to the Mortgagee, policies of insurance in such
form, of such type and with insurers reasonably satisfactory to the Mortgagee.

          A. Proceeds. All proceeds of insurance upon any part of the Mortgaged
Property paid to the Mortgagee shall be held and paid over or applied by the
Mortgagee as provided in Section 2.1.

          B. Insurance under the Lease. Notwithstanding anything to the contrary
contained herein, during any time when any Lease or any Permitted Lease shall be
in effect, so long as the insurance provisions thereof are being complied with,
the obligations of the Mortgagor pursuant to the provisions of this Section 3.6
shall be deemed to be complied with; provided, however, that Mortgagor shall, in
any case, be obligated to maintain the amount of "All Risk" hull insurance in an
amount not less than the Flight Equipment's full commercial value but, in any
case, in an amount not less than the Mortgagor's full financial obligation with
respect to the Flight Equipment to Mortgagee under the Loan Agreement. For the
avoidance of doubt, if the amounts of "All Risk" hull insurance required to be
maintained under the Lease are not sufficient to satisfy the condition set forth
in the proviso of the immediately preceding sentence, the

                                      -16-

<PAGE>

Mortgagor shall maintain Total Loss Only Insurance or additional hull insurance
in an amount necessary to eliminate any shortfall in the amount of insurance
coverage.

          (C) With respect to Mortgagee's obligations under Section 3.6(A): (i)
to the extent the Lessee performs such obligations, such obligations shall be
deemed to have been performed; (ii) WTC shall have no obligation in its
individual capacity to perform any such obligation; and (iii) to the extent the
Lessee has not performed such obligation, Mortgagor shall perform such
obligation only to the extent instructed by an Owner Participant and shall
execute only such documents as shall have been provided to it in execution form.

          SECTION 3.7 Inspection by Mortgagee; Information. (A) The Mortgagor
will at all times maintain or cause to be maintained records adequate to
identify the Flight Equipment and to disclose its use, maintenance, condition
and the income generated to the Mortgagor through the use thereof. Mortgagor
shall, upon 24-hours' notice from Mortgagee, provide Mortgagee with all
information then available to Mortgagor regarding the location of the Mortgaged
Property. Mortgagor shall permit the Mortgagee or any representative designated
by Mortgagee: (a) at the times of the inspection referred to in clause (b) of
this sentence, to inspect the books of account, records, reports and other
papers of the Mortgagor related to the Mortgaged Property and to make copies and
extracts therefrom and Mortgagor will afford and procure a reasonable
opportunity to make any such inspection and the Mortgagor will furnish the
Mortgagee with any and all such other information and copies of documents and
print-outs of data related to the Mortgaged Property stored on any electronic or
data processing medium under the control of the Mortgagor as the Mortgagee may
reasonably request, with respect to any Mortgaged Property and the financial
records of the Mortgagor related to the Mortgaged Property and will permit
Mortgagee to discuss any of the foregoing with any officer or accountant of the
Mortgagor, all at such reasonable time and as often as may be reasonably
requested; and (b) subject to restrictions regarding non-interference with the
Lessee's operations contained in the Lease, (i) to inspect the Flight Equipment,
upon Mortgagee's reasonable request, once every 12 months during the Loan Term;
provided that Mortgagee shall provide not less than twenty (20) days prior
written notice of its intention to exercise (either by itself or by its
designate) such rights, and (ii) to inspect and appraise the Flight Equipment,
upon Mortgagee's reasonable request, at any time after the occurrence of an
Event of Default, or whenever there has been, in Mortgagee's reasonable
judgment, a material, adverse change in the condition of the Mortgaged Property
or in the financial condition of Mortgagor. All such inspections and appraisals
as are permitted in clause (b) of the previous sentence shall be at the
reasonable cost and expense of Mortgagor, shall be conducted by Mortgagee's
in-house technical representative or by an independent appraiser selected by
Mortgagee, in each case in the

                                      -17-

<PAGE>

presence of a representative of Mortgagor. Mortgagee may require, and Mortgagor
shall permit, subject to restrictions regarding non-interference with the
Lessee's operations contained in the Lease, the Flight Equipment to be inspected
and appraised by an appraiser selected by Mortgagee at any time, at Mortgagors's
sole cost and expense; provided, that, unless an Event of Default has occurred
and is continuing, neither the Mortgagor nor the Lessee shall be obligated to
pay the cost and expense of more that one appraisal in each year; and provided
further, that, if in the course of such inspection a breach of Mortgagor's or
Lessee's obligations regarding maintenance hereunder or under the Lease,
respectively, is discovered, then Mortgagor shall pay for the costs of all
follow-up inspections.

          (B) With respect to Mortgagee's obligations under Section 3.7(A): (i)
to the extent the Lessee performs such obligations, such obligations shall be
deemed to have been performed; (ii) WTC shall have no obligation in its
individual capacity to perform any such obligation; and (iii) to the extent the
Lessee has not performed such obligation, Mortgagor shall perform such
obligation only to the extent that the appropriate documentation is provided by
an Owner Participant and shall execute only such documents as shall have been
provided to it in execution form.

          SECTION 3.8 Citizenship, etc. The Mortgagor is as of the date hereof
and will at all times remain a citizen of the United States as defined in 49
U.S.C. (S) 40102(15).

          SECTION 3.9 Insignia. (A) The Mortgagor will plainly, distinctly and
conspicuously place and leave on the Airframe and each Engine, a plate, insignia
or other identification bearing the following words in letters of a size
reasonable under the circumstances and acceptable to the Mortgagee as follows:

          Owned by and Leased from Wilmington Trust Company, as Owner Trustee,
          as Lessor and Subject to a Perfected Security Interest in Favor of
          FINOVA Capital Corporation

or bearing such other words as may be required under the terms of the Lease.

          (B) With respect to Mortgagee's obligations under Section 3.9(A): (i)
to the extent the Lessee performs such obligations, such obligations shall be
deemed to have been performed; (ii) WTC shall have no obligation in its
individual capacity to perform any such obligation; and (iii) to the extent the
Lessee has not performed such obligation, Mortgagor shall perform such
obligation only to the extent instructed by an Owner Participant and shall
execute only such documents as shall have been provided to it in execution form.

                                      -18-

<PAGE>

          SECTION 3.10 Operation and Location of Mortgaged Property. (A) The
Mortgagor shall not operate the Flight Equipment or suffer the Flight Equipment
to be operated in violation of any provision of any insurance policy in effect
with respect to the Flight Equipment or in any jurisdiction where all of the
insurance required hereunder shall not remain in full force and effect or in
violation of any law, treaty, statute, rule, airworthiness directive, regulation
or order of any government or governmental authority (domestic or foreign)
having jurisdiction of the Mortgagee or the Flight Equipment or in violation of
any applicable airworthiness certificate, license or registration relating to
the Flight Equipment issued by any such government or governmental authority.

          (B) The provisions of Section 3.10(A) shall apply to the Aircraft only
during either of the following times: (i) when the Lease or any Permitted Lease
is no longer in effect; or (ii) during the continuance of a Lease Event of
Default arising as a result of the Lessee's failure to comply with its
obligations thereunder regarding the operation and location of the Flight
Equipment.

          (C) With respect to Mortgagee's obligations under Section 3.10(A): (i)
to the extent the Lessee performs such obligations, such obligations shall be
deemed to have been performed; (ii) WTC shall have no obligation in its
individual capacity to perform any such obligation; and (iii) to the extent the
Lessee has not performed such obligation, Mortgagor shall perform such
obligation only to the extent instructed by an Owner Participant and shall
execute only such documents as shall have been provided to it in execution form.

          (D) Indemnification by U.S. Government in Lieu of Insurance.
Notwithstanding the provisions of this Section 3.10 or any other provisions of
this Agreement requiring insurance, Mortgagee agrees to accept, in lieu of
insurance against any risk with respect to the Flight Equipment, indemnification
from, or insurance provided by, any agency or instrumentality of the United
States against such risk in an amount which, when added to the amount of
insurance against such risk maintained by the Mortgagor (or by Lessee or any
Sublessee) with respect to the Flight Equipment, shall be at least equal to the
amount of insurance against such risk otherwise required by this Agreement.

          SECTION 3.11 No Sale, Alteration or Modification. (A) Except as
expressly permitted in subsections 3.11(B) hereof or as permitted by the Lease,
Mortgagor shall not sell, lease, convey, transfer or encumber (other than with
Permitted Liens) or otherwise dispose of all or any part of the Mortgaged
Property or extend the duration of the Lease, or cause or permit another to do
any of the foregoing with respect to any of the Mortgaged Property, and shall
not, except any maintenance or

                                      -19-

<PAGE>

improvements to the Flight Equipment in connection with any sale or lease
thereof as permitted by the Loan Agreement, modify or cause or permit any
modification to any of the Flight Equipment that would have a material effect
upon the value of the Flight Equipment. Except as otherwise permitted by the
Lease, Mortgagor shall not make or cause to be made or cause or permit another
to make any change or alteration in any registration, filing, or recordation of
any of the Flight Equipment from the registration, filing, or recordation
required by this Chattel Mortgage, or consent to the Flight Equipment being
operated by pilots other than those currently certified by the appropriate
governmental authorities.

          (B) Notwithstanding anything to the contrary set forth in Section 3.11
(A) above, at any time and from time to time prior to expiration of the term of
the Lease, and provided that the Lease shall not have been declared in default
pursuant to the terms thereof, as to any Engine which the provisions of the
Lease permit to be replaced, the Mortgagor may direct the Mortgagee to execute
and deliver to or as directed in writing by the Mortgagor an appropriate
instrument releasing such Engine from the Lien of this Chattel Mortgage and the
Mortgagee shall execute and deliver such instrument as aforesaid, but only at
the cost and expense of the Mortgagor and only upon receipt by or deposit with
the Mortgagee of the following:

                    (i) a Mortgagor Request requesting such release and
          describing the Engine so to be released which shall be identified by
          the manufacturer's serial number;

                    (ii) proof reasonably satisfactory to Mortgagee that Lessee
          has complied with all of the requirements set forth in Section 10(b)
          of the Lease with respect to a replacement Engine;

                    (iii) Mortgagor shall deliver to the Mortgagee duplicate
          executed original counterparts of all of the instruments and documents
          delivered to Mortgagor as lessor under the Lease by Lessee in
          compliance with the provisions thereof with respect to a replaced
          Engine, and each executed counterpart of any Supplement thereto
          subjecting such replacement Engine to the Lease shall have affixed
          thereto the following legend:

               LESSOR HAS ASSIGNED TO FINOVA CAPITAL CORPORATION CERTAIN OF ITS
               RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE SUPPLEMENT. TO THE
               EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT

                                      -20-

<PAGE>

               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 FINOVA
               CAPITAL CORPORATION ON THE SIGNATURE PAGE THEREOF.

                    (iv) a Supplemental Chattel Mortgage subjecting such
          replacement Engine to the Lien hereof;

                    (v) in opinion or opinions of counsel to the Mortgagor or
          Lessee reasonably satisfactory to Mortgagee (which may be in-house
          counsel) that all such replacement property has been validly subjected
          to the Lien of this Chattel Mortgage and covered by the Lease as fully
          and to the same extent as if such replacement property were initially
          the subject of each thereof; and

                    (vi) an Officer's Certificate that Mortgagor will, after
          consummation of the transactions contemplated by this paragraph
          3.11(B) have good and marketable title to such replacement property
          free of all Liens whatsoever except the Permitted Liens.

          SECTION 3.12 As to the Lease Assigned Hereunder.

          (A) All consents necessary for the assignment to Mortgagee of
Mortgagor's right, title and interest in and to the Lease have been obtained and
delivered to Mortgagee.

          (B) The Lease is in full force and effect and no party thereunder is
in default in the performance of any obligation on its part to be performed
thereunder.

          (C) Mortgagor will not permit the Lease or any material provisions
thereof to be amended nor any of Mortgagor's material rights or the other
party's material obligations thereunder to be waived without the prior, written
consent of Mortgagee, which consent shall not unreasonably be withheld, and will
promptly send to Mortgagee all notices or demands which Mortgagor shall be
permitted or required to send to any

                                      -21-

<PAGE>

other party thereto under the provisions thereof or which Mortgagor receives
from such other party.

          (D) Mortgagor will not grant a security interest in, or assign its
rights under, or permit a Lien to attach to its rights under the Lease other
than the assignment and Lien granted and vested under this Chattel Mortgage and
Permitted Liens.

                                   ARTICLE IV

                                    REMEDIES

          SECTION 4.1 Event of Default. An Event of Default shall occur
hereunder if any event defined as an Event of Default on Schedule I hereto shall
occur.

          SECTION 4.2 Remedies. Upon the occurrence and continuance of any Event
of Default, the Mortgagee may, at its option, do one, several, or all of the
following, as the Mortgagee, in its sole discretion, shall then elect:

               (i) exercise all the rights and remedies granted to secured
          parties by the provisions of the New York Uniform Commercial Code
          (whether or not the Uniform Commercial Code is in effect in the same
          form in the jurisdiction where Mortgagee's rights and remedies are
          asserted) or under the provisions of any applicable law;

               (ii) accelerate the entire principal balance then due and owing
          under the Loan Agreement and this Chattel Mortgage, whereupon all such
          amounts, accrued interest thereon, and all other amounts due and owing
          hereunder and thereunder shall become immediately due and payable;

               (iii) institute legal proceedings to foreclose upon and against
          the security interest granted in and by this Chattel Mortgage and to
          recover judgment for all amounts then due as set forth in subparagraph
          (ii) of this Section 4.2;

               (iv) institute legal proceedings for the specific performance of
          any covenant or agreement herein contained or in the Loan Agreement or
          in aid of the execution of any power herein granted and Mortgagee
          shall be entitled as of right to the appointment of a receiver of all
          or any part of the Mortgaged Property;

                                      -22-

<PAGE>

               (v) institute legal proceedings for the sale or otherwise for the
          enforcement of any right, under the judgment of any court of competent
          jurisdiction, of or concerning any of the Mortgaged Property;

               (vi) personally, or by agents or attorneys, take possession of
          all or any part of the Mortgaged Property and demand, sue for, collect
          or receive any money or property at any time payable or receivable on
          account of or in exchange for, or make any compromise or settlement
          deemed desirable with respect to, any of the Mortgaged Property or any
          sum payable in connection therewith;

               (vii) to the extent permitted by law, enter any place where the
          Mortgaged Property may be found or where Mortgagee reasonably believes
          some or all thereof may be kept and personally, or by agents or
          attorneys, take possession of any part or all of the Mortgaged
          Property without being responsible for loss or damage caused thereby
          (other than gross negligence or willful misconduct), and sell or
          dispose of all or any part of the same, free from any and all claims
          of the Mortgagor or of any other party claiming by, through, or under
          the Mortgagor, at law or in equity, at one or more public or private
          sales; or

               (viii) exercise, to the exclusion of all third parties and the
          Mortgagor, all rights granted to the Mortgagor under the Lease.

          Notwithstanding anything to the contrary in this Section 4.2, so long
as Mortgagor is paying the amounts specified in the second paragraph of the
Repayment Schedule, Mortgagee shall not exercise any rights and remedies
hereunder or at law against any DC-9 Aircraft; provided that Mortgagee may, at
any and all times after the occurrence, and during the continuance of any Event
of Default, exercise any and all other rights and remedies hereunder and at law,
including accelerating the principal due under the Loan Agreement and any and
all remedies against the 747 Aircraft; and provided, further, that, in the event
an Event of Default occurs as a result of the failure of the Mortgagor to pay
any such amounts, Mortgagee may then exercise any and all rights and remedies
hereunder and at law against the DC-9 Aircraft, including, without limitation,
the right to repossess and sell such Aircraft.

          SECTION 4.3 Waiver of Bonds, etc. If Mortgagee seeks to take
possession of any or all of the Mortgaged Property or avail itself of any
provisional remedy by court process, the Mortgagor hereby irrevocably waives any
bonds and any surety or security required by any statute, court rule or
otherwise as an incident to such

                                      -23-

<PAGE>

possession or remedy, and waives any demand for possession of the Mortgaged
Property prior to the commencement of any suit or action to recover same.

          SECTION 4.4 Waiver of Appraisement. The Mortgagor agrees, to the full
extent that it may lawfully so agree, that neither it nor anyone claiming
through or under it will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force in any locality where any property subject to the Lien hereof may be
situated, in order to prevent, hinder or delay the enforcement or foreclosure of
this Chattel Mortgage, or the absolute sale of the Mortgaged Property or any
part thereof, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof; and the Mortgagor, for
itself and all who may at any time claim through or under it, hereby waives, to
the full extent that it may be lawful so to do, the benefit of all such laws,
and any and all right to have any of the properties or assets comprising the
Mortgaged Property marshaled upon any such sale, and agrees that the Mortgagee,
or any court having jurisdiction to foreclose the Lien hereof, may sell the
Mortgaged Property in its entirety or in such parcels as the Mortgagor may
determine.

          SECTION 4.5 Multiple Sales. The power of sale hereunder shall not be
exhausted by one or more sales, and the Mortgagee may from time to time adjourn
any sale to be made pursuant hereto. The Mortgaged Property need not be present
at the time and place of sale.

          SECTION 4.6 Delivery of Mortgaged Property. If the Mortgagee shall
demand possession of the Mortgaged Property or any part thereof pursuant to this
Chattel Mortgage, or any records, including print-outs of data stored on any
electronic or data processing medium, relating to the Mortgaged Property, the
Mortgagor shall, at its own expense, forthwith cause such Mortgaged Property or
any part thereof or any such records designated by the Mortgagee to be assembled
and made available and/or delivered to the Mortgagee at any place reasonably
designated by the Mortgagee in the United States.

          SECTION 4.7 Notices. In addition to any other notices required by law,
the Mortgagee shall give to Mortgagor at least twenty (20) days prior written
notice of each public sale or any date after which a private sale or other
intended disposition hereunder shall occur, and the Mortgagor hereby covenants
and agrees that a notice, which shall be sent in accordance with the provisions
of Section 7.1 hereof, at least twenty (20) days before the date of any such act
shall be deemed to be commercially reasonable notice for such act within the
meaning of Section 9-504 of the Uniform Commercial Code and, specifically,
reasonable notification of the time and place of any

                                      -24-

<PAGE>

public sale hereunder and reasonable notification of the time after which any
private sale or other intended disposition to be made hereunder is to be made.

          SECTION 4.8 Mortgagee Repairing and Managing Mortgaged Property. Upon
every such taking of possession, the Mortgagee may, but shall have no obligation
to, from time to time, at the expense of the Mortgagor, make all such repairs,
replacements, alterations, additions and improvements to and of the Mortgaged
Property as the Mortgagee may reasonably deem proper to protect its interests
hereunder. In each such case, the Mortgagee shall have the right to manage and
control the Mortgaged Property and to carry on the business and to exercise all
rights and powers of the Mortgagor in respect thereof as the Mortgagee shall
deem best, including the right to enter into any and all such agreements with
respect to the leasing and/or operation of the Mortgaged Property or any part
thereof as the Mortgagee may see fit; and the Mortgagee shall be entitled to
collect and receive all rents, issues, profits, revenues and other income of the
same and every part thereof. Such rents, issues, profits, revenues and other
income shall be applied to pay the expenses of holding and operating the
Mortgaged Property and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Mortgagee may be required or may elect to make,
if any, for taxes, assessments, insurance and other proper charges upon the
Mortgaged Property or any part thereof, and all other payments which the
Mortgagee may be required or authorized to make under any provision of this
Chattel Mortgage. The remainder of such rents, issues, profits, revenues and
other income shall be applied only in accordance with Section 4.10 hereof.

          SECTION 4.9 Delivery to Purchaser. Upon the completion of any sale
under this Article, the Mortgagor shall deliver all of the property sold to the
purchaser or purchasers at such sale on the date of sale, or within a reasonable
time thereafter if it shall be impractical to make immediate delivery, but in
any event full title and right of possession to such property shall pass to such
purchaser or purchasers forthwith upon the completion of such sale.
Nevertheless, if so requested by the Mortgagee or by any purchaser, the
Mortgagor shall confirm any such sale or transfer by executing and delivering to
such purchaser all proper instruments of conveyance and transfer and releases as
may be designated in any such request and provided in execution form.

          Every such sale shall operate to divest all right, title, interest,
claim and demand whatsoever of the Mortgagor and any person claiming such
interest by, through or under the Mortgagor, in and to the property so sold, and
shall be a perpetual bar, both at law and in equity, against the Mortgagor and
all such persons and their respective successors or assigns.

                                      -25-

<PAGE>

          SECTION 4.10 Application of Proceeds. The proceeds of any sale, rental
or other use of the Mortgaged Property, or any part thereof, under this Article,
together with any other sums then held by the Mortgagee, as part of the
Mortgaged Property, shall be applied as follows:

               A. First. To the payment of the costs and expenses of such sale
          and the exercise of Mortgagee's remedies hereunder, including brokers'
          fees or sales commissions, a reasonable compensation to the
          Mortgagee's agents, legal fees of Mortgagee's attorneys and counsel,
          and all other charges, expenses, liabilities and advances incurred or
          made by the Mortgagee in connection therewith, and to the payment of
          all taxes, assessments or Liens, if any, prior to the Lien of this
          Chattel Mortgage, except any taxes, assessments or Liens subject to
          which such sale shall have been made;

               B. Second. To the payment of amounts outstanding under the Loan
          Agreement; and

               C. Third. Any remaining surplus shall be paid to Mortgagor.

          SECTION 4.11 Mortgagee May Purchase. At any public sale under this
Article, to the extent permitted by applicable law the Mortgagee or its nominee
may bid for and purchase the property offered for sale, and, upon compliance
with the terms of sale, may hold, retain and dispose of such property without
further accountability therefor. Mortgagee need not be present at such sale. For
the purpose of making payment for the Mortgaged Property or any part thereof so
purchased, any claim for any amounts owing under the Note, the Loan Agreement or
hereunder may be used by Mortgagee as a credit against the purchase price.

          SECTION 4.12 Right to Possession. The right of the Mortgagee to take
possession of and sell or operate and manage the Mortgaged Property in
compliance with the provisions of this Chattel Mortgage shall not be adversely
affected by the provisions of the Federal Bankruptcy Code as at any time amended
or of any provision of any succeeding act to the same effect.

          SECTION 4.13 Remedies Cumulative, etc. (A) Each right, power, and
remedy specifically given to the Mortgagee herein, or otherwise existing shall
be cumulative and shall be in addition to every other right, power, and remedy
specifically given herein, or in the Loan Agreement or now or hereafter existing
at law, in equity, or otherwise; and each right, power and remedy, whether
specifically given herein or under the Loan Agreement or otherwise existing, may
be exercised from time to time and as

                                      -26-

<PAGE>

often and in such order as may be deemed expedient by the Mortgagee; and the
exercise of any right, 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.

          (B) No delay or omission by the Mortgagee in the exercise of any right
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
Mortgagor or to be an acquiescence therein.

          (C) No waiver by the Mortgagee of any breach or Default or Event of
Default by the Mortgagor under this Chattel Mortgage shall be deemed a waiver of
any other previous breach or default or any thereafter occurring.

          (D) The invalidity of any remedy in any jurisdiction shall not
invalidate such remedy in any other jurisdiction. The invalidity or
unenforceability of any of the remedies herein provided in any jurisdiction
shall not in any way affect the right to the enforcement in such jurisdiction or
elsewhere of any of the other remedies herein provided.

          SECTION 4.14 Mortgagee's Right to Perform and Incur Expenses. At any
time and from time to time after an Event of Default has occurred, if the
Mortgagor fails to perform or fulfill or is not the performing or fulfilling any
of its undertakings or obligations contained herein, Mortgagee shall have the
right, but shall not be obligated: (i) to effect such performance or compliance
and (ii) to incur such expenses relative thereto or to the enforcement of
Mortgagee's rights as against, or the preservation, protection, reconditioning,
storage or sale of, the Mortgaged Property including, but without limitation,
such sums as are specified in Section 4.8 and 4.10 FIRST hereof. The amount of
any such expenses and other reasonable costs of Mortgagee incurred as
hereinabove provided shall become payable by the Mortgagor to the Mortgagee as
of the date on which Mortgagee shall pay the same, together with interest
thereon from said date of payment at the rate of 2% over the Interest Rate
specified in the Note (but in no event higher than the highest rate permitted by
applicable law), until the same shall be repaid.

          SECTION 4.15 Advances Are Secured. All such costs and expenses
incurred shall become part of the Mortgagor's obligations and shall become part
of the indebtedness secured under this Chattel Mortgage. The Mortgagee shall
have the right (but shall not be obligated) to use and apply any Cash Collateral
at any time held by it for the repayment of all such advances, costs or
expenses. However, no such use of any Cash Collateral, nor the making by
Mortgagee of any advance in payment of any such expense,

                                      -27-

<PAGE>

shall relieve the Mortgagor from any Default hereunder or violate any provision
of the Lease.

          SECTION 4.16 Agency. The Mortgagor hereby appoints Mortgagee, such
appointment being immediately and without further notice or action effective
upon the occurrence of an Event of Default, as the Mortgagor's irrevocable
attorney-in-fact and agent (such appointment being coupled with an interest)
either in the Mortgagee's own name or in the name of the Mortgagor, to (i) incur
and to pay the costs and expenses aforesaid; (ii) make claim for, collect,
compromise and bring suit in respect of all claims relating to the Mortgaged
Property; (iii) execute and endorse all documents, checks or drafts received in
payment of any and all such expenses or any losses or damages under any
insurance policies maintained with respect to any Mortgaged Property; (iv)
execute financing statements in the Mortgagor's name as debtor; and (v) take any
action which the Mortgagor could take as owner of the Flight Equipment in and of
the realization by the Mortgagee of any of its rights and remedies herein
provided, including without limitation, action which the Mortgagor could take as
lessor under the Lease.

                                    ARTICLE V

                                   DEFEASANCE

          SECTION 5.1 Payment of Indebtedness; Satisfaction. If the Mortgagor
shall pay and discharge all of the Obligations then, upon Mortgagor Request,
this Chattel Mortgage and the Lien, rights and interests in all the Collateral,
hereby granted shall cease, terminate and become null and void, and the
Mortgagee shall execute and deliver to the Mortgagor such instruments of
satisfaction and discharge of this Chattel Mortgage, and the Lien hereof, as may
be reasonably requested by Mortgagor, and, pay and deliver upon Mortgagor Order
all monies and other personal property then held as collateral security (but
excluding any monies received by Mortgagee in payment of the Obligations) by the
Mortgagee hereunder. All such instruments and documents of release or discharge
shall be prepared and filed at the sole cost and expense of Mortgagor and shall
be reasonably satisfactory in form and substance to the Mortgagee.

                                      -28-

<PAGE>

                                   ARTICLE VI

                                SUNDRY PROVISIONS

          SECTION 6.1 Notices. Except as otherwise specifically provided to the
contrary herein:

          A. Every notice or demand under this Chattel Mortgage required or
permitted to be given by the Mortgagee or the Mortgagor shall be in writing and
may be given or made by recognized overnight international courier or registered
mail, return receipt requested.

          B. Every notice or demand shall be sent, in the case of a notice sent
by recognized overnight international courier, to the Mortgagee or to the
Mortgagor at their respective address set out in the preamble hereof.

          C. Every notice or demand shall, except so far as otherwise expressly
provided by this Chattel Mortgage, be deemed to have been received, in the case
of a notice sent by recognized overnight international courier letter, when
actually delivered to Mortgagee or the Mortgagor at their respective addresses
referred to in Section 6.1B, or as of the date on which receipt of such notice
is refused or the courier advises that such notice is not deliverable at such
address with respect to the Mortgagee or Mortgagor, as the case may be.

          D. Subject to the terms hereof, Mortgagee or the Mortgagor may change
its address by giving notice in accordance with this Section 6.1.

          SECTION 6.2 Counterparts. This Chattel Mortgage may be executed in any
number of counterparts, and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same Chattel Mortgage.

          SECTION 6.3 Governing Law; Consent to Jurisdiction. This Chattel
Mortgage shall be deemed to have been made in and shall be governed and
interpreted by the laws of the State of Arizona with respect to agreements made
by residents of the State of Arizona and to be wholly performed within said
state and the rights and remedies of the parties hereunder shall be determined
in accordance with such laws, except to the extent that the law of some other
jurisdiction may be mandatorily applicable to proceedings taken for the
enforcement of the rights of the Mortgagee hereunder; provided, however, that
any remedies herein provided which shall be valid under the laws

                                      -29-

<PAGE>

of the jurisdiction where proceedings for the enforcement hereof shall be taken
shall not be affected by any invalidity thereof under the laws of the State of
Arizona. If any provision of this Chattel Mortgage or of any other agreement
between the parties hereto shall be held invalid or inapplicable to any
circumstance or in any jurisdiction, such invalidity or inapplicability shall
not affect any other provision hereof or of any other agreement between the
parties hereto which can be given effect without regard to the invalid
provision, nor to the same provision to the extent valid or enforceable in any
other applicable jurisdiction, nor shall any such inapplicability to any
circumstance affect the applicability of such terms to any other or different or
subsequent circumstance, all of such terms, conditions or provisions are deemed
severable. Each party hereby agrees that all actions or proceedings initiated by
Mortgagor and arising directly or indirectly out of this Chattel Mortgage may be
litigated in the Superior Court of Arizona, Maricopa County, or the United
States District Court for the District of Arizona and that any action or
proceeding initiated by Mortgagee and arising directly or indirectly out of this
Chattel Mortgage may be litigated in either such jurisdiction or in any
jurisdiction in which the Aircraft, Mortgagor or any of its assets may be
located. Each party hereby expressly submits and consents in advance to such
jurisdiction and venue in any action or proceeding commenced by either party in
any of such courts, and hereby waives personal service of the summons and
complaint, or other process of papers issued therein, and agrees that such
service of the summons and complaint may be made by registered mail, return
receipt requested, addressed to either party, at the respective addresses set
forth in Section 6.1 hereof. Each party waives any claim that Phoenix, Arizona
or the District of Arizona or any such other jurisdiction is an inconvenient
forum or an improper forum based on lack of venue. Should either party, after
being so served, fail to appear or answer any summons, complaint, process or
paper so served within 30 days after the mailing thereof, each party
acknowledges that as a result thereof, an order and/or judgment may be entered
by either party against the other as demanded or pleaded for in such summons,
complaint, process or papers. The choice of forum set forth herein shall not be
deemed to preclude the enforcement by either party of any judgment in any other
appropriate jurisdiction.

          SECTION 6.4 Captions and Paragraph Headings. In construing any
provision of this Chattel Mortgage, no account shall be taken of the identity of
the party who prepared this Chattel Mortgage and no presumption shall arise as a
result thereof. Captions and paragraph headings used herein are for convenience
only and are not part of this Chattel Mortgage and shall not be used in
construing it.

          SECTION 6.5 Delivery. This Chattel Mortgage is intended to and shall
be deemed to be delivered by the Mortgagor to the Mortgagee and accepted by the
Mortgagee in Arizona.

                                      -30-

<PAGE>

          SECTION 6.6 Limitation of Personal Liability of WTC. Each of the
representations, undertakings and agreements herein or in the Loan Agreement or
other Loan Documents stated to be those of the Mortgagor are not personal
representations, undertakings and agreements of WTC but are binding only on the
Trust Estate and the Mortgagor as trustee thereof, and except as to
representations, undertakings or agreements herein or in the other Transaction
Documents which are expressly stated to be those of WTC, nothing herein
contained shall be construed as creating any personal liability of WTC or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director of, WTC, any such liability being expressly
waived by the other parties on their own behalf and on behalf of any Persons
claiming through or under them; provided, however, that nothing in this Section
6.6 shall be deemed to limit in scope or substance the personal liability of WTC
(a) to the Owner Participant as expressly set forth in the Trust Agreement, (b)
in respect of the representations, warranties and agreements of WTC expressly
made as such herein or in any other Transaction Document to which it is a party,
and (c) for the consequences of its own gross negligence, willful misconduct,
and, in receiving, handling or remitting of funds only, its simple negligence.

                                      -31-

<PAGE>

          IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have caused this
First Priority Chattel Mortgage and Security Agreement to be duly executed as of
the day and year first above written.

FINOVA CAPITAL CORPORATION              WILMINGTON TRUST COMPANY,
                                        not in its individual capacity, but
                                        solely as Owner Trustee

By: /s/ Ann L. Halton                  By: /s/ David A. Vanaskey, Jr.
    -----------------------                 ------------------------------------
    /s/ Ann L. Halton

Title: Vice President                   Title: DAVID A. VANASKEY, JR.
      ---------------------                    ---------------------------------
                                               Senior Financial Services officer

<PAGE>

                                   SCHEDULE I

                                EVENTS OF DEFAULT

          The Mortgagor shall be in default immediately and without further
notice beyond that specifically set forth below upon the occurrence of any of
the following, each of which is referred to as a Default or, after the
applicable notice period, an Event of Default:

          1. Failure of Mortgagor to pay when due and payable any principal of
or interest on or other sum with respect to the Loan, the Note or Chattel
Mortgage or other sums which may become due hereunder or under any Loan
Document, whether by reason of stated maturity or due date, notice of
prepayment, cancellation, acceleration or otherwise, and, in the case of
payments of principal and interest, such sum is not fully paid within five
Banking Days' of the date due, and in the case of all other payments, such sum
is not fully paid within five (5) Banking Days after notice to Mortgagor of
non-payment;

          2. (a) Any lapse of, or failure to maintain, insurance coverage on the
Aircraft required to be maintained under this Chattel Mortgage or any failure of
Mortgagor to perform its obligations set forth in Paragraphs 10.1(g), (h) or (i)
of the Loan Agreement or failure of any Owner Participant to perform its
respective obligations set forth in Paragraphs 10.2(d) or (h) of the Loan
Agreement or to attempt to cannibalize or part-out any Aircraft or any failure
of Lessee to commence the maintenance of the Aircraft and refurbishment of the
Engines in accordance with Schedule I to the Lease, or, upon 30 days written
notice to Mortgagee, within 60 days after such scheduled date, or such later
date to which Mortgagee may agree in its sole discretion;

               (b) Any failure by Mortgagor to perform or cause to be performed
its obligations as set forth in this Chattel Mortgage concerning (i) the
preparation or recordation of any document or instrument required by Mortgagee
for the maintenance or perfection of any lien on the Mortgaged Property, or (ii)
maintenance of the Flight Equipment, within five (5) Banking Days after notice
thereof from the Mortgagee; or

               (c) Any failure by the Mortgagor, Guarantor or any Owner
Participant to fulfill any other covenant or to perform any other obligation on
its part to be performed under any Loan Document to which it is a party, any
failure by Guarantor to remove or cure any material tax liens or other material
liens revealed by the searches

                                      -33-

<PAGE>

referred to in Section 5.1(r) hereof and any failure of any Owner Participant to
provide direction to the Mortgagor in those instances in the Loan Documents in
which Mortgagor will take action only upon the direction of an Owner Participant
failure is not cured within thirty days after such failure shall have first
occurred;

          3. Any representation or warranty made by any party in the Loan
Agreement or any other Loan Document or any financial statement shall prove to
have been untrue, inaccurate or incomplete in any material respect at the time
when made or when effective and such party fails to do that which shall be
necessary in order that said representation or warranty shall be true, accurate
or complete within thirty days after earlier of actual knowledge thereof or of
receipt of notice thereof;

          4. Any approval required from or to be issued by the Mortgagor or any
Owner Participant in connection with the Loan Agreement or under any Loan
Document or the transactions contemplated herein or therein, shall be revoked,
rescinded, suspended or otherwise limited in effect and same shall not have been
reinstated within ten (10) days after the first effective date of such
revocation, rescission, suspension or limitation;

          5. Mortgagor or any Owner Participant shall file a voluntary petition
in bankruptcy or a voluntary petition or an answer seeking readjustment of its
debts or for any other relief under any bankruptcy, insolvency, or other similar
act or law of any jurisdiction, domestic or foreign, now or hereafter existing,
or any action by Mortgagor or any Owner Participant indicating its consent to,
approval of, or acquiescence in, any such petition or proceeding; or if
Mortgagor or any Owner Participant shall apply or sustain the appointment by
consent or acquiescence of, a receiver or trustee for Mortgagor or any Owner
Participant or for all or a substantial part of its property; or if Mortgagor or
any Owner Participant shall make an assignment for the benefit of its creditors,
or if Mortgagor or any Owner Participant shall fail to pay or becomes unable to
pay its debts as they mature;

          6. An involuntary petition against Mortgagor or any Owner Participant
in bankruptcy or seeking readjustment of its debts or for any other relief under
any bankruptcy, insolvency, or other similar act or law of any jurisdiction,
domestic or foreign, now or hereafter existing; or a receiver or trustee shall
be involuntarily appointed for Mortgagor or any Owner Participant or for all or
a substantial part of its property; or a warrant of attachment, execution or
similar process against any substantial part of the property of Mortgagor or any
Owner Participant shall be served on Mortgagor or any Owner Participant and any
of such events continues for sixty (60) days undismissed, unbonded or
undischarged;

                                      -34-

<PAGE>

          7. The Loan Agreement or any Loan Document shall at any time after its
respective execution and delivery and for any reason cease to be in full force
and effect or any certificate, instrument or documents issued and executed
pursuant hereto or thereto shall for any reason cease to be effective to
constitute a valid and perfected first priority Lien and security interest in
and to the Collateral, except for Permitted Liens;

          8. The Aircraft or any part thereof shall be sold, transferred,
assigned, leased or otherwise disposed of by Mortgagor without Mortgagee's prior
written consent, except for Permitted Liens and except to the extent the Loan,
interest thereon and all other amounts due hereunder are paid in full;

          9. A Lease Event of Default shall occur and be continuing (other than
with respect to the payment of Rent in respect of the DC-9 Aircraft which
Borrower causes Lessee to pay in order to retain quiet enjoyment to the DC-9
Aircraft in accordance with the second paragraph of the Repayment Schedule
attached to the Loan Agreement).

          If Mortgagee shall be prevented by any order or any court or by
operation of any law from sending any notice permitted or required to commence a
period during which Mortgagor may cure any Event of Default hereunder, then the
period during which Mortgagor may cure such Event of Default shall commence to
run without notice on the first date on which Mortgagee would have been entitled
to give such notice but for the effectiveness of such order or law.

                                      -35-

<PAGE>

                                   SCHEDULE II

                                     FORM OF
                          SUPPLEMENTAL CHATTEL MORTGAGE

          THIS SUPPLEMENTAL CHATTEL MORTGAGE dated             , 19   from
                                                   ------------    --
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity, but solely as Owner Trustee, having its chief executive office and
principal place of business at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890 (hereinafter called the "Mortgagor"), as Mortgagor,
to FINOVA CAPITAL CORPORATION, a Delaware corporation, having its chief
executive office and principal place of business at 1850 North Central Avenue,
Phoenix, Arizona 85004 (hereinafter called the "Mortgagee"), as Mortgagee.

          WHEREAS, the Mortgagor has heretofore executed and delivered to the
Mortgagee a First Priority Chattel Mortgage and Security Agreement dated May
   ,1997 (hereinafter, as at any time supplemented or amended, called the
---
"Original Mortgage," terms defined therein, unless otherwise defined herein,
being used herein as therein defined), covering certain Flight Equipment of the
Mortgagor, to secure its Obligations, as defined in the Original Mortgage;

          WHEREAS, the Mortgagor is the legal and beneficial owner, free and
clear of all mortgages, security interests, Liens, charges and encumbrances,
other than the Lien of the Original Mortgage and Liens permitted by the Original
Mortgage, of the additional flight equipment hereinbelow described, and desires
to execute and deliver this Supplemental Chattel Mortgage.

          NOW, THEREFORE, THIS INSTRUMENT WITNESSETH that to secure the
Obligations and for the purpose of specifically subjecting such property to, and
of confirming, the Lien of the Original Mortgage, the Mortgagor does hereby
grant, bargain, sell, transfer, convey and mortgage unto the Mortgagee, its
successors and assigns, and gives to the Mortgagee a security interest in, the
following described property, to wit:

                                      -36-

<PAGE>

                                    AIRFRAME

     __ ( ) Airframe, identified as follows:

                               FAA           Manufacturer's
Manufacturer   Model   Registration Number   Serial Number
------------   -----   -------------------   --------------

together with all aircraft engines, appliances, equipment, jet fuel, instruments
and accessories (including, without limitation, radio and radar), whether now
owned or hereafter acquired from time to time thereto belonging, owned by the
Mortgagor and installed in or appurtenant to said airframe.

                                AIRCRAFT ENGINES

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

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

together with all equipment and accessories thereto belonging, by whomsoever
manufactured, owned by the Mortgagor and installed in or appurtenant to said
aircraft engines.

          Together with all substitutions, replacements and renewals of the
property above described, and all property which shall hereafter become
physically attached to or incorporated in the property above described, whether
the same are now owned by the Mortgagor or shall hereafter be acquired by it.

                                      -37-

<PAGE>

          Together with all rents, issues, profits, proceeds (including
insurance proceeds) revenues and other income of such property, except for the
Letter of Credit (as defined in the Lease) and the Excluded Amounts, and all of
the estate, right, title and interest of every nature whatsoever of the
Mortgagor, at law or in equity, in and to such property and every part and
parcel thereof.

EXCLUDING, HOWEVER, IN ALL CASES, EXCLUDED AMOUNTS.

          TO HAVE AND TO HOLD all and singular the property aforesaid unto the
Mortgagee, its successors and assigns, as security as aforesaid and for the uses
and purposes and subject to the covenants, agreements, provisions and conditions
set forth in the Original Mortgage.

          This instrument shall be construed as supplemental to the Original
Mortgage and shall form a part thereof, and the Original Mortgage and each
Supplemental Chattel Mortgage heretofore executed and delivered, which are
hereby, by reference, incorporated herein, are hereby ratified, approved and
confirmed.

          This instrument may be simultaneously executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same Supplemental Chattel
Mortgage.

          This Supplemental Chattel Mortgage is intended to be and shall be
deemed to be delivered by the Mortgagor to the Mortgagee and accepted by the
Mortgagee in Phoenix, Arizona.

          This instrument shall be effective on the date hereof.

                                      -38-

<PAGE>

          IN WITNESS WHEREOF, the Mortgagor has caused this instrument to be
duly executed.

                                        WILMINGTON TRUST COMPANY,
                                        not in its individual capacity but
                                        solely as Owner Trustee

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

                                      -39-<PAGE>

                                                                   EXHIBIT 10.31
--------------------------------------------------------------------------------

                                 LOAN AGREEMENT

                                   dated as of

                                 August 22, 1997

                                 by and between

                     EVERGREEN INTERNATIONAL AIRLINES, INC.

                                       and

                             UT FINANCE CORPORATION

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

<PAGE>

                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT, by and between EVERGREEN INTERNATIONAL AIRLINES, INC.,
an Oregon corporation (the "Borrower"), and UT FINANCE CORPORATION, a Delaware
corporation (the "Lender"), is dated as of August 22, 1997.

     WHEREAS, the Borrower operates a fleet of 747 aircraft which are powered by
Pratt & Whitney JT9D-7 engines (the "Engines"); and

     WHEREAS, the Borrower has entered into that certain JT9D-7 Series Engine
Maintenance Service Agreement dated as of August 22, 1997 (the "Overhaul
Agreement") with United Technologies Corporation, a Delaware corporation acting
through its Pratt & Whitney Group, P&W Eagle Services ("PWES"), pursuant to
which PWES has agreed to overhaul up to twenty five (25) of the Engines; and

     WHEREAS, pursuant to the Overhaul Agreement, the Borrower is required to
have paid to PWES, in respect of each Engine, an amount equal at least to twelve
and one-half percent 12.5% of the estimated cost of the work to be performed on
that Engine on or prior to the date that such overhaul work is completed;

     WHEREAS, the Borrower has requested that the Lender provide financing to
Borrower in order to finance that portion of the amount due to PWES under the
Overhaul Agreement in respect of each Engine that is not required to be paid
prior to the date that such overhaul work is completed; and

     WHEREAS, the Borrower is a wholly-owned affiliate of Evergreen
International Aviation, Inc., an Oregon corporation (the "Guarantor"), and the
Guarantor is willing to guarantee the obligations of the Borrower hereunder,
under the Note and under the Other Note (as hereinafter defined); and

     WHEREAS, the Lender is willing to provide the requested financing on the
terms and subject to the conditions set forth in this Agreement.

     NOW THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and other good and valuable
consideration, the parties hereto agree as follows:

                                       2

<PAGE>

SECTION 1. DEFINITIONS.

     For the purposes of this Agreement, the terms defined in this Section shall
have the meanings set out below (capitalized terms not defined in this Section 1
shall have the meanings ascribed to them in other parts of this Agreement):

     "Borrower Obligation" means any obligation of the borrower (a) to pay to
     the Lender the principal of and interest on the Note; and (b) to pay,
     satisfy, or perform any other obligation to the Lender arising under this
     Agreement, including, without limitation, all costs and expenses and
     reasonable attorneys' fees incurred by the Lender for the protection,
     preservation, or enforcement of its rights and remedies arising under this
     Agreement, the Note or the Other Note.

     "Business Day" means any day other than a Saturday, Sunday, or other day on
     which commercial banks in New York City, or Hartford, Connecticut are
     authorized by law to close.

     "Chase Credit Agreement" means that certain Credit Agreement dated as of
     May 7, 1997 among the Guarantor, Evergreen Holdings, Inc., The Chase
     Manhattan Bank, and the Subsidiary Borrowers and the Evergreen Lenders
     named therein.

     "Chase Participation Agreement" means that certain Participation Agreement
     dated as of May 7, 1997 among the Borrower, the Guarantor, Evergreen
     Holdings, Inc., The Chase Manhattan Bank, Boomer Air, Inc., and First
     Security Bank, National Association, as Owner Trustee.

     "GAAP" means generally accepted United States accounting principles
     consistently applied.

SECTION 2. AMOUNT AND TERMS OF LOAN.

     2.1 (a) Loan; Use of Loan Proceeds. Subject to the terms and conditions of
this Agreement, the Lender agrees to make a series of loans (each being a
"Loan") to the Borrower as Engine overhauls performed by PWES under the Overhaul
Agreement are completed. Only one Loan shall be made in respect of each Engine.
The proceeds of each Loan shall be provided at a closing (each a "Closing") to
be held in respect of each Engine, and each Closing shall be hold on the date
that the overhaul for each Engine is completed and the Engine has been accepted
by, and is ready to be shipped to, Borrower (each a "Closing Date"). The
proceeds of the Loan shall be used exclusively to pay PWES under the Overhaul
Agreement for the overhaul work on the Engine for which the Loan is being
provided, and shall be paid by the Lender directly to PWES. The Lender shall not
be obligated to provide any of the Loans unless all of the conditions precedent
contained herein shall have been met on and as of each Closing Date. Nothing
contained herein shall; (i) relieve the Borrower of its obligation to pay any
and all amounts due to PWES under the Overhaul Agreement, or (ii) obligate PWES
to deliver any engine to the Borrower until it has been paid in full for the
overhaul work on that Engine.

                                       3

<PAGE>

          (b)  Calculation of Loan Amount.

               (i) Pursuant to the Section 9.1 of the Overhaul Agreement, PWES
is obligated: (A) to provide the Borrower with an estimate of the cost of the
overhaul of each Engine (the "Estimated Cost") after each Engine is delivered to
PWES's facility and (B) thereafter to provide the Borrower a partial invoice ten
days prior to the forecasted engine ship date reflecting the actual cost of the
overhaul through such date and containing an estimate of the remaining costs to
be incurred (the "Partial Invoice Amount"). The Borrower is obligated, pursuant
to Section 9.3 of the Overhaul Agreement: (I) to pay $100,000 upon Engine
induction and thereafter to pay 4.2% of the value of the Estimated Cost of each
Engine to PWES, monthly, in advance, until the Engine overhaul is complete, and
(II) to pay the greater of (x) the remaining balance of the Estimated Cost of
each Engine or (y) the Partial Invoice amount (less payments actually made in
respect of such Engine to the extent not reflected in the Partial Invoice) on
the applicable Closing Date (the "Engine Release Amount"). The Loan in respect
of each Engine shall be in an amount equal to the Engine Release Amount;
provided, however, that the total amount of each Loan shall not exceed eighty
seven and one half percent (87.5%) of the applicable Estimated Cost (unless the
Partial Invoice Amount is greater than the Estimated Cost, in which event such
Loan may exceed such limit by the amount by which the Partial Invoice Amount
exceeds the Estimated Cost). The Loan amount in respect of any Engine may
include the value of any payments suspended by Borrower pursuant to Section 7.5
of the Overhaul Agreement with respect to such Engine; provided, however, that
the limitation concerning the maximum amount of each Loan contained in the
immediately preceding sentence shall apply in such event.

               (ii) Pursuant to the Overhaul Agreement, PWES is obligated to
provide the Borrower with a final calculation of the cost of the overhaul of
each Engine (the "Final Cost") after the Closing Date for such Engine. In the
event that the Engine Release Amount with respect to any Engine exceeds the
Final Cost of the overhaul for that Engine, then the amount of such excess shall
be deducted from the principal amount of the Loan for such Engine, and an
appropriate notation shall be made on the Grid (as hereinafter defined) for such
Engine. Conversely, in the event that the Final Cost with respect to any Engine
exceeds the Engine Release Amount for that Engine, then the amount of such
excess shall be added to the principal amount of each Loan for such Engine, and
an appropriate notation shall be made on the Grid (as hereinafter defined) for
such Engine. The principal amount of the Note shall be increased or decreased
pursuant to this Section 2.1(b)(ii) as of the date that the notation is made on
the applicable Grid (as hereinafter defined), and the remaining principal
payments relating to such Grid (as hereinafter defined) shall be adjusted
accordingly. Additionally, in the event PWES issues any additional invoices in
respect of an Engine after the Final Cost has been determined, then the value of
any such invoice shall be added to the principal balance on the Grid relating to
such Engine.

               (iii) The Borrower hereby agrees that any amount due from any
affiliate of the Lender to any affiliate of the Borrower (an "affiliate
Obligation") on any Closing Date shall be subtracted from the Loan being
provided to the Borrower on such

                                       4

<PAGE>

Closing Date, and thereupon such Affiliate Obligation shall be deemed satisfied.
The parties further agree that, with respect to Affiliate Obligations arising
after the final Closing Date, the value of such Affiliate Obligations may be
discharged by reducing the principal balance of each such Grid at such point by
the value of the quotient determined by dividing the value of any such Affiliate
Obligations by the number of Grids.

     2.2 Interest. Each Loan shall bear interest at a rate of interest equal to
the prime lending rate of Citibank, N.A., New York, New York in effect from time
to time plus one and one-half percent 1.5%) (the "Interest Rate"). The Interest
Rate shall be computed on the basis of a 36O-days year and actual number of days
elapsed. The Note shall bear interest on any overdue principal and, to the
maximum extent permitted by applicable law, on any overdue interest, at the
Interest Rate plus two percent (2%). Interest shall be payable in respect of
each Loan monthly in arrears on each Payment Date (as hereinafter defined) in
respect of the entire principal outstanding as of such Payment Date (as
hereinafter defined). The Lender shall determine the Interest Rate in effect
for each period, shall calculate the interest due two days prior to each
Payment Date, and shall promptly notify the Borrower of such calculation.

     2.3 Promissory Note. All of the Loans shall be evidenced by a single
promissory note (the "Note") substantially in the form of Exhibit I hereto. The
Note shall have attached to it a series of grids (each a "Grid"), one Grid for
each Loan corresponding to the Engine on which the overhaul work under the
Overhaul Agreement was (or will be) completed. Each Grid shall be created and
administered by the Lender, and all notations made thereon by the Lender shall
be binding on the Borrower absent manifest error. Each Grid and the notations
thereon may be computer generated, in the option of the Lender. A copy of each
Grid shall be provided to the Borrower as notations are made thereon by the
Lender. The value of each Loan shall be noted on the applicable grid on each
Closing Date and shall be in the amount of the principal amount of the Loan then
being advanced to the Borrower. All interest accrued, all payments of principal
and interest, a running balance, and adjustments, if any, required by Section
2.1(b)(ii) hereof shall be noted on each Grid as and when such obligations,
payments or adjustments are incurred or made.

     2.4  Payments.

          (a) Payments. The principal amount of each Loan shall be repaid in
twenty-one (or less, if the provisions of the last sentence of this Section
2.4(a) apply) consecutive and equal monthly installments of principal plus
accrued interest. Payments shall be made on the fifteenth calendar day of each
month (each a "Payment Date"), commencing with the first such date following the
Closing Date. In respect of each Loan, the Borrower shall pay, on the
twenty-first Payment Date after its Closing Date (a "Final Payment Date"), all
remaining amounts due under the Note for such Loan, including interest and
overdue interest, if any. If any Payment Date is not a Business Day, then such
payment shall be made on the next succeeding day which is a Business Day.
Notwithstanding the reference to the twenty-one Payment Dates for each Grid
described above, in the event that the Borrower makes more than three monthly
payments (or, but for Section 7.5 of the Overhaul Agreement, would have made
three monthly payments) to PWES under the Overhaul Agreement before the proceeds
of the

                                       5

<PAGE>

Loan with respect to such Engine are disbursed hereunder, then in such event
the number of Payment Dates shall be reduced by the number of such additional
payments made by the Borrower to PWES (or, but for Section 7.5 of the Overhaul
Agreement, would have been made), and the Final Payment Date shall be moved
forward accordingly.

          (b) Voluntary Prepayments. The Borrower shall have the right at any
time or from time to time, upon prior written notice to the Lender specifying
the Loan being repaid, to prepay all or any portion of any Loan, without premium
or penalty. Any prepayment shall be applied to principal installments in the
inverse order of their maturity.

     2.5 Application of Payments. Except as otherwise expressly provided herein,
all payments received by the Lender from the Borrower in respect of each Loan
shall be applied:

          firstly, to overdue interest, if any;

          secondly, to expenses and other amounts (other than principal) due
          hereunder;

          thirdly, to any interest then due;

          fourthly, to any principal payments then due; and

          fifthly, to the prepayment of any outstanding principal.

     2.6 Method of Payment. Unless otherwise provided in this Agreement, all
payments or prepayments made or due hereunder (including, but not limited to,
payments with respect to the Note) shall be made in U.S. dollars in immediately
available funds to the Lender prior to 2:00 p.m., New York City time, on the
date when due, by wire transfer to the bank account identified in the Note.

     2.7 Taxes. All sums payable by the Borrower hereunder or under the Note,
whether of principal, interest, overdue interest, expenses or otherwise, shall
be paid in full, free of any deductions or withholdings for any and all present
and future taxes, levies, imposts, stamps, duties, fees, deductions, charges,
withholdings, and all other similar types of liabilities with respect to such
sums payable hereunder or under the Note.

     2.8 Maximum Exposure. Notwithstanding anything contained herein to the
contrary, the Lender shall not be obligated to provide the proceeds of any Loan
if, immediately after such proceeds being provided, the sum of (i) all amounts
outstanding hereunder and under the Note, (ii) all amounts outstanding under the
Other Note (as defined in section 4.8 hereof), and (iii) all amounts due but
unpaid to PWES under the Overhaul Agreement, and (iv) the value of all other
Affiliate Obligations, if any, would exceed $20,000,000.00.

                                       6

<PAGE>

SECTION 3. REPRESENTATIONS AND WARRANTIES.

     The Borrower represents and warrants as follows as of the date hereof and
as of the Closing Date and as of the date of each disbursement of any portion of
the Loan:

     3.1 Existence and Capitalization. The Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Oregon and is duly qualified to do business and is in good standing as a foreign
corporation in all other jurisdictions in which failure to so qualify would have
a material adverse effect on its ability to conduct its operations or own its
properties.

     3.2 Authority. The Borrower has the requisite corporate power and authority
to execute and deliver this Agreement and the Note and to perform and observe
the provisions thereof, all of which have been duly authorized by all necessary
corporate action. By executing and delivering this Agreement and the Note and by
performing and observing the provisions thereof, the Borrower will not (a)
violate any existing provision of its certificate of incorporation or by-laws or
violate or otherwise become in default under any contract, law, order,
regulation, or other obligation binding upon it, or (b) cause the creation or
imposition of any lien, charge, or encumbrance of any nature whatsoever, upon
any of the Borrower's property, except as provided herein. This Agreement and
the Note have been duly authorized and executed and are valid and binding upon
the Borrower and are enforceable against the Borrower, except to the such
enforcement may be limited by applicable bankruptcy, insolvency, and other laws
of general application affecting the rights and remedies of creditors. The
Borrower has the requisite corporate power and authority to own its properties
and to carry on its business as now or proposed to be conducted.

     3.3 Litigation and Proceedings. No litigation or proceeding is
pending or, to the best of the Borrower's knowledge, threatened against the
Borrower or which calls into question the validity or enforceability of this
Agreement or the Note or the ability of the Borrower to meet the obligations
being assumed hereunder.

     3.4 Compliance. The Borrower is not in material violation of any statute,
ordinance, regulation, order, judgment, or decision of any federal, state,
county, municipal, or governmental agency, court or authority applicable to it
or its property or the conduct of its business; the Borrower has not violated or
breached in any material respect the provisions of any material indenture, note,
lease, or other agreement or instrument to which it is a party or by which it is
bound; nor does there exist any material default, or any event or situation
which, with the giving of notice or the lapse of time, or both, could become a
default under any such indenture, note, lease, or other agreement or instrument.

     3.5 Statements not Misleading. No statement, representation, or warranty
made by the Borrower in or pursuant to this Agreement or the Note contains any
untrue statement of a material fact, nor omits to state a material fact
necessary to make such statement not misleading.

                                       7

<PAGE>

     3.6 Consents or Approvals. No consent, approval, or authorization of, or
filing, registration, or qualification with, any governmental authority or any
other Person is required to be obtained by the Borrower in connection with the
execution, delivery, performance, or enforceability of this Agreement or the
Note other than those that have been obtained and are in full force and effect.

SECTION 4. CONDITIONS PRECEDENT.

Unless waived in writing by the Lender in advance, the commitment of the Lender
to provide the proceeds of the Loans is subject to the satisfaction (or written
waiver) of the following conditions precedent on or prior to the first Closing
Date:

     4.1 Note. The Borrower shall have executed and delivered to the Lender the
Note.

     4.2 Guaranty. The Guarantor shall have executed and delivered to the Lender
a Guaranty, substantially in the form of Exhibit 2 hereto, pursuant to which the
Guarantor guarantees the performance of the Borrower hereunder and under the
Note.

     4.3 Corporate Documents. The Borrower shall have delivered to the Lender
such corporate documents as the Lender may deem necessary to evidence the
authority of the Borrower to enter into this Agreement and the Note and to
evidence the incumbency of those officers of the Borrower executing and
delivering this Agreement and the Note.

     4.4 Representations, Warranties and Covenants. As of each Closing Date, all
representations and warranties set forth in this Agreement shall be true and
correct in all material respects, all covenants shall have been complied with in
all material respects and no Event of Default shall then exist.

     4.5 Material Adverse Change. As of each Closing Date, the Lender shall have
determined that no change shall have occurred since the first Closing Date with
respect to the Borrower's financial condition or business prospects which would,
in the sole judgment of the Lender, materially adversely affect the ability of
the Borrower to meet its obligation hereunder or under the Note.

     4.6 No Default; Compliance. As of each Closing Date, the Borrower shall
certify that: (i) all representations and warranties of the Borrower in Section
4 hereof are true in all material respects; (ii) no Event of Default or
possible default exists under this Agreement, the PWES Agreement, the Chase
Credit Agreement, or the Chase Participation Agreement; and (iii) the Borrower
has performed all obligations and taken all actions to be performed or taken by
it at or prior to the date of the Closing Date.

     4.7 Legal Opinions. The Borrower and the Guarantor shall have caused its
counsel to deliver to the Lender a legal opinion in form and substance
reasonably satisfactory to the Lender.

                                       8

<PAGE>

     4.8 Other Obligations. The Borrower shall have executed and delivered to
Lender that certain promissory note describing a principal amount of
$4,223,291.63 (the "Other Note") and Borrower shall not be in default of its
obligations thereunder.

     4.9 Other Documents. The Borrower shall have delivered to the Lender such
other certificates, agreements, and documents, in form and substance
satisfactory to the Lender, as the Lender reasonably may request.

SECTION 5. AFFIRMATIVE COVENANTS.

     The Borrower agrees that so long as this Agreement remains in effect or any
Borrower Obligation remains unpaid or unfulfilled, the Borrower will perform and
observe all of the following provisions unless the Lender expressly permits in
writing the non-performance or nonobservance of any of such provisions.

     5.1 Notice. The Borrower shall notify the Lender promptly, but in any event
within five Business Days of its discovery thereof, (a) whenever any Event of
Default occurs hereunder, (b) whenever any action, suit, or proceeding is
commenced by or against the Borrower which, if adversely determined, would
result in a material, adverse change in the business, properties, prospects, or
financial condition of the Borrower, and (c) whenever any material, adverse
change occurs in the business, properties, prospects, or financial condition of
the Borrower.

     5.2 Continued Existence; Compliance with Law. The Borrower shall comply in
all respects with its certificate of incorporation. The Borrower shall preserve,
renew and keep in full force and effect its existence as a corporation and its
material rights, licenses, certificates, and permits, and shall comply in all
material respects with all laws, rules, regulations, ordinances, orders and
judgments applicable to it. The Borrower will obtain, renew, and extend all of
the foregoing rights, certificates, permits, licenses, certificates of
compliance and the like which may be necessary for the continuation of the
operation of its business and will give prompt written notice to the Lender of
(a) any citation or order relating thereto, (b) any lapse, suspension,
revocation, rescission or other termination thereof, (c) any alleged breach or
violation thereof by the Borrower or any other Person, (d) any proceeding
relating thereto, or (e) any refusal of any person to grant or extend the same.

     5.3 Information and Inspection. The Borrower and the Guarantor shall
furnish the Lender, as soon as practicable after the end of each fiscal quarter
(but in no event not later than 45 days thereafter) a copy of the unaudited
financial statements (including but not limited to balance sheet, income
statement and cash flow statement) of the Borrower and the Guarantor prepared in
accordance with GAAP (and all of which, in respect of the Guarantor, must be
provided on a consolidated basis). The Borrower and the Guarantor shall also
furnish to the Lender from time to time, upon request, full information
pertaining to any covenant, provision, or condition hereof. At all reasonable
times and as often as the Lender may reasonably request, upon reasonable notice,
the Borrower and the Guarantor shall permit any authorized representative
designated by the Lender to visit and inspect any of the properties of

                                       9

<PAGE>

the Borrower and the Guarantor and to take extracts therefrom, and to discuss
the Borrower's and Guarantor's affairs, finances, and accounts with the
management of the Borrower and Guarantor.

     5.4 Payment of Taxes. The Borrower will pay and discharge promptly as they
become due and payable all taxes, assessments and other governmental charges or
levies imposed upon it or its income or any of its property or assets, or any
part thereof, as well as all lawful claims of any kind (including claims for
labor, materials and supplies) which, if unpaid, might by law become a lien or a
charge upon its property; provided that the Borrower shall not be required to
pay any such tax, assessment, charge, levy or claim if the amount, applicability
or validity thereof shall currently be contested in good faith by appropriate
proceedings or other appropriate actions promptly initiated and diligently
conducted and if the Borrower shall have set aside on its books such reserves,
if any, with respect thereto as are required by GAAP and deemed appropriate by
the Borrower and its independent public accountants.

     5.5 Payment of Other Indebtedness; Etc. Except as to matters being
contested in good faith and by appropriate proceedings or other appropriate
action, the Borrower will pay promptly when due, or in conformance with
customary trade terms, all other indebtedness, liabilities and obligations
incident to the conduct of its business.

SECTION 6. NEGATIVE COVENANTS.

     6.1 Amendments or Waivers. The Borrower shall not materially amend or
cancel or consent to the material amendment or cancellation of the Chase Credit
Agreement, the Chase Participation Agreement, or any other loan agreement (or
waive a material right thereunder) in any manner that might have the effect of
materially and adversely affecting the rights of the Lender hereunder.

SECTION 7. EVENTS OF DEFAULT.

     Each of the following shall constitute an Event of Default hereunder:

     7.1 Payments. If any installment of principal or interest on the Note shall
not be paid in full on the date that the same shall be due and payable.

     7.2 Covenants; Guaranty.

          (a) If the Guaranty shall for any reason whatsoever cease to be in
full force and effect (unless the Guaranty is released pursuant to Section 9.12
hereof.

          (b) If the Borrower shall fail or omit to perform, observe or satisfy
any other agreement, covenant, or provision contained or referred to any other
Section of this Agreement and such failure shall not have been fully corrected
within thirty days after Borrower's receipt from the Lender of written notice
that such condition is to be remedied.

                                       10

<PAGE>

     7.3 Warranties. If any representation, warranty, or statement made in or
pursuant to this Agreement or the Note shall be false or erroneous in any
materia1 respect when made.

     7.4 Borrower's Solvency. If the Borrower or the Guarantor shall:

          (a) cease operating as an air carrier or lose its certification to
operate as an air carrier, or

          (b) generally not pay its debts as such debts become due, or

          (c) make a general assignment for the benefit of creditors, or

          (d) apply for or consent to or acquiesce in the appointment of a
receiver, a custodian, a trustee, or liquidator of all or a substantial part of
its assets, or

          (e) file a voluntary case in bankruptcy or file a petition or an
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any other law (whether federal or state) relating to relief of
debtors, or admit (by answer, by default or otherwise) the material allegations
of a petition filed against it in any bankruptcy reorganization, insolvency, or
other proceeding (whether federal or state) relating to relief of debtors, or

          (f) suffer or permit to continue unstayed and in effect for sixty
consecutive days any judgment, decree, or order, entered by a court or
governmental commission of competent jurisdiction, which assumes custody or
control of the Borrower approves a petition seeking its reorganization or any
other judicial modification of the rights of its creditors, or appoints a
receiver, custodian, trustee, or liquidator for the Borrower or of all or a
substantial part of its assets.

     7.5 Challenge to Enforceability. If the validity or enforceability of any
material provision of this Agreement, the Note, the Other Note, or the Guaranty
shall be contested by legal action by the Borrower or the Guarantor, or the
Borrower or Guarantor shall deny that it or he has any further liability or
obligation hereunder or thereunder.

     7.6 Cross-Default. If there shall occur a default or event of default under
the Chase Credit Agreement, the Chase Participation Agreement, or under the PWES
Agreement, the Other Note, or under any other agreement between Borrower or
Guarantor and any affiliate or subsidiary of Borrower or Guarantor and Lender
and any subsidiary or affiliate of Lender.

SECTION 8. REMEDIES.

     8.1 Acceleration. If any Event of Default shall occur, the Lender may, at
its option and by written notice to the Borrower, accelerate the maturity of all
Borrower Obligations, whereupon all Borrower Obligations shall become and
thereafter be immediately due and

                                       11

<PAGE>

payable in full without any presentment or demand and without any further or
other notice of any kind, except as provided herein, all of which are hereby
waived by the Borrower. In such event, the Lender shall not be obligated to
provide any additional Loan proceeds.

     8.2 Automatic Defaults. If any Event of Default referred to in Section 7
shall occur, the principal of and interest on the Note, then outstanding, and
all of the other Borrower Obligations shall thereupon become and thereafter be
immediately due and payable in full, all without any presentment, demand, or
notice of any kind, which are hereby waived by the Borrower.

     8.3 Other Remedies.

     (a) Upon an Event of Default hereunder, and during the continuation
thereof, the Lender may exercise any other right, power, or remedy as may be
provided herein, in this Agreement, the Note or as may be provided at law or in
equity, including, without limitation, the right to recover judgment against the
Borrower for any amount due either before, during, or after any proceedings,
including but not limited to any and all legal fees and expenses incurred by the
Lender in pursuing all such remedies.

SECTION 9. MISCELLANEOUS.

     9.1 Interpretation. Each right, power, or privilege specified or referred
to in this Agreement or the Note is in addition to any other rights, powers, or
privileges that the Lender may otherwise have or acquire by operation of law, by
other contract or otherwise. No course of dealing in respect of, nor any
omission or delay in the exercise of, any right, power, or privilege by the
Lender shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any further or other exercise thereof or of any other,
as each right, power or privilege may be exercised independently or concurrently
with others and as often and in such order as the Lender may deem expedient. The
Lender in its sole discretion may from time to time grant the Borrower waivers
and consents in respect to this Agreement, but no such waiver or consent shall
bind the Lender unless specifically granted in writing. The provisions of this
Agreement shall bind and benefit the Borrower, the Lender, and their respective
successors and permitted assigns. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. The several captions
to different sections and subsections of this Agreement are inserted for
convenience only and shall be ignored in interpreting the provisions hereof.
This Agreement and the Note constitute the entire agreement among the parties on
the subject matter hereof.

     9.2 Notices. All notices, requests, demands, directions, and other
communications given to or made upon any party hereto under the provisions of
this Agreement shall be in writing (including telegraphic communication), shall
be effective upon receipt and shall be delivered or sent by first class,
certified, return receipt requested, or first class express mail or

                                       12

<PAGE>

overnight air courier service, or by telecopy with confirmation in writing, in
all cases with postage or charges prepaid, to the applicable party, addressed:

     (a)  If to the Lender, to;

          UT Finance Corporation
          400 Main Street, M/S 133-54
          East Hartford, Connecticut 06108
          ATTENTION: President

          Telephone: (860) 565-7364
          Facsimile: (860) 565-0187

     (b)  If to the Borrower, to:

          Evergreen International Airlines, Inc.
          3850 Three Mile Lane
          McMinnville, Oregon 97128
          ATTENTION: President

          Telephone: (503) 472-9361
          Facsimile: (503) 434-4217

or otherwise in accordance with any unrevoked written direction from any party
to any other party hereto.

     9.3 Further Assurances. From time to time, the Borrower shall execute and
deliver to the Lender such additional documents as the Lender may reasonably
require to carry out the purposes this Agreement or to preserve and protect the
rights of the Lender as contemplated herein or therein.

     9.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

     9.5 Survival of Agreements. All covenants, agreements, representations, and
warranties made in this Agreement shall survive any investigation and each
Closing Date, and shall continue in full force and effect so long as any of the
Borrower Obligations remains to be performed or paid.

     9.6 Modifications. No modification or amendment of this Agreement shall be
effective unless signed by the parties hereto. No waiver by the Lender of any
right, power, or remedy under this Agreement shall be effective unless given in
writing by the Lender.

                                       13

<PAGE>

     9.7 Termination. This Agreement shall terminate when all amounts due
hereunder or under the Note shall have been paid in full and all other
obligations hereunder or thereunder shall have been fully performed, so long as
the Lender has no further obligation to advance sums hereunder.

     9.8 Confidentiality. The Lender agrees to hold any confidential information
which it may receive from the Borrower pursuant to this Agreement in confidence,
except for disclosure (a) to legal counsel, accountants and other professional
advisors to the Lender, (b) to regulatory officials, (c) as required by law,
regulation or legal process, (d) in connection with any legal proceeding to
which the Lender is a parry.

     9.9 Assignment. The Lender shall have the right to assign any of its
interest in this Agreement or under the Note or to assign any of its rights or
delegate any of its obligations hereunder to any other party. The Borrower may
not assign all or any portion of this Agreement or the Note without the prior
written consent of the Lender.

     9.10 Choice of Law. This Agreement and the rights of the parties hereunder
shall be governed, construed and enforced in all respects in accordance with the
laws of the State of New York (without regard to the choice of law provisions
thereof).

     9.11 Consent to Jurisdiction.

     (a) Each party hereto irrevocably submits to the jurisdiction of any
Federal court sitting in the Southern District of New York in any action or
proceeding arising out of or relating to this Agreement or the Note, and each
party hereto irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such State of New York or Federal
court. Each party hereto hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding.

     (b) Nothing in this Section 9.11 shall affect the right of either party to
serve legal process in any other manner permitted by law or affect the right of
either party to bring any action or proceeding against the other party or its
property in the courts of any other jurisdictions. The consents to jurisdiction
set forth in this Section 9.11 shall not constitute general consents to service
of process in the State of New York and shall have no effect for any
purpose-except as provided in this Section 9.11 and shall not be deemed to
confer rights on any person other than the parties to this Agreement.

     9.12 Regarding the Guaranty

The obligation to provide and maintain in full force and effect the Guaranty
required by Section 4.2 hereof shall be discharged if:

          (i) on February 28, 1999: (1) the Borrower has made all payments due
under the Note and the Other Note as and when due thereunder from time to
time, (2) the Borrower is

                                       14

<PAGE>

not in default of its obligations hereunder and under the Note, under the Other
Note, or under either the Chase Credit Agreement or the Chase Participation
Agreement. (3) the Borrower and the Guarantor shall be in full compliance with
all financial covenants in each of the Chase Credit Agreement and the Chase
Participation Agreement(including but not limited to those relating to those
contained in Article VI of the Chase Credit Agreement and in Article VII of the
Chase Participation Agreement) as such covenants exist as of the date hereof,
and (4) Borrower or any affiliate of Borrower is not then in default of any
other obligation to Lender or any affiliate of Lender, or

          (ii) at any point after the aggregate outstanding principal balance
under the Note and the Other Note is less than $7,500,000; provided, however,
that in such event the Lender shall be relieved of any and all obligations
hereunder to provide additional Loan proceeds hereunder; and provided, further,
however, that in such event, and so long as no Event of Default shall have
occurred hereunder, Borrower may cause the Guaranty to be reissued by Guarantor,
in which event additional Loans may be provided hereunder.

Should the Guaranty be discharged pursuant to the immediately preceding
sentence, then: (i) the parties shall thereupon enter into a written
acknowledgment, executed by both parties, confirming that the Guaranty has been
discharged (it being understood that the Guaranty shall not be deemed to be
discharged until such time as such acknowledgment is executed by both parties),
and (ii) the Interest Rate shall be increased to the prime lending rate of
Citibank, N.A., New York, New York in effect from time to time plus two percent
(2%) with effect from the moment of discharge.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       15

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.

EVERGREEN INTERNATIONAL AIRLINES, INC.

By:  /s/ Larry K. Lane
     -----------------------------------
Its: PRESIDENT

UT FINANCE CORPORATION

BY:  /s/ Paul Oddi
     -----------------------------------
Its: PRESIDENT

                                       16

<PAGE>

                                                                       EXHIBIT 1

                                 PROMISSORY NOTE

US $20,000,000.00                                                August 22, 1997

     FOR VALUE RECEIVED, the undersigned, EVERGREEN INTERNATIONAL AIRLINES,
INC., a corporation organized and existing under the laws of the State of Oregon
(the "Borrower"), hereby promises to pay to United Technologies Corporation,
Pratt & Whitney Group, a Delaware corporation (the "Lender") at such place as
the Lender or any subsequent holder hereof may specify, in lawful money of the
United States of America, the principal sum of equal to the lesser of Twenty
Million U.S. Dollars (US $20,000,000.00) and the aggregate outstanding amount of
principal determined pursuant to that certain Loan Agreement dated as of August
22, 1997 between the Borrower and the Lender (the "Loan Agreement"). The
principal amount of this Note shall be repaid as provided in the Loan Agreement.

     Interest on the outstanding principal amount of this Note shall accrue at
the prime rate in effect from time to time plus one and one-half percent (the
"Interest Rate") and shall be calculated on the actual principal outstanding
from time to time. The Interest Rate shall be computed on the basis of a 360-day
year and actual number of days elapsed. For purposes hereof, the "prime rate"
shall mean the prime lending rate of Citibank, N.A., New York, New York in
effect from time to time. The Lender shall determine the Interest Rate in effect
for each period, shall calculate the interest due two days prior to each Payment
Date, and shall promptly notify the Borrower of such calculation. The Interest
Rate may be increased pursuant to Section 9.12 of the Loan Agreement.

     The Borrower shall pay interest on overdue principal (and on overdue
interest, to the extent permitted by law), from and after the day which is five
days after such payment was due, on demand at a rate equal to the Interest Rate
plus two percent; provided, however, that the rate of interest shall in no event
exceed the maximum rate, if any, permitted under applicable law.

     Payment shall be made to the Lender in U.S. Dollars and in immediately
available funds before 2:00 P.M., New York City time, by transfer to the
following account:

          Citibank, N.A.
          New York, New York

          For credit to: UT Finance Corporation
          Account No. 00059088
          ABA Ref. No.021000089
          Reference: Evergreen Grid Note

                                       17

<PAGE>

     This Note is the Note referred to in the Loan Agreement. The holder of this
Note is entitled to the benefits of the Loan Agreement and may enforce the
agreement of the Company contained therein and exercise the remedies provided
for thereby or otherwise available in respect thereof. Reference is made to the
Loan Agreement for a description of the nature and extent of the rights of the
holders of this Note in respect thereof.

     In the event that the due date of any payment due hereunder is not a
Business Day, then Borrower shall make such payment on the next succeeding
Business Day. This Note may be prepaid by the Borrower, in full or in part, at
any time without premium of penalty, in accordance with the provisions of the
Loan Agreement.

     In the event Borrower shall fail to pay any installment of principal or
interest under this Note as such installment becomes due and payable, or in the
event of an appointment of a receiver, trustee, or custodian for any part of the
property of the Borrower, or the assignment for the benefit of creditors by the
Borrower or inability of the Borrower to meet its obligations as they become
due, or the commencement of any proceedings under any bankruptcy or insolvency
laws by or against the Borrower, then the Lender shall have the option, time
being of the essence, without notice or demand, to declare the unpaid balance of
this Note and accrued interest thereon at once due and payable. The Borrower and
endorsers severally waive diligence, presentment, demand, protest and notice of
every kind, and warrants to the Lender that all actions and approvals required
for the execution and delivery of this Note as the legal, valid and binding
obligations of the undersigned, enforceable against it in accordance with the
terms hereof, have been duly taken and obtained. The non-exercise by the Lender
or any subsequent holder of this Note of any of its rights hereunder in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance.

     In the event that any action, suit or proceeding is brought by the Lender
or any subsequent holder hereof to collect this Note, the undersigned shall be
liable for all costs and expenses of collection, including without limitation,
reasonable attorney's fees and disbursements.

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.

                                          EVERGREEN INTERNATIONAL AIRLINES, INC.

                                          By:
                                              ----------------------------------
                                          Its:

                                       18

<PAGE>

                                                                       EXHIBIT 2

                                    GUARANTY

This Guaranty is entered into as of August 22, 1997 by Evergreen International
Aviation, Inc., an Oregon corporation with its principal executive offices at
McMinnville, Oregon (the "Guarantor"), in favor of UT Finance Corporation, a
corporation organized and existing under the laws of Delaware (the
"Corporation").

Whereas, in consideration of the entry into effect of that certain Loan
Agreement dated as of the date hereof (the "Loan Agreement") between the
Corporation and Evergreen International Airlines, Inc., a corporation organized
and existing under the laws of Oregon (the "Borrower"), the Guarantor has agreed
to enter into this Guaranty on the terms set forth herein.

1.   The Guarantor hereby absolutely, unconditionally, and irrevocably
     guarantees (as primary obligor and not as a surety), for the benefit of the
     Corporation, its successors, endorsees and assigns, (i) the due and
     punctual payment by the Borrower of the principal and interest on the Note
     and the Other Note evidencing the Loans and loans by the Lender, together
     with all other amounts now or hereafter payable by the Borrower under the
     loan Agreement, the Note, or the Other Note, and (ii) the performance by
     the Borrower of any and all obligations pursuant to the terms and
     conditions of the Loan Agreement (the "Obligations"). If the Borrower
     defaults in the payment of any Obligation when due according to its terms,
     promptly after written demand by the Corporation for payment has been
     received by the Guarantor, the Guarantor will pay to the Corporation the
     total amount of Obligations then due by the Borrower. This Guaranty shall
     remain in full force and effect until all of the Obligations shall have
     been irrevocably satisfied or paid in full. The Guarantor shall pay all
     costs and expenses, including attorney's fees and expenses, incurred in
     connection with the enforcement of the Obligations or in connection with
     the enforcement of the obligations of the Guarantor hereunder. This
     Guaranty shall be an absolute, unconditional, and continuing guaranty of
     payment, shall not be subject to any counterclaim, setoff, deduction,
     abatement, or defense based upon any claim the Guarantor may have against
     the Lender or any affiliate of Lender, or by reason of the invalidity,
     illegality, nongenuineness, irregularity, compromise, unenforceability of,
     or any other event or occurrence affecting any of the Obligations, and
     shall not be discharged released, or in any way affected by any
     circumstance or condition, whether or not known to the Guarantor. This
     Guaranty may be discharged only as described in Section 9.12 of the Loan
     Agreement.

2.   The Guarantor agrees that the Corporation may resort to the Guarantor for
     payment of any of the Obligations whether or not the Corporation shall have
     resorted to any collateral therefor or shall have proceeded against the
     Borrower or any other obligor principally or secondarily liable with
     respect to any of the Obligations. The Corporation shall not be obligated
     to file any claim relating to the Obligations in the event the
     Borrower becomes subject to a bankruptcy, reorganization, or similar

                                       19

<PAGE>

     proceeding, and the failure of the Corporation so to file shall not affect
     the Guarantor's obligations hereunder. In the event that any payment to the
     Corporation in respect of any Obligation is rescinded or must otherwise be
     returned for any reason whatsoever, the Guarantor shall remain liable
     hereunder with respect to such Obligations as if such payment had not been
     made. The Guarantor's guarantee herein made is a guarantee of performance
     and not of collection.

3.   Guarantor agrees that the Corporation may at any time and from time to
     time, either before or after the maturity thereof, without notice to or
     further consent of the Guarantor extend the time of payment of, exchange or
     surrender any collateral for, or renew any of the Obligations, and may also
     make any agreement with the Borrower or with any other party to or person
     liable on any of the Obligations or interested therein, for the extension,
     renewal, payment, compromise, discharge, or release thereof, in whole or in
     part, or for any modification of the term thereof or any agreement between
     the Corporation and the Borrower or any such other party or person, without
     in any way impairing or affecting this Guarantee. The Guarantor hereby
     waives: (i) notice of the acceptance of this Guarantee and the Obligations
     presentment, demand for payment, notice of dishonor, and protest (ii) any
     requirement for the enforcement, assertion, or exercise of any right,
     remedy, power, or privilege under or in respect of the Obligations, (iii)
     any requirement of diligence, (iv) any requirement that the Borrower be
     joined as a party to any proceedings for the enforcement of any provision
     of this Guaranty, and (v) acceptance of this Guaranty or any notice of
     intention to rely thereon.

4.   The Guarantor agrees that for so long as this Guaranty remains in effect,
     it shall not (a) merge or consolidate with any person, or permit the
     Borrower to merge or to consolidate with it, well, transfer, lease or
     otherwise dispose of (in one transaction or a series of transactions) all
     or any substantial part of its assets (whether now owned or hereafter
     acquired) or purchase, lease, or otherwise acquire (in one transaction or a
     series of transactions) all or any substantial part of the assets, business
     or product line of any person, (except that Guarantor may act in accordance
     with the exceptions delineated in Sections 6.05 (a)(i) through 6.05
     (a)(vii) of the Chase Participation Agreement (as defined in the Loan
     Agreement), but subject to the proviso immediately thereafter); or (b)
     sell, transfer or otherwise dispose of any capital stock of the Parent
     Company or any Subsidiary (as such terms are defined in the Chase
     Participation Agreement) or issue any capital stock of the Parent Company
     or any Subsidiary unless such capital stock is sold, transferred or
     otherwise disposed of as permitted by Section 6.02 (b) of the Chase
     Participation Agreement.

5.   No failure on the part of the Corporation to exercise, and no delay in
     exercising, any right, remedy or power hereunder shall operate as a waiver
     thereof, nor shall any single or partial exercise by the Corporation of any
     right, remedy or power hereunder preclude any other or future exercise of
     any right, remedy or power. Each and every right, remedy and power hereby
     granted to the Corporation or allowed it by law or

                                       20

<PAGE>

     other agreement shall be cumulative and not exclusive of any other, and may
     be exercised by the Corporation at any time or from time to time.

6.   The Guarantor hereby represents and warrants that this Guarantee
     constitutes a legal, valid and binding obligation of the Guarantor,
     enforceable against it in accordance with its terms, subject to bankruptcy,
     insolvency, reorganization, moratorium and other laws of general
     applicability relating to or affecting creditors' rights generally and to
     general principles of equity.

7.   All notices or demands on the Guarantor shall be deemed effective when
     received, shall be in writing, and shall be delivered by hand, by
     registered mail, or by facsimile transmission , addressed to the Guarantor
     at:

     Evergreen International Aviation, Inc.
               3850 Three Mile Lane
               McMinnville, Oregon 97128
               ATTENTION: President

               Telephone: (503) 472-9361
               Facsimile: (503) 434-4217

     or to such other address or facsimile number as the Guarantor shall have
     notified the Corporation in written notice to the Corporation.

8.   This Guarantee shall remain in full force and effect and shall be binding
     on the Guarantor, its successors and assigns until all of the Obligations
     have been paid in full.

9.   This Guaranty shall in all respects be governed by, and construed in
     accordance with, the laws of the State of New York, U.S.A., without regard
     to conflict of laws provisions.

10.  This instrument embodies the entire agreement between the Guarantor and the
     Corporation. There are no promises, terms, conditions or obligations other
     than those contained herein, and this Guaranty agreement shall supersede
     all previous communications, representations or agreements, either oral or
     written, of the Guarantor or the Corporation with respect to the subject
     matter hereof. No provision of this Guaranty may be changed or amended
     except by an instrument in writing signed by the Corporation and the
     Guarantor expressly referring to the provisions of this Guaranty to which
     such instrument relates.

11.  The Guarantor hereby waives, relinquishes, and releases any rights or
     claims which it may now have or hereafter have regarding contribution,
     subrogation, and/or reimbursement from or by the Borrower whether directly
     or indirectly, it being the

                                       21

<PAGE>

     intent that said Guarantor shall not, in any way, become a creditor of the
     Borrower by reason of the payment of any sum to the Lender pursuant to this
     Guaranty.

IN WITNESS WHEREOF, the Guarantor has affixed its signature as of the day and
year first written above.

EVERGREEN INTERNATIONAL AVIATION, INC.

By:
    ---------------------------------
Its:

                                       22

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