Document:

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EXHIBIT 10.26                                                        [EXECUTION]

                       THIRD AMENDMENT TO CREDIT AGREEMENT

         THIS THIRD AMENDMENT TO CREDIT AGREEMENT (herein called this
"Amendment") made as of June 1, 2000 by and among Pentegra Dental Group, Inc., a
Delaware corporation (herein called "Borrower"), and Bank One, Texas, N.A.,
individually and as Agent (herein called "Agent"), and the Lenders, including
Agent, party to the Original Agreement ("Lenders"), defined below.

                              W I T N E S S E T H:

         WHEREAS, Borrower, Agent and Lenders have entered into that certain
Credit Agreement dated as of June 1, 1998 (as amended, supplemented, or restated
to the date hereof, the "Original Agreement"), for the purposes and
consideration therein expressed, pursuant to which Lenders became obligated to
make loans to Borrower as therein provided; and

         WHEREAS, Borrower and Lenders desire to amend the Original Agreement to
modify certain terms and provisions thereof;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Lender to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.

                           Definitions and References

         Section 1.1. Terms Defined in the Original Agreement. Unless the
context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment.

         Section 1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.

         "Amendment" means this Third Amendment to Credit Agreement.

         "Credit Agreement" means the Original Agreement as amended hereby.

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                                   ARTICLE II.

                        Amendments to Original Agreement

         Section 2.1. Defined Terms. (a) The following defined terms in Section
1.1. of the Original Agreement are hereby amended in their entirety to read as
follows:

                      " 'Commitment' means the amount of $10,100,000, as from
         time to time reduced by Borrower pursuant to Section 2.2."

                      " 'Eurodollar Margin' means:

                         (i) with respect to Eurodollar Loan 1 for each day
         during any Fiscal Quarter on or before September 30, 2000, the
         Eurodollar Margin shall be 2.5% per annum;

                         (ii) with respect to Eurodollar Loan 1 for each day
         during any Fiscal Quarter on or after October 1, 2000, the Eurodollar
         Margin shall be 3.0% per annum; and

                         (iii) with respect to Eurodollar Loan 2 for each day
         during any Fiscal Quarter, the Eurodollar Margin shall be 4.5% per
         annum.

                         " 'Maturity Date' means July 31, 2001."

                         " 'Permitted Investments' means Investments in:

                         (a) marketable obligations, maturing within 12 months
         after acquisition thereof, issued or unconditionally guaranteed by the
         United States of America or an instrumentality or agency thereof and
         entitled to the full faith and credit of the United States of America.

                         (b) demand deposits, and time deposits (including
         certificates of deposit) maturing within 12 months from the date of
         deposit thereof, with any office of any Lender or with a domestic
         office of any national or state bank or trust company which is
         organized under the Laws of the United States of America or any state
         therein, which has capital, surplus and undivided profits of at least
         $500,000,000, and whose certificates of deposit have at least the third
         highest credit rating given by either Rating Agency.

                         (c) repurchase obligations with a term of not more than
         seven days for underlying securities of the types described in clause
         (a) above entered into with any commercial bank meeting the
         specifications of clause (b) above

                         (d) open market commercial paper, maturing within 270
         days after acquisition thereof, which has the highest or second highest
         credit rating given by either Rating Agency.

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                         (e) investments in money market or other mutual funds
         substantially all of whose assets comprise securities of the types
         described in clauses (a) through (d) above.

                         (f) investments in acquisitions of any Person, provided
         that (i) the consideration for any such acquisition shall consist
         solely of common stock of Borrower and capital securities of the Person
         so acquired, (ii) after giving effect to such acquisition, the Person
         so acquired shall not be liable for any Indebtedness, (iii) Borrower
         shall neither assume nor in any way become obligated or liable for any
         additional Indebtedness relating to or resulting from any such
         acquisition, and (iv) Borrower shall neither expend or pay any of
         Borrower's Cash and Cash Equivalents in connection with any such
         acquisition.

                         (g) credit extensions permitted by Section 7.8."

                         " 'Prime Rate' means

                         (a) with respect to Eurodollar Loan 1, on or before
         September 30, 2000, the base commercial rate of interest as announced
         from time to time by Agent (which may not be the lowest, best or most
         favorable rate of interest which Agent may charge on loans to its
         customers), and

                         (b) with respect to Eurodollar Loan 1, on or after
         October 1, 2000, the per annum rate of interest .50% above the base
         commercial rate of interest as announced from time to time by Agent
         (which may not be the lowest, best or most favorable rate of interest
         which Agent may charge on loans to its customers), and

                         (c) with respect to Eurodollar Loan 2, the per annum
         rate of interest 2.00% above the base commercial rate of interest as
         announced from time to time by Agent (which may not be the lowest, best
         or most favorable rate of interest which Agent may charge on loans to
         its customers)."

         (b)             The following new defined terms are hereby added to
                         Section 1.1. of the Original Agreement in appropriate
                         alphabetical order:

                         " 'Cash and Cash Equivalents' means all of Borrower's
         demand deposits and time deposits (including certificates of deposit)
         maturing within 12 months from the date of deposit thereof with Bank
         One, Arizona, N.A., but excluding any such deposits in the Remittance
         Account."

                         " 'Covenant Period' means a six-month period ending on
         March 31 and September 30 of any year."

                         " 'Dental Practice Advances' means all loans or
         advances by Borrower to Dental Practice Groups to provide working
         capital for the operations of Dental Practice Groups

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         and for other general business purposes, an itemized listing of which
         is attached hereto as Schedule 1."

                  " 'Dental Practice Notes' means all promissory notes executed
         by Dental Practice Groups payable to Borrower to evidence their
         respective obligations to repay Dental Practice Advances, each note
         shall be due and payable in thirty-six (36) equal monthly installments
         over a three (3) year period and bear interest at the per annum rate of
         ten percent (10%) and may not be renewed, extended, or increased by
         Borrower."

                  " 'Dental Practice Payments' means all payments received by
         Borrower in respect of the Dental Practice Notes and all payments
         received from Non-Conforming Dental Practice Groups (as defined in
         Section 6.18) in respect of Dental Practice Advances."

                  " 'Eurodollar Loan No. 1' means the Eurodollar Loan in the
         principal amount of $8,000,000 bearing interest at a rate of 8.78% per
         annum on June 1, 2000 and having an original Interest Period which
         began on June 1, 1998, as continued by successive Interest Periods or
         converted to a Base Rate Loan."

                  " 'Eurodollar Loan No. 2' means the Eurodollar Loan in the
         principal amount of $2,100,000 bearing interest at a rate of 10.78% per
         annum on June 1, 2000 and having an original Interest Period which
         began on April 6, 1999, as continued by successive Interest Periods or
         converted to a Base Rate Loan."

                  " 'Quarterly Note Collections' means, for any Fiscal Quarter,
         the aggregate amount of Dental Practice Payments deposited in the
         Remittance Account and applied by Agent against the Obligations
         pursuant to Section 6.18(b)."

                  " 'Remittance Account' means account number 4848-6521
         established at Bank One, Arizona, N.A. in the name of Borrower, which
         is a restricted account, from which Borrower may not withdraw funds
         except as expressly set forth herein, and which has been pledged to
         Agent."

         Section 2.2. Commitments to Lend; Notes. The last sentence in Section
2.1 of the Original Agreement is hereby amended in its entirety to read as
follows:

         "After June 1, 2000, no new Loans shall be made under this Agreement."

         Section 2.3. Scheduled Principal and Interest Payments. Section 2.7 of
the Original Agreement is hereby amended in its entirety to read as follows:

                  "Section 2.7. Scheduled Principal and Interest Payments. The
         principal amount of the Loans shall be due and payable as follows: (i)
         $250,000 of the principal amount of Eurodollar Loan 2 shall be due and
         payable on or before July 14, 2000, and (ii) the remainder of the
         principal amount of the Loans shall be due and payable in quarterly
         installments (subject to the proviso at

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         the end of this sentence), each of which shall be equal to the lesser
         of (a) $50,000 and (b) $350,000 minus the Quarterly Note Collections
         and shall be due and payable on the fifteenth day of October, January,
         April and July of each year, beginning October 15, 2000 (the "Quarterly
         Payments"), and continuing regularly thereafter until the Maturity
         Date, on which date all unpaid principal of and accrued interest on the
         Loans shall be due and payable; provided that after giving effect to
         the payment thereof, no Quarterly Payment shall cause the aggregate
         amount of Borrower's Cash and Cash Equivalents as of the last day of
         the Fiscal Quarter immediately preceding the date of such Quarterly
         Payment to be less than the amount of $750,000. Payments of principal
         shall first be applied to Eurodollar Loan 2. In addition to principal
         installments described above, interest shall be due and payable
         quarterly as it accrues on the last day of each September, December,
         March and June of each year, said installments of interest beginning
         June 30, 2000. As soon as available, and in any event within five (5)
         Business Days after the end of each Fiscal Quarter, Borrower will
         deliver to Agent a certificate certifying the amount of Borrower's Cash
         and Cash Equivalents as of the end of such Fiscal Quarter, in form,
         substance, and detail acceptable to Agent."

         Section 2.4. Mandatory Prepayments. Section 2.8(b) of the Original
Agreement is hereby deleted in its entirety.

         Section 2.5. Dental Practice Advances. The Original Agreement is hereby
amended to add Section 6.18 thereto immediately following Section 6.17 thereof
to read as follows:

         "Section 6.18. Dental Practice Advances.

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                  (a) Prior to June 1, 2000, Borrower has made Dental Practice
         Advances which are not evidenced by promissory notes and which were
         accounted for by Borrower as accounts receivable created in the
         ordinary course of its business. Borrower agrees to require each Dental
         Practice Group to which it has made a Dental Practice Advance to either
         (i) pay in full the principal amount plus all accrued interest in
         respect of such Dental Practice Advance on or before August 31, 2000 or
         (ii) execute and deliver to Borrower a Dental Practice Note
         (collectively, the "Repayment Options"). Borrower will use its best
         efforts to obtain the agreement of each such Dental Practice Group to
         one of the Repayment Options. In the event that any such Dental
         Practice Group does not agree to a Repayment Option (a "Non-Conforming
         Dental Practice Group"), Borrower will develop a plan to pursue
         collection remedies against such Non-Conforming Dental Practice Group
         that is reasonably acceptable to Agent. On or before July 30, 2000,
         Borrower shall deliver to Agent a certificate signed by the chief
         financial officer of Borrower which (i) certifies that Borrower has
         required each Dental Practice Group to which Borrower has made a Dental
         Practice Advance to agree to a Repayment Option, (ii) attaches a
         schedule which lists each Dental Practice Group that has elected to
         execute and deliver a Dental Practice Note, and (iii) attaches a
         schedule which lists each Non-Conforming Dental Practice Group and the
         collection remedies to be pursued by Borrower, all in form, substance
         and detail acceptable to Agent. Borrower hereby agrees (i) to hold all
         Dental Practice Payments received by it in trust for the benefit of
         Agent and to deposit all Dental Practice Payments into the Remittance
         Account weekly on the last Business Day of each week and (ii) at the
         request of Agent, to direct all Dental Practice Groups to which it has
         made a Dental Practice Advance to make all Dental Practice Payments
         directly to the Remittance Account. As soon as available, and in any
         event within thirty (30) days after the end of each month, Borrower
         will deliver to Agent (at Borrower's expense) a certificate (i)
         itemizing the current balance of the Dental Practice Notes and all
         Dental Practice Payments received in respect thereof during such month,
         (ii) providing a current status of the collection efforts relating to
         each Non-Conforming Dental Practice Group, and (iii) providing such
         other information relating to the Dental Practice Advances as may be
         requested by Agent, all in form, substance, and detail acceptable to
         Agent.

                  (b) If no Default or Event of Default has occurred and is
         continuing, on the last Business Day of each week, Borrower hereby
         irrevocably directs Bank One, Arizona, N.A. to transfer all funds on
         deposit in the Remittance Account to Agent, to be applied by Agent as a
         payment (or a prepayment, as applicable) of the Obligations in
         accordance with Section 3.1. If a Default or Event of Default has
         occurred and is continuing, Agent may at any time and from time to time
         direct Bank One, Arizona, N.A. to transfer any funds on deposit in the
         Remittance Account to Agent, to be applied by Agent as a payment (or a
         prepayment, as applicable) of the Obligations in accordance with
         Section 3.1, and Borrower hereby irrevocably directs Bank One, Arizona,
         N.A. to strictly follow any such directions received from Agent. If a
         Default or Event of Default has occurred and is continuing, Agent will
         direct the transfer of funds and apply such funds pursuant to the
         immediately preceding sentence at least once per week. All principal or
         interest
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         prepaid pursuant to this section shall be in addition to, and not in
         lieu of, all payments otherwise required to be paid under the Loan
         Documents at the time of such prepayment.

                  (c) Borrower hereby agrees to deliver all Dental Practice
         Notes to Agent on July 31, 2000, August 31, 2000 and thereafter
         promptly upon its receipt thereof in accordance with the requirements
         of the Security Documents. All such Dental Practice Notes shall be
         delivered in suitable form for transfer by delivery with any necessary
         endorsement or shall be accompanied by fully executed instruments of
         transfer or assignment in blank, all in form and substance satisfactory
         to Agent."

         Section 2.6. Indebtedness. Section 7.1 of the Original Agreement is
hereby amended in its entirety to read as follows:

                       "Section 7.1. Indebtedness. No Restricted Person will in
         any manner owe or be liable for Indebtedness except:

                  (i)      the Obligations.

                  (ii)     Subordinated Debt.

                  (iii) Indebtedness outstanding under the instruments and
         agreements described on the Disclosure Schedule, excluding any renewals
         or extensions of such Indebtedness.
                  (iv) purchase money Indebtedness or other acquired or assumed
         Indebtedness in connection with Dental Practice Acquisitions
         consummated on or before June 1, 2000 in an aggregate principal amount
         not to exceed the amount of such Indebtedness outstanding as of June 1,
         2000, excluding any renewals or extensions of such Indebtedness."

         Section 2.7. Limitation on Investments and New Businesses. Section 7.7
of the Original Agreement is hereby amended in its entirety to read as follows:

                       "Section 7.7. Limitation on Investments and New
         Businesses. No Restricted Person will (i) make any expenditure or
         commitment or incur any obligation or enter into or engage in any
         transaction except in the ordinary course of business, (ii) engage
         directly or indirectly in any business or conduct any operations except
         in connection with or incidental to its present businesses and
         operations, or (iii) make any acquisitions of or capital contributions
         to or other investments in any Person, other than Permitted Investments
         and Dental Practice Advances existing as of June 1, 2000 (which Dental
         Practice Advances may not be renewed, extended, or increased)."

         Section 2.8. Limitation on Investments and New Businesses. Section 7.9
of the Original Agreement is hereby amended in its entirety to read as follows:

                       "Section 7.9. Transactions with Affiliates. No Restricted
         Person will engage in any material transaction with any of its
         Affiliates on terms which are less favorable to it

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         than those which would have been obtainable at the time in arm's-length
         dealing with Persons other than such Affiliates, provided that Borrower
         shall not extend credit or make any advances or loans to any
         Subsidiary, any Affiliate, or any Dental Practice Group."

         Section 2.9. Dental Base. Section 7.11 of the Original Agreement is
hereby deleted in its entirety.

         Section 2.10. Continuity of Founding Practices and Affiliated
Practices. Section 7.12 of the Original Agreement is hereby deleted in its
entirety.

         Section 2.11. Capital Expenditures. Section 7.13 of the Original
Agreement is hereby deleted in its entirety.

         Section 2.12. Current Ratio. Section 7.14 of the Original Agreement is
hereby amended in its entirety to read as follows:

                    "Section 7.14. Current Ratio. As of the end of each Covenant
         Period, the ratio of Borrower's Consolidated current assets to
         Borrower's Consolidated current liabilities (excluding any current
         liabilities from litigation, the Obligations and any other
         non-operational, non-recurring charge), all determined in accordance
         with GAAP, shall not be less than 1.0 to 1.0."

         Section 2.13. Total Funded Debt to Capitalization Ratio. Section 7.15
of the Original Agreement is hereby deleted in its entirety.

         Section 2.14. Total Funded Debt to EBITDA Ratio. Section 7.16 of the
Original Agreement is hereby deleted in its entirety.

         Section 2.15. Total Senior Funded Debt to EBITDA Ratio. Section 7.17 of
the Original Agreement is hereby deleted in its entirety.

         Section 2.16. Fixed Charge Ratio. Section 7.18 of the Original
Agreement is hereby deleted in its entirety.

         Section 2.17. Debt Service Coverage Ratio. Section 7.19 of the Original
Agreement is hereby amended in its entirety to read as follows:

                    "Section 7.19. Debt Service Coverage Ratio. As of the end of
       each Covenant Period, the ratio of (a) Borrower's EBITDA for the two
       consecutive Fiscal Quarters then ended, multiplied by two, to (b)
       scheduled principal payments on all other Indebtedness (excluding the
       Obligations) due during the next four Fiscal Quarters, shall not be less
       than 1.50 to 1.0."

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         Section 2.18. Net Worth. Section 7.20 of the Original Agreement is
hereby amended in its entirety to read as follows:

                    "Section 7.20. Net Worth. Borrower's Consolidated Net Worth
         as of the end of each Fiscal Quarter, shall not be less than $0.00;
         provided that Borrower's Consolidated Net Worth shall be automatically
         increased to reflect non-cash items (including adjustments for
         impairment of goodwill, bad debt reserves, accrual adjustments,
         depreciation, amortization, or other one-time non-cash items) on
         Borrower's Consolidated financial statements."

         Section 2.19. Dental Practice Acquisitions & Dental Practice Advances.
Section 7.21 of the Original Agreement is hereby amended in its entirety to read
as follows:

                       "Section 7.21. Dental Practice Acquisitions & Dental
         Practice Advances. Borrower shall not make any Dental Practice
         Acquisition or make any Dental Practice Advances from and after June 1,
         2000."

         Section 2.20. Bank Accounts. The Original Agreement is hereby amended
to add Section 7.22 thereto immediately following Section 7.21 thereof read as
follows:

                       "Section 7.21. Bank Accounts. Borrower shall not
         establish any demand, time, savings, passbook, or similar account or
         certificate of deposit at any bank or other depository or financial
         institution other than Bank One, Arizona, N.A."

                                   ARTICLE III

                            Fees and Other Agreements

         Section 3.1. No Optional Conversion to Base Rate Loans. After June 1,
2000, Borrower shall not have the option to convert Eurodollar Loan No.1 or
Eurodollar Loan No. 2 to a Base Rate Loan; provided, however, that Eurodollar
Loan No.1 and/or Eurodollar Loan No. 2 may be converted to Base Rate Loans by
Agent pursuant to Sections 3.2 through 3.5.

         Section 3.2. Amendment Fee. In consideration of Agent and each Lenders'
agreement to enter into this Amendment, Borrower will pay to Agent for the
account of Lenders an amendment fee in the aggregate amount of $20,000 (the
"Amendment Fee"), which shall be due and payable on the date of effectiveness of
this Amendment.

         Section 3.3. Additional Security. Pursuant to Section 6.15 of the
Credit Agreement, Lender hereby requests and Borrower hereby agrees to grant
security interests in additional collateral to further secure the Obligations
and to modify existing Security Documents on or before July 31, 2000, each in
form and substance satisfactory to Agent, in order to effect the following:

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         (a) to grant new liens in all of Borrower's inventory and equipment,
including that inventory and equipment used in all Dental Practice Groups, and
in any of Borrower's other personal property;

         (b) to grant new liens in all of Borrower's stock or other equity
interests in any Dental Practice Groups;

         (c) to modify existing Security Documents to confirm that all right,
title and interest of Borrower in and to all management service agreements and
receivables of the Dental Practice Groups which secure such management service
agreements are covered by the Security Documents;

         (d) to obtain security agreements covering the accounts receivable of
each Dental Practice Group acquired as part of a Dental Practice Acquisition,
and assigning each such agreement to Agent for the benefit of Lenders; and

         (e) to execute and file all necessary UCC-1 and UCC-3 financing
statements covering all additional collateral above and reflecting Borrower's
name change to e-dentist.com upon the occurrence of such change.

         Section 3.4. Waiver of Financial Covenants. In connection with
Borrower's creation of an additional reserve for bad debts totaling $4,200,000,
on Borrower's financial statements as of March 31, 2000 (collectively, the
"Financial Statement Changes"), Agent (on behalf of Lenders) hereby waives any
Default or Event of Default resulting from any violations of Sections 7.14,
7.15, 7.16, 7.17, and 7.19 of the Credit Agreement as of March 31, 2000.

                                   ARTICLE IV.

                           Conditions of Effectiveness

         Section 4.1. Effective Date. This Amendment shall become effective as
of the date first above written when and only when:

             (a) Agent shall have received all of the following, at Agent's
office, duly executed and delivered and in form and substance satisfactory to
Agent, all of the following:

                (i)   this Amendment;

                (ii)  a Consent of Guarantor in the form attached hereto;

                (iii) a certificate of the President and Secretary of Borrower
                      dated the date of this Amendment certifying as to certain
                      corporate matters and that all of the representations and
                      warranties set forth in Article IV hereof are true and
                      correct at and as of the time of such effectiveness;

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                (iv)  the Amendment Fee described in Section 3.1;

                (v)   a First Amendment to Security Agreement dated the date of
                      this Amendment;

                (vi)  UCC-1 financing statements naming Borrower, as debtor, and
                      Agent, as secured party, covering the Remittance Account,
                      to be filed with the Secretary of State of Arizona and the
                      Secretary of State of Texas;

                (vii) an Acknowledgment Agreement among Borrower, Agent, and
                      Bank One, Arizona, N.A.;

                (viii) such other supporting documents as Agent may reasonably
                      request;

         (b) Borrower shall have paid, in connection with such Loan Documents,
all recording, handling, amendment and other fees required to be paid to Agent
pursuant to any Loan Documents; and

         (c) Borrower shall have paid, in connection with such Loan Documents,
all other fees and reimbursements to be paid to Agent pursuant to any Loan
Documents, or otherwise due Agent and including fees and disbursements of
Agent's attorneys.

                                   ARTICLE V.

                         Representations and Warranties

                Section 5.1. Representations and Warranties of Borrower. In
order to induce Agent to enter into this Amendment, Borrower represents and
warrants to Agent that:

                             (a) The representations and warranties contained in
                Article V of the Original Agreement, are true and correct at and
                as of the time of the effectiveness hereof except to the extent
                that the facts upon which such representations are based have
                been changed by transactions and events expressly permitted by
                the Credit Agreement.

                             (b) Borrower is duly authorized to execute and
                deliver this Amendment and will continue to be duly authorized
                to borrow and to perform its obligations under the Credit
                Agreement. Borrower has duly taken all corporate action
                necessary to authorize the execution and delivery of this
                Amendment and to authorize the performance of its obligations
                hereunder and thereunder.

                             (c) The execution and delivery by Borrower of this
                Amendment, the performance by Borrower of its obligations
                hereunder and the consummation of the transactions contemplated
                hereby do not and will not conflict with any provision of law,
                statute, rule or any of its organizational documents, or of any
                material agreement,

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                judgment, license, order or permit applicable to or binding upon
                it, or result in the creation of any lien, charge or encumbrance
                upon any assets or properties or any of its assets. Except for
                those which have been duly obtained, no consent, approval,
                authorization or order of any court or governmental authority or
                third party is required in connection with the execution and
                delivery by Borrower of this Amendment or to consummate the
                transactions contemplated hereby.

                             (d) When duly executed and delivered, each of this
                Amendment and the Credit Agreement will be a legal and binding
                obligation of Borrower, enforceable in accordance with its
                terms, except as limited by bankruptcy, insolvency and similar
                laws applying to creditors' rights generally and by principles
                of equity applying to creditors' rights generally.

                             (e) The audited annual Consolidated financial
                statements of Borrower dated as of March 31, 1999 and the
                unaudited quarterly Consolidated financial statements of
                Borrower dated as of December 31, 1999 fairly present the
                Consolidated financial position at such dates and the
                Consolidated statement of operations and the changes in
                Consolidated financial position for the periods ending on such
                dates for Borrower. Copies of such financial statements have
                heretofore been delivered to each Lender. Since such dates no
                Material Adverse Change has occurred in the financial condition
                or businesses or in the Consolidated financial condition or
                businesses of Borrower.

                             (f) Attached hereto as Schedule 1 is a true,
                correct, and complete list of each Dental Practice Advance made
                by Borrower on or prior to the date hereof which has not been
                repaid in full.

                                   ARTICLE VI.

                                  Miscellaneous

         Section 6.1. Ratification of Agreements. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. The Loan
Documents, as they may be amended or affected by this Amendment are hereby
ratified and confirmed in all respects. Any reference to the Credit Agreement in
any Loan Document shall be deemed to refer to this Amendment also. The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
Agent under the Credit Agreement or any other Loan Document nor constitute a
waiver of any provision of the Credit Agreement or any other Loan Document.

         Section 6.2. Survival of Agreements. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Loan, and shall further survive until
all of the Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by Guarantor or Borrower hereunder or
under

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the Credit Agreement to Agent shall be deemed to constitute representations and
warranties by, or agreements and covenants of, such Person under this Amendment
and under the Credit Agreement.

         Section 6.3. Release of Claims. Borrower hereby releases and forever
discharges Agent, together with its employees, agents, attorneys, officers, and
directors (all of the foregoing hereinafter called the "Released Parties"), from
any and all actions and causes of action, judgments, executions, suits, debts,
claims, demands, liabilities, obligations, damages and expenses of any and every
character, known or unknown, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter accruing, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the date hereof, and in any way
directly or indirectly arising out of or in any way connected to the Original
Agreement, including but not limited to claims of usury (although no such claims
are known to exist) (all of the foregoing hereinafter called the "Released
Matters"). Borrower acknowledges that the agreements in this Section 5.3 are
intended to cover and be in full satisfaction for all or any alleged injuries or
damages arising in connection with the Released Matters herein compromised and
settled.

         Section 6.4. Loan Documents. This Amendment is a Loan Document, and all
provisions in the Credit Agreement pertaining to Loan Documents apply hereto and
thereto.

         Section 6.5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and any applicable
laws of the United States of America in all respects, including construction,
validity and performance.

         Section 6.6. Counterparts; fax. This Amendment may be separately
executed in counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Amendment. This Amendment may be validly executed by facsimile or
other electronic transmission.

         THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>   14
         IN WITNESS WHEREOF, this Amendment is executed as of the date first
above written.

                                    PENTEGRA DENTAL GROUP, INC.
                                    Borrower

                                    By: _________________________________
                                           James M. Powers, Jr.
                                           President & Chief Executive Officer

                                    BANK ONE, TEXAS, N.A.
                                    Agent and Lender

                                    By: _________________________________
                                           Bonnie D. Wilson
                                           Vice President
<PAGE>   15

                                                                      SCHEDULE 1

                            DENTAL PRACTICE ADVANCES

<PAGE>   16

                                                               [THIRD AMENDMENT]

                              CONSENT AND AGREEMENT

         Pentegra Investments, Inc., a Delaware corporation, hereby (i) consents
to the provisions of this Amendment and the transactions contemplated herein and
(ii) ratifies and confirms the Guaranty dated as of June 1, 1998 made by it for
the benefit of Bank One Texas, N.A. and any other Lenders that become parties to
the Credit Agreement ("Guaranty") and (iii) agrees that all of its respective
obligations and covenants thereunder (to the extent it is a party thereto) shall
remain unimpaired by the execution and delivery of the Amendment and the other
documents and instruments executed in connection therewith and that the Guaranty
shall remain in full force and effect.

         THIS CONSENT AND AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

         IN WITNESS WHEREOF, this Consent and Agreement is executed by the
undersigned and is made effective as of June 1, 2000.

                                           PENTEGRA INVESTMENTS, INC.

                                           By: ________________________________
                                               Sam H. Carr
                                               Senior Vice PresidentEXHIBIT 4.1

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

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

                            FINE AIR SERVICES CORP.,
                                   As Issuer;

                            FINE AIR SERVICES, INC.,
                           AGRO AIR ASSOCIATES, INC.,
                              ARROW AIR, INC., and
                            FINE/AAA INTERAIR, INC.,
                            As Subsidiary Guarantors;

                                       AND

                              THE BANK OF NEW YORK,
                                   As Trustee

                          FIRST SUPPLEMENTAL INDENTURE

                            DATED AS OF JUNE 30, 2000

                    TO THE INDENTURE DATED AS OF JUNE 5, 1998

                       $200,000,000 SERIES A AND SERIES B

                          9-7/8% SENIOR NOTES DUE 2008

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

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

<PAGE>
                                      -2-

                          FIRST SUPPLEMENTAL INDENTURE

         This FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of June 30, 2000, is among FINE AIR SERVICES CORP., a Delaware
corporation (the "Company"), FINE AIR SERVICES, INC. ("FASI"), AGRO AIR
ASSOCIATES, INC. ("Agro"), ARROW AIR, INC. ("Arrow"), and FINE/AAA INTERAIR,
INC. ("AAA;" and, together with FASI, Agro and Arrow, the "Subsidiary
Guarantors") and THE BANK OF NEW YORK, as Trustee (the "Trustee"), and amends
and supplements that certain Indenture (the "Existing Indenture;" the Existing
Indenture, as amended by this Supplemental Indenture, and as further amended,
supplemented or modified pursuant to Article IX of the Indenture, being
hereinafter referred to as the "Indenture"), dated as of June 5, 1998, pursuant
to which the Company originally issued $200,000,000 in principal amount of its
9-7/8% Senior Notes due 2008 (the "Existing Notes;" and, as amended pursuant to
the terms of this Supplemental Indenture and the Restructuring Agreement, and as
thereafter amended and modified as permitted by Article IX of the Indenture, the
"Notes").

                                    RECITALS

         WHEREAS, the Company, Arrow and AAA wish for Arrow and AAA to enter
into this Supplemental Indenture to become Subsidiary Guarantors as required by
Section 4.18 of the Existing Indenture; and

         WHEREAS, the Company and the Subsidiary Guarantors wish to grant Liens
and security interests in certain of their assets and properties as collateral
to the Trustee, for the equal and ratable benefit of the Holders, to secure the
Indebtedness of the Company and the Subsidiary Guarantors under the Notes and
their obligations under the Indenture; and

         WHEREAS, the Company and the Subsidiary Guarantors wish to make the
other changes to the Existing Indenture and the Existing Notes which are
provided herein; and

         WHEREAS, the Holders of all of the outstanding Existing Notes have
consented to the modification of the terms of the Existing Notes to be the terms
of the Notes set forth in Exhibit A hereto; and

          WHEREAS, the Holders of all of the outstanding Existing Notes have
directed the Trustee to enter into this Supplemental Indenture, and the Trustee
is willing to enter into this Supplemental Indenture; and

         WHEREAS, all the requirements of law and of the Existing Indenture have
been fully complied with and all other acts and things necessary to make the
Notes

<PAGE>
                                      -3-

and the Indenture (in each case, as amended by this Supplemental Indenture)
valid, binding and legal instruments have been done and performed;

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Subsidiary Guarantors and the Trustee hereby agree, for the equal and ratable
benefit of the Holders of the Notes, as follows:

1.   CONSTRUCTION.

         1.1      Defined Terms; Rules of Construction.

         Capitalized terms used and not defined herein shall have the same
meanings given to them in the Existing Indenture. The provisions of Section 1.03
and 1.04 of the Existing Indenture expressly apply to this Supplemental
Indenture, mutatis mutandis. In the event of any conflict between the terms of
this Supplemental Indenture and the TIA, the TIA shall control.

         1.2      Merger with Indenture.

         This Supplemental Indenture is supplemental to the Existing Indenture
and does and shall be deemed to form a part of, and shall be construed in
connection with and as a part of, the Indenture for any and all purposes.

         1.3      Effectiveness.

         This Supplemental Indenture shall become effective immediately upon its
execution and delivery by each of the Company, the Subsidiary Guarantors and the
Trustee.

         1.4      Governing Law.

         THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

<PAGE>
                                      -4-

2.   ASSUMPTION OF GUARANTY BY ARROW AND AAA.

         2.1      Arrow and AAA Subject to Indenture.

         Each of Arrow and AAA expressly agrees that it is, and hereafter shall
be, a Subsidiary Guarantor, that it expressly assumes the Subsidiary Guarantee
and that it is subject in all respects to the provisions of the Indenture to the
extent provided in Article X thereof.

         2.2      No Release.

         By virtue of the agreements of Arrow and AAA in Section 2.1 of this
Supplemental Indenture, neither the Company nor any other Subsidiary Guarantor
shall be relieved of any obligation pursuant to the Notes, the Subsidiary
Guarantee or otherwise pursuant to the Indenture.

3.   DECLARATION OF TRUST FOR THE SECURITIES.

         3.1      The Trust Estate.

         The Trustee does hereby declare (and each of the Company and each
Subsidiary Guarantor hereby consents thereto) that it holds as trustee in trust
under the Indenture all of the right, title and interest of the Trustee in, to
and under the following (such right, title and interest of the Trustee is
referred to herein, collectively, as the "Trust Estate"):

                  (a)   each Collateral Document;

                  (b)   all of the Collateral;

                  (c)   each Collateral Payment and other amount of cash held
         by the Trustee for the benefit of the Holders; and

                  (d)   any and all other property and any and all other rights,
         interests, privileges and positions granted to the Trustee in
         accordance with the provisions hereof and pursuant to or in connection
         with the provisions of the Collateral Documents;

to have and to hold all and singular, the Trust Estate as security for, and as
additional sources of payment of, all Note Obligations (as hereinafter defined),
and for the uses and purposes and subject to the terms and provisions set forth
in the Indenture; in trust, nevertheless, under and subject to the terms and
conditions herein set forth and for the benefit of the Holders and for the
enforcement of the

<PAGE>
                                      -5-

prompt and complete payment when due of, and performance and
observance of, all Note Obligations.

4.   AMENDMENTS TO THE INDENTURE.

         4.1      Declaration of Trust.

         The Existing Indenture is hereby amended by adding the following
Declaration of Trust immediately following the third introductory paragraph
thereof and immediately preceding the heading of Article I:

                  "The Trustee does hereby declare (and each of the Company and
         each Subsidiary Guarantor hereby consents thereto) that it holds as
         trustee in trust under this Indenture all of the right, title and
         interest of the Trustee in, to and under the following (such right,
         title and interest of the Trustee is referred to herein, collectively,
         as the "Trust Estate"):

                           "(a)   each Collateral Document;

                           "(b)   all of the Collateral;

                           "(c)   each Collateral Payment and other amount of
                  cash held by the Trustee for the benefit of the Holders; and

                           "(d)   any and all other property and any and all
                  other rights, interests, privileges and positions granted to
                  the Trustee in accordance with the provisions hereof and
                  pursuant to or in connection with the provisions of the
                  Collateral Documents;

                  "TO HAVE AND TO HOLD all and singular, the Trust Estate as
         security for, and as additional sources of payment of, the Note
         Obligations, and for the uses and purposes and subject to the terms and
         provisions set forth in this Indenture;

                  "IN TRUST NEVERTHELESS, under and subject to the terms and
         conditions herein set forth and for the benefit of the Holders and for
         the enforcement of the prompt and complete payment when due of, and
         performance and observance of, all Note Obligations; and

                  "IT IS HEREBY FURTHER COVENANTED AND AGREED that the Trust
         Estate is to be held and applied by the Trustee subject to the further
         covenants, conditions, uses and trusts hereinafter set forth:"

<PAGE>
                                      -6-

         4.2      Additions to Section 1.01.

         Section 1.01 of the Existing Indenture is amended by adding the
following definitions in their proper alphabetical order:

                  "'Collateral' means those assets and properties owned by the
         Issuer and Subsidiary Guarantors which are listed or otherwise
         described on Schedule 1.01 attached hereto."

                  "'Collateral Documents' means the documents listed on Schedule
         1.01(a) attached hereto; the documents to be executed in connection
         with the Hushkit Loan which shall be entered into by the Trustee upon
         written direction of the Majority Note Holders and receipt of an
         Officer's Certificate and an Opinion of Counsel (with respect to the
         documents to be executed between the Trustee, the Company or any
         Restricted Subsidiary in connection with the Hushkit Loan), which
         documents shall be in form satisfactory to the Trustee; and all other
         mortgages, pledge agreements, security agreements and other similar
         agreements and conveyances executed or required to be executed by the
         Company or any Restricted Subsidiary pursuant to Section 4.21."

                  "'Collateral Payments' means any cash amounts received by the
         Trustee, the Company or any Subsidiary Guarantor as payments in respect
         of the Collateral, whether resulting from a sale or transfer of
         Collateral (whether or not constituting an Asset Sale), from an Event
         of Loss, or from the enforcement or exercise of any rights of the
         Trustee or the Holders under any Collateral Documents, or otherwise
         constituting Collateral or the proceeds thereof; provided, however,
         that, so long as no Event of Default shall have occurred and be
         continuing, the term "Collateral Payments" shall not mean or include
         any cash amounts received or receivable by the Company or any
         Subsidiary Guarantor in respect of their use or operation of the
         Collateral in the ordinary course of business."

                  "'Company Order' means a written request of the Company,
         executed by an Officer of the Company, and directed to the Trustee."

                  "'Event of Loss' means and includes any loss, theft, seizure
         of possession or title (including governmental requisition), damage,
         destruction, or taking or other eminent domain action with respect to
         any of the Collateral."

<PAGE>
                                      -7-

                  "'Fiscal Year' means the 12 month period ending on December 31
         of each year or such other fiscal year as may be adopted by the Issuer
         from time to time. Upon any change in the Issuer's Fiscal Year, any
         provisions herein that set forth limits that are applicable to a Fiscal
         Year shall be deemed to be prorated as appropriate to reflect the
         change in the Issuer's Fiscal Year.

                  "'Hushkit Collateral' means, as to the following airframes,
         the 16 engines attached thereto and related hushkits financed by the
         Hushkit Loan:

                           "(a)   DC8-62, registration number N1804;

                           "(b)   DC8-62, registration number N810BN;

                           "(c)   DC8-62, registration number N802BN; and

                           "(d)   DC8-63, registration number N4935C; provided,
                  however, that the Lien granted or to be granted on such DC8-63
                  securing the Hushkit Loan shall be released in the event that
                  the Company has determined on or prior to December 31, 2000,
                  not to finance the purchase of the hushkit to install on such
                  airframe with the proceeds of the Hushkit Loan."

                  "'Hushkit Loan' means the financing and refinancing of the
         acquisition of up to four (4) hush kits, to be funded on or before
         August 31, 2000 pursuant to that certain lease facility providing up to
         $10.2 million of financing, which financing is payable over a term of
         approximately 60 months, pursuant to a Lease Facility Agreement between
         Equity Merchant Banking Corporation L.C., for itself and as agent, as
         lessor, and Agro Air Associates, Inc., as lessee, and the other
         documents executed and delivered in connection therewith, and any
         amendments, modifications or refinancings thereof that do not increase
         the Indebtedness or obligations of Agro Air Associates, Inc.
         thereunder."

                  "'Majority Note Holders' means, at any time, the Holders of a
         majority of the principal amount of the Notes then outstanding.

                  "'Non-Core Assets' means (a) spare parts, gas turbine engines
         and other fixed assets (excluding airframes) that are not, at the time
         of any determination of which assets are Non-Core Assets, being used by
         the Company or any of its Restricted Subsidiaries in the ordinary
         course of the operations of their business and which the Board of

<PAGE>
                                      -8-

         Directors of the Company has determined in good faith, on or after June
         30, 2000, will not be needed or used by the Company or any of its
         Restricted Subsidiaries, (b) the L1011-500 aircraft, registration
         number N596AH, serial number 193J-1196, the parts of which the Company
         intends to cause to be sold, and (c) those of the airframes listed on
         Schedule 1.01(b) attached hereto which, as of the date of
         determination, are not airworthy and can not be flown.

                  "'Non-Core Retention Amount' means (a) up to $12,500,000 of
         proceeds from the sale of Non-Core Assets between July 1, 2000 and
         December 31, 2000, and (b) during each subsequent Fiscal Year, up to
         the sum of (i) $5,000,000 of proceeds from the sale of Non-Core Assets,
         plus (ii) the lesser of (x) the amount by which the amount of Non-Core
         Assets sold in the preceding Fiscal Year was less than the Non-Core
         Retention Amount applicable to such Fiscal Year, or (y) $5,000,000
         (except that, with respect to the sale of Non-Core Assets during the
         2001 Fiscal Year, the amount under this clause (y) shall be
         $12,500,000), in each case regardless of whether some or all of the
         proceeds constitute Collateral Payments and regardless of whether the
         transaction that generated such proceeds constituted an Asset Sale.

                  "'Note Obligations' means and includes:

                           "(a) the principal of, premium, interest and
                  Liquidated Damages, if any, on the Notes, whether due at the
                  maturity thereof, by acceleration, redemption or otherwise,
                  and interest on the overdue principal of and interest and
                  Liquidated Damages, if any, and the premium, if any, on the
                  Notes, if any, to the extent lawful;

                           "(b) all other Obligations of the Company to the
                  Holders or the Trustee under the Indenture;

                           "(c) all obligations and liabilities of each
                  Subsidiary Guarantor pursuant to Article X; and

                           "(d) the performance of the respective covenants of
                  the Company and the Subsidiary Guarantors herein and in each
                  of the Collateral Documents contained;

         "in each case, whether or not such obligations and liabilities are
         reduced to judgment, liquidated, unliquidated, evidenced by any note or
         other instrument, direct or indirect, absolute or contingent, due or to
         become due, disputed, undisputed, legal, equitable, secured or

<PAGE>
                                      -9-

         unsecured, and whether or not any such obligations and liabilities are
         discharged, stayed or otherwise affected by any proceeding."

                  "'Replacement Asset' means any asset (including capitalized
         maintenance) which is purchased or otherwise acquired or manufactured
         by the Issuer or any Restricted Subsidiary in exchange, substitution or
         replacement for any of the Collateral."

                  "'Restructuring Agreement' means the Restructure Agreement
         dated as of June 30, 2000 among the Company, the Subsidiary Guarantors
         and the Holders with respect to the Indenture and the Notes."

         4.3      Amendments to Section 1.01.

                  (a) Amendment of Definition of "Asset Sale." Clause (vii) of
         the second sentence of the definition of "Asset Sale" in Section 1.01
         of the Existing Indenture is amended in its entirety to read as
         follows:

                           "(vii) so long as no Default or Event of Default
                  shall occur and shall be continuing, any transfers that, but
                  for this clause (vii) would be Asset Sales, if after giving
                  effect to such transfers, the aggregate fair market value of
                  the properties or assets transferred in such transaction or
                  any such series of related transactions does not exceed
                  $500,000."

         The remainder of the definition of "Asset Sale" shall remain unchanged.

                  (b) Amendment of Definition of "Permitted Indebtedness." The
         definition of "Permitted Indebtedness" in the Existing Indenture is
         hereby amended by deleting the word "and" following the semicolon in
         clause (viii) of such definition; replacing the period at the end of
         clause (ix) thereof with the phrase "; and"; and adding, immediately
         following such new phrase the following:

                           "(x) Indebtedness outstanding in respect of the
                  Hushkit Loan; provided, however, that:

                                    "(A) the aggregate principal amount of such
                           Indebtedness shall not exceed $10,200,000;

                                    "(B) the principal amount of such
                           Indebtedness drawn for the hushkit/conversion of
                           DC8-63, registration number N4935C, serial number
                           45931, shall not exceed

<PAGE>
                                      -10-

                           the lesser of (x) $2,295,000, or (y) the aggregate
                           purchase price of such hush kit; and

                                    "(C) the aggregate principal amount of such
                           Indebtedness in excess of the sum of:

                                             "(I) the amount set forth in the
                                    immediately preceding clause (B); plus

                                            "(II) the amount actually expended
                                    to complete the purchase from Burbank
                                    Aeronautical Corporation III of hush kit No.
                                    94 to be installed on the engines used on
                                    aircraft DC8-62, registration number N810BN;

                           shall not at any time exceed $5,610,000."

         The remainder of the definition of "Permitted Indebtedness" shall
remain unchanged.

         (c) Amendment of Definition of "Permitted Liens." The definition of
"Permitted Liens" in the Existing Indenture is hereby amended by deleting the
word "and" following the semicolon in clause (x) of such definition, deleting
clause (xi) of such definition in its entirety and adding after the remaining
portion of clause (x) of such definition the following:

                           "(xi)  Liens securing the Note Obligations;

                           "(xii) Liens, solely on the Hushkit Collateral,
                  securing the Hushkit Loan, which Liens will have priority over
                  the Liens securing the Note Obligations;

                           "(xiii) Liens existing on the date hereof which are
                  listed on Schedule 1.01(c) attached hereto, provided that such
                  Liens secure only such Indebtedness incurred pursuant to a
                  loan or credit facility in effect on June 30, 2000 in an
                  amount not exceeding the maximum amount of Indebtedness which
                  can be incurred under such existing facility, or is or can be
                  incurred in connection with the restatement, amendment or
                  refinancing of any such existing loan or credit facility, up
                  to but not in excess of the maximum amount of Indebtedness
                  which can be incurred under the existing facility being
                  restated, amended or refinanced; and

<PAGE>
                                      -11-

                           "(xiv) Liens, other than the Liens referred to in
                  clauses (i) through (xiii) above, on assets acquired by the
                  Company or any Restricted Subsidiary after the date hereof and
                  not constituting Replacement Assets; provided, that the sum of
                  the aggregate amount of all Indebtedness secured by such
                  additional Liens and the Permitted Liens referred to in
                  clauses (xi), (xii) and (xiii) above, shall not exceed the
                  result of (a) the sum of (x) the Company's Consolidated
                  Tangible Assets, plus (y) $20.0 million, minus (b) the sum of
                  (x) the total amount of outstanding Senior Unsecured Debt,
                  plus (y) the total amount of the Note Obligations."

         The remainder of the definition of "Permitted Liens" shall remain
unchanged.

         4.4      Addition to Article II.

         Article II of the Existing Indenture shall be amended by adding at the
end thereof a new Section 2.17, which shall read in its entirety as follows:

                  "Section 2.17     Capitalization of June 1, 2000, Interest

                  "Notwithstanding any other provision of this Indenture to the
         contrary, the Company, each Subsidiary Guarantor and the Trustee shall
         comply, and the Trustee shall cause the Paying Agent and the Registrar
         to comply, with Section 5.3 of that First Supplemental Indenture, dated
         as of June 30, 2000, among the Company, the Subsidiary Guarantors and
         the Trustee."

         4.5      Amendment to Section 4.02.

         Section 4.02 of the Existing Indenture shall be amended and restated in
its entirety to read as follows:

                  "(a) Following the earlier of the effective date of the
         Exchange Offer Registration Statement and the effective date of the
         Shelf Registration Statement (if any), whether or not required by the
         rules and regulations of the Commission, so long as any Notes are
         outstanding, the Company will file with the Commission, to the extent
         such filings are accepted by the Commission, all quarterly and annual
         reports and other information, documents and reports that the Company
         would be required to file if it were subject to Section 13 or 15(d) of
         the Exchange Act. The Company will also (i) file with the Trustee (with
         exhibits), and provide to each Holder (without exhibits), without cost
         to that Holder, copies of such reports and documents

<PAGE>
                                      -12-

         within 15 days after the date on which the Company files such reports
         and documents with the Commission or the date on which the Company
         would be required to file such reports and documents if the Company
         were subject to Section 13 or 15(d) of the Exchange Act and (ii) if
         filing such reports and documents with the Commission is not accepted
         by the Commission or is prohibited under the Exchange Act, supply at
         its cost copies of such reports and documents (including any exhibits
         thereto) to any Holder promptly on its written request. For so long as
         any Notes remain outstanding, the Company will also furnish to the
         Holders and beneficial holders of Notes and to prospective purchasers
         of Notes designated by the Holders of Transfer Restricted Securities
         (as defined in the Registration Rights Agreement) and to
         broker-dealers, on their request, the information required to be
         delivered pursuant to Rule 144A(d)(4) under the Securities Act.
         Following June 30, 2000, whether or not required by the rules and
         regulations of the Commission, so long as any Notes are outstanding,
         the Company and each Subsidiary Guarantor, in addition to complying
         with the requirements of this Section 4.02(a) and Section 4.03, shall
         comply in every other respect with section 314(a) of the TIA.

                  "(b) Promptly after the execution and delivery of each
         Collateral Document, and at least annually following June 30, 2000, the
         Company, each Subsidiary Guarantor and any other obligor on the Notes
         shall provide to the Trustee the Opinion of Counsels regarding the
         recording and filing of such documents required by section 314(b) of
         the TIA. The Company, each Subsidiary Guarantor and any other obligor
         on the Notes also shall provide to the Trustee each and all of the
         reports, Opinions of Counsel, certificates, reports or opinions of
         accountants, engineers, appraisers or other professionals and other
         evidence of compliance required by section 314(c) and section 314(d) of
         the TIA.

         4.6      Additions to Article IV.

         Article IV of the Existing Indenture shall be amended by adding to the
end of such Article IV a new Section 4.19, a new Section 4.20, a new Section
4.21, and a new Section 4.22 each to read in its entirety as follows:

                  "Section 4.19.    Application of Collateral Payments.

                  "Notwithstanding the provisions of Section 4.16 hereof or any
         other provision of this Indenture or of any document executed or
         delivered pursuant to the terms hereof, except as otherwise expressly
         provided in this Section 4.19 or in Section 4.20:

<PAGE>
                                      -13-

         "(a) without the prior written consent of the Majority Note Holders,
         neither the Company nor any Restricted Subsidiary shall sell or
         transfer any of the Collateral except in consideration for the payment
         in cash of the fair market value of such Collateral (the determination
         of which, at any time that an Event of Default shall not have occurred
         and be continuing, may be made in good faith by the Board of Directors
         unless the Collateral that is being sold in one transaction or a series
         of related transactions has a fair market value or book value in excess
         of $25,000,000; if the fair market value or book value of the
         Collateral being sold is in excess of $25,000,000, then the sale shall
         not be made unless the Majority Note Holders concur in such
         determination by the Board of Directors of the Company as to such fair
         market value);

         "(b) if the Company or any Restricted Subsidiary receives any
         Collateral Payment, then the Company or that Restricted Subsidiary, as
         the case may be, shall, except for such amounts, if any, as the Company
         is permitted to retain therefrom pursuant to Section 4.20 hereof, pay
         all of such Collateral Payments to the Trustee (net, in the case of
         sale proceeds, of expenses of closing the transaction);

         "(c) if the Trustee receives any payment pursuant to subsection (b) of
         this Section 4.19 or if the Trustee otherwise receives any Collateral
         Payment (except for such amounts, if any, as the Company is permitted
         to receive therefrom pursuant to Section 4.20 hereof), the Trustee
         shall promptly apply the amount received by the Trustee to the Note
         Obligations in accordance with the provisions of Section 6.10;
         provided, however, that if no Event of Default shall have occurred and
         be continuing, then the Trustee shall not apply such Collateral Payment
         to the Note Obligations until after the expiration of at least
         forty-five (45) days from the receipt thereof by the Trustee, and if:

                           "(i) the Company shall commit, by notice to the
                  Trustee and the Holders given within forty-five (45) days
                  after the earlier of (x) receipt of such Collateral Payment by
                  the Trustee pursuant to subsection (b) or this subsection (c),
                  or (y) receipt of such Collateral Payment by the Company or
                  any Restricted Subsidiary, to invest all or any part of such
                  Collateral Payment in the purchase of properties or assets
                  that replace the properties or assets that generated the
                  Collateral Payment, or in airframes, engines, related fixed
                  assets or other fixed assets that are being, or will be, used
                  in the business of the Company and its Restricted Subsidiaries
                  or in a Related Business (together

<PAGE>
                                      -14-

                  with any short-term assets incidental thereto) within 180 days
                  after the receipt of such Collateral Payment;

                           "(ii) no Default or Event of Default shall be
                  continuing on the date such investment is to be made;

                           "(iii) the Company or such Restricted Subsidiary
                  shall grant in favor of the Trustee a first priority perfected
                  Lien in the new properties or assets in which it invests
                  pursuant to such commitment; and

                           "(iv) the Company shall deliver an Officers'
                  Certificate to the Trustee describing the terms of such
                  investment and the date (which shall in all cases, be not more
                  than 180 days after the date that such Collateral Payment was
                  received) of such proposed investment and stating that no
                  Default or Event of Default is continuing;

         "then the Trustee shall pay to the Company (or to such Restricted
         Subsidiary as may be designated by the Company) on the date of such
         proposed investment, for the sole purpose of making such investment, an
         amount not exceeding the lesser of the amount of the proposed
         investment and the amount of the cash portion of the applicable
         Collateral Payment. The amount of the Collateral Payments not so
         invested as provided above in the foregoing proviso shall also be
         applied to the Note Obligations in accordance with the provisions of
         Section 6.10 on the 181st day following the receipt by the Company,
         such Restricted Subsidiary or the Trustee of such sale proceeds or
         other Collateral Payment. Pending application of such Collateral
         Payments pursuant to this Section 4.19, the Trustee shall invest such
         Collateral Payments in Cash Equivalents.

                  "In the case of any event that generates a Collateral Payment,
         all Liens of the Trustee upon the applicable Collateral shall be deemed
         to continue in all Collateral Payments, all other proceeds of the sale
         or other disposition of such Collateral, and all assets acquired by the
         reinvestment of such Collateral Payments, and the Company and each
         Restricted Subsidiary shall comply with the provisions of this Section
         4.19 and Section 4.21 with respect to the Lien in such proceeds. Upon a
         Company Order, accompanied, if reasonably requested by the Trustee, by
         an Officers' Certificate and Opinion of Counsel to the effect that the
         conditions set forth in this Indenture for the release of such Liens
         has been satisfied and that the Company or such Restricted Subsidiary
         has complied with the provisions of this Section 4.19, Section 4.20,
         and Section 4.21 with respect to the Collateral Payments

<PAGE>
                                      -15-

         and any reinvestment thereof, the Trustee shall execute such
         instruments and documents as the Company shall reasonably request to
         effectuate the release of record of such Liens and reconveyance of such
         Collateral so disposed of.

                  "Notwithstanding the foregoing provisions of this Section 4.19
         and any other provisions of this Indenture (but subject to the
         provisions of the next paragraph), if the Trustee receives any
         Collateral Payment after the Notes have become due and payable pursuant
         to Section 6.02 (and so long as any declaration by the Holders to such
         effect pursuant to Section 6.02(a) has not been rescinded pursuant to
         Section 6.02(c)), then such Collateral Payments shall be applied (and
         if the Company or any Restricted Subsidiary receives any Collateral
         Payment after the Notes have become due and payable pursuant to Section
         6.02 (and so long as any declaration by the Holders to such effect
         pursuant to Section 6.02(a) has not been rescinded pursuant to Section
         6.02(c)), then the Company or that Restricted Subsidiary, as the case
         may be, shall pay all of such Collateral Payment to the Trustee for
         application) in accordance with the provisions of Section 6.10.

                  "Notwithstanding the foregoing provisions of this Section 4.19
         and any other provisions of this Indenture, nothing in this Section
         4.19 is intended to apply to Collateral Payments constituting proceeds
         of the Hushkit Collateral until all of the obligations of the Issuer
         and the Subsidiary Guarantors under the Hushkit Loan have been paid in
         full (but this Section 4.19 shall apply to the amount of any Collateral
         Payments that are in excess of such amount as is necessary in order for
         all of the obligations of the Issuer and the Subsidiary Guarantors
         under the Hushkit Loan to have been paid in full)."

                  "Section 4.20.    Proceeds from Sales of Non-Core Assets.

                  "If the Company or any Restricted Subsidiary receives any
         proceeds from the sale of Non-Core Assets (regardless of whether such
         Non-Core Assets are Collateral and regardless of whether the sale is an
         Asset Sale) so long as no Event of Default shall have occurred and
         shall be continuing, the Company or such Restricted Subsidiary may
         retain, for use in its business, up to the amount by which (a) the
         Non-Core Retention Amount exceeds (b) the amounts previously retained
         by the Company and its Restricted Subsidiaries in the aggregate from
         sales of Non-Core Assets during the applicable Fiscal Year of the
         Company. Any amounts that are in excess of the amounts that the Company
         and its Restricted Subsidiaries are permitted to use pursuant to this
         Section 4.20 (or with respect to which this Section

<PAGE>
                                      -16-

         4.20 is not relevant) shall be paid, delivered or used in accordance
         with Section 4.16 with respect to Asset Sales relating to assets that
         are not Collateral and Section 4.19 with respect to Collateral
         Payments. Neither the Company nor any of its Restricted Subsidiaries
         shall sell any Non-Core Assets which are included in the Collateral
         unless (i) such sale is in compliance with Section 4.19(a) and (ii)
         with respect to sales of airframes, prior to consummating such sale,
         the Company shall deliver to the Trustee and to the Holders a written
         notice describing the terms of such sale and the identity of the
         purchaser, and certifying that the assets that are to be sold are
         Non-Core Assets, as defined herein. Each month, commencing with July,
         2000, the Issuer shall give to the Trustee and the Holders a written
         notice listing all sales of Non-Core Assets that occurred during the
         preceding month, which notice shall describe the terms of each such
         sale and set forth the identity of the purchaser.

                  "Section 4.21.    Maintenance of Liens; Further Assurances.

                  "The Company shall at all times take all action necessary to
         maintain the Liens provided for under or pursuant to the Collateral
         Documents as valid and perfected Liens on the property intended to be
         covered thereby (subject only to Permitted Liens) and supply all
         information to the Trustee necessary for such maintenance. The Company
         will provide to the Trustee and each of the Holders on an annual basis,
         commencing with the first anniversary of this Indenture, an Opinion of
         Counsel as required by section 314(b)(2) of the TIA and an Officer's
         Certificate stating what filings or other actions are required to be
         made or taken by the Trustee or the Company during the next twelve
         months so as to maintain the perfection and priority of all Liens
         provided for under or pursuant to the Collateral Documents. The Company
         and each Subsidiary Guarantor hereby agree that, with the consent of
         the Majority Note Holders, any Holder may make filings of continuation
         statements under the Uniform Commercial Code of any jurisdiction, as
         required to maintain the perfection of any Lien created under the
         Collateral Documents, and the Trustee agrees (a) to execute any such
         continuation statements as are prepared by or at the direction of any
         such Holder and delivered to the Trustee for execution, and (b) to
         cause such executed continuation statements to be delivered to such
         Holder for filing by such Holder. Neither the Trustee nor any Holder
         shall have any obligation to prepare any such continuation statement."

                  "Section 4.22.    Maintenance of Insurance.

<PAGE>
                                      -17-

                  "(a) The Company will maintain, and will cause each of its
         Restricted Subsidiaries to maintain, with reputable insurance
         companies, insurance on all the Collateral in at least such amounts and
         against at least such risks (including without limitation aviation
         risks) as are usually insured against in the same general area by
         prudent companies engaged in the same or a similar business; provided,
         however, that such insurance shall in any event:

                            "(i) insure the tangible Collateral against risk of
                  physical damage including, without limitation, loss by fire,
                  explosion, theft and such other casualties in an amount not
                  less than the replacement cost value thereof, less deductibles
                  to the extent customary for similar Persons engaged in similar
                  businesses, with all physical damage losses payable to the
                  Trustee, as its interests may appear; and

                           "(ii) otherwise comply with the insurance provisions
                  of each Collateral Document.

                  "(b) The Company will furnish to the Trustee on or prior to
         June 30, 2000 and annually thereafter:

                           "(i) a schedule describing all insurance maintained
                  by the Company and its Restricted Subsidiaries, which schedule
                  shall set forth for each insurance policy the policy number,
                  the scope of coverage, the policy limits and deductibles, the
                  insurer (and reinsurer, if applicable) and the expiration
                  date; and

                           "(ii) an Officer's Certificate certifying that such
                  insurance conforms in all material respects to all
                  requirements of the Indenture and the Collateral Documents (or
                  setting forth in reasonable detail any non-conformance and the
                  reasons therefor).

                  "(c) The Company will, and will cause each Restricted
         Subsidiary to, furnish to the Trustee original certificates of
         insurance containing signatures of duly authorized representatives of
         the insurer on the date hereof and at least 30 days prior to policy
         termination, cessation or cancellation.

                  "(d) The Company agrees that it shall, and shall cause each
         Restricted Subsidiary to, cause each insurer making payment in respect
         of any Event of Loss of any property of the Company or any of its
         Restricted Subsidiaries, and each Person making any payment in

<PAGE>
                                      -18-

         respect of the condemnation or any judgment in any eminent domain
         proceedings, to pay the Collateral Payment directly to the Trustee. The
         Company further agrees that, in the event it shall receive any
         Collateral Payment, it shall pay over such Casualty Loss Payment to the
         Trustee as soon as possible. The Trustee shall apply such Collateral
         Payments in accordance with Section 4.19.

         4.7      Amendments to Section 6.01.

                  (a) Amendments to Section 6.01(a)(iv). Section 6.01(a)(iv) of
         the Existing Indenture is amended and restated in its entirety to read
         as follows:

                                    "(iv) any failure of the Company or any
                           Restricted Subsidiary to perform or observe any other
                           term, covenant or agreement applicable to it and
                           contained in the Notes, this Indenture (other than a
                           default specified in clause (i), (ii) or (iii)
                           above), the Subsidiary Guarantees, any Collateral
                           Document or the Restructuring Agreement, as the case
                           may be, for a period of 30 days after written notice
                           of that failure is given (a) to the Company or the
                           Restricted Subsidiary, as the case may be, by the
                           Trustee or (b) to the Company or the Restricted
                           Subsidiary, as the case may be, and the Trustee by
                           the Holders of at least 25% in aggregate principal
                           amount of the Notes then outstanding;"

                  (b) Amendments to Section 6.01(a). Section 6.01(a)(viii) of
         the Existing Indenture is amended and restated in its entirety, and a
         new Section 6.01(a)(ix), a new Section 6.01(a)(x), a new Section
         6.01(a)(xi), a new Section 6.01(a)(xii), and a new Section
         6.01(a)(xiii) are added at the end thereof, in each case, to read as
         follows:

                           "(viii) except as permitted by this Indenture and the
                  Notes, the cessation of the effectiveness of any Subsidiary
                  Guarantee, any Collateral Document or the Restructuring
                  Agreement; or the repudiation by the Company or any Subsidiary
                  Guarantor (or by any Person acting on behalf of any Subsidiary
                  Guarantor) of its obligations under its Subsidiary Guarantee,
                  any of the Collateral Documents or the Restructuring
                  Agreement;

                           "(ix) any of the Liens created by the Collateral
                  Documents shall cease to be enforceable or shall not have the
                  priority purported to be created thereby (subject to Permitted

<PAGE>
                                      -19-

                  Liens and other than such failures which are expressly
                  permitted hereunder or under the Collateral Documents);

                           "(x) there shall occur the loss, theft, substantial
                  damage to or destruction of, or any other Event of Loss with
                  respect to, any portion of the Collateral not fully covered by
                  insurance (less applicable deductibles), which uncovered
                  portion of the Collateral by itself has a fair market value in
                  excess of $1,000,000 or with other such losses, thefts, damage
                  or destruction of uncovered portions of Collateral occurring
                  while this Indenture is in effect have an aggregate fair
                  market value in excess of $2,000,000;

                           "(xi) the failure in any material respect of any
                  representation or warranty made in any Collateral Document or
                  the Restructuring Agreement to be true when made; and

                           "(xii) the occurrence of an "Event of Default", as
                  such term is defined in any Collateral Document."

         4.8      Amendments to Section 6.03.

         Section 6.03 of the Existing Indenture is amended by designating the
existing text of Section 6.03 of the Existing Indenture to be subsection (a) of
such Section (and by adding the letter "(a)" immediately following the Section
heading and immediately before the text of such Section), and by adding the
following to the end of such Section as a new Section 6.03(b):

                  "(b) In addition to the exercise of all other rights and
         remedies permitted to be exercised by the Trustee hereunder, in the
         event that either:

                           "(i) the maturity of the Notes is accelerated in
                  accordance with the provisions of Section 6.02; or

                           "(ii) subject to Section 6.05, an Event of Default
                  has occurred and is continuing, and the Trustee is directed to
                  do so in writing by the Majority Note Holders;

         "then the Trustee shall proceed, subject to Section 6.05, to enforce
         the rights of the Trustee and the Holders of Securities pursuant to the
         provisions of the Collateral Documents. In no event may a Holder
         exercise any right or remedy with respect to any Collateral under any
         Collateral Document, such right of exercise being vested solely in the

<PAGE>
                                      -20-

         Trustee as herein provided and as provided in the Collateral
         Documents."

         4.9      Amendment to Section 6.08.

         Section 6.08 of the Existing Indenture is amended and restated in its
entirety to read as follows:

                  "If an Event of Default specified in Section 6.01(a)(i) or
         (a)(ii) occurs and is continuing, the Trustee is authorized to recover
         judgment in its own name and as trustee of an express trust against the
         Company (or any Subsidiary Guarantor or other obligor under the Notes)
         for:

                           "(i) principal, premium, if any, interest, if any,
                  and Liquidated Damages, if any, remaining unpaid on the Notes;

                           "(ii) interest on overdue principal and premium, if
                  any, and, to the extent lawful, interest;

                           "(iii) such further amount as shall be sufficient to
                  cover the costs and expenses of collection and of the exercise
                  of other remedies (including, without limitation, proceeding
                  against the Collateral), including the reasonable
                  compensation, expenses, disbursements and advances of the
                  Trustee, its agents and counsel and all other amounts
                  recoverable or payable to the Trustee under this Indenture,
                  the Collateral Documents or otherwise ("Trustee Expenses");
                  and

                           "(iv) all other Note Obligations, if any."

         4.10     Amendments to Section 6.10.

         Section 6.10 of the Existing Indenture is amended by (a) adding the
words "or Section 4.19" after the words "Article VI" in the first line thereof,
and (b) deleting the word "and" following the semicolon in clause Second of such
definition; designating the existing text of clause Third as clause Fourth, and
by adding the following clause Third after clause Second:

                  "Third: To the Holders in payment of all other Note
         Obligations, if any; and"

<PAGE>
                                      -21-

         4.11     Amendment to Section 7.06.

         Section 7.06 of the Existing Indenture is amended and restated in its
entirety to read as follows:

                  "Within 60 days after each May 15 beginning with May 15, 1999,
         the Trustee shall mail to the Holders a brief report dated as of such
         reporting date that complies with section 313(a) of the TIA (but if no
         event described in section 313(a) of the TIA has occurred within the
         twelve months preceding the reporting date, no report need be
         transmitted). The Trustee shall comply with section 313(b)(1) and
         section 313(b)(2) of the TIA, and shall transmit the reports required
         thereby within the time periods prescribed therein. The Trustee shall
         also transmit by mail all reports as required by section 313(c) of the
         TIA. Commencing at the time this Indenture is qualified under the TIA,
         a copy of each report at the time of its mailing to Holders shall be
         filed pursuant to TIA section 313(d) with the Commission and each stock
         exchange on which the Notes are listed. The Company shall notify the
         Trustee when the Notes are listed or delisted on any stock exchange."

         4.12     Addition to Article VIII.

         Article VIII of the Existing Indenture shall be amended by adding to
the end of such Article VIII a new Section 8.07, to read in its entirety as
follows:

                  "Section 8.07.    Release of Liens.

                  "Upon either:

                           "(a) the full and final payment in cash and discharge
                  of all of the Note Obligations of the Company and each
                  Subsidiary Guarantor in respect of the Notes, the Subsidiary
                  Guarantees, this Indenture and the Collateral Documents, or

                           "(b) upon the consummation in full of a Legal
                  Defeasance;

                  "all Liens of the Trustee upon all Collateral (other than, in
                  the case of a Legal Defeasance, the cash or non-callable
                  Government Securities deposited to accomplish such Legal
                  Defeasance) shall be deemed to be released. Upon a Company
                  Order, accompanied by an Officers' Certificate and Opinion of
                  Counsel to the effect that the conditions set forth in this
                  Indenture for the release of

<PAGE>
                                      -22-

                  such Liens has been satisfied, the Trustee shall execute such
                  instruments and documents as the Company shall reasonably
                  request to effectuate the release of record of such Liens and
                  reconveyance of such Collateral so disposed of."

         4.13     Amendment to Section 9.01.

         Section 9.01 of the Existing Indenture is amended and restated in its
entirety to read as follows:

                  "Notwithstanding Section 9.02, the Company, the Subsidiary
         Guarantors and the Trustee may amend or supplement this Indenture, any
         Collateral Document or the Notes, or enter into any new Collateral
         Document, without the consent of any Holder to:

                           "(i) cure any ambiguity, defect or inconsistency;

                           "(ii) provide for uncertificated Notes in addition to
                  or in place of Certificated Notes;

                           "(iii) provide for the assumption of the obligations
                  to the Holders of the Company or a Subsidiary Guarantor, as
                  the case may be, in the event of a merger or consolidation;

                           "(iv) make any change that (1) would provide any
                  additional rights or benefits to Holders or (2) does not
                  adversely affect the legal rights under this Indenture of any
                  Holder;

                           "(v) comply with Section 4.19, 4.20 or 4.21 or
                  Article X;

                           "(vi) secure the Notes pursuant to the requirements
                  of Section 4.11 or otherwise; or

                           "(vii) comply with the requirements of the Commission
                  in order to effect or maintain the qualification of this
                  Indenture under the TIA."

         4.14     Amendment to Section 9.02.

         That portion of the first sentence of Section 9.02(a) of the Existing
Indenture which precedes the proviso to Section 9.02(a) of the Existing
Indenture is amended and restated in its entirety to read as follows:

<PAGE>
                                      -23-

                  "Except as otherwise provided in Sections 9.01, this
         Indenture, the Collateral Documents and the Notes may be amended or
         supplemented with the written consent of the Majority Note Holders
         (including consents obtained in connection with a tender offer or
         exchange offer for the Notes), and any existing Default or Event of
         Default or compliance with any provision of this Indenture, the
         Collateral Documents or the Notes may be waived (other than any
         continuing Default or Event of Default in the payment of the principal
         of, premium, if any, or interest on the Notes) with the consent of the
         Majority Note Holders (including consents obtained in connection with a
         tender offer or exchange offer for the Notes);"

The proviso to such sentence shall remain unchanged.

         4.15     Amendment to Exhibit A.

         Exhibit A to the Existing Indenture, the Form of Note, shall be amended
and restated in its entirety to read as set forth in Exhibit A to this
Supplemental Indenture.

         4.16     Addition of Schedule 1.01.

         Schedule 1.01, Schedule 1.01(a), Schedule 1.01(b), and Schedule 1.01(c)
attached hereto are added to the Existing Indenture as Schedule 1.01, Schedule
1.01(a), Schedule 1.01(b), and Schedule 1.01(c).

5.   AMENDMENTS TO THE EXISTING NOTES.

         5.1      Capitalization of the June 1, 2000 Interest Payment.

         The Company and the Holders of all of the outstanding Existing Notes
have agreed that, in lieu of paying the interest payment in respect of the
Existing Notes which was otherwise due on June 1, 2000, the Company shall make
such interest payment by adding the amount of interest so due in respect of each
Note to the outstanding principal amount of such Existing Note. By their
execution and delivery hereof, the Subsidiary Guarantors consent to such
capitalization of such interest payment and do covenant and agree that the same
shall no longer be due and payable except in connection with the payment of the
principal amount of each Note, as amended pursuant to Exhibit A.

         5.2      Agreement to Amend Note.

         The Company and the holders of all of the outstanding Existing Notes
have agreed to certain amendments to the form of each outstanding Existing Note
in

<PAGE>
                                      -24-

order to reflect the change in interest payment contemplated by Section 5.1 of
this Supplemental Indenture, the terms of such amended Note to be as set forth
in Exhibit A hereto. By their execution and delivery hereof, the Subsidiary
Guarantors consent to such amendments. The holders of the Existing Notes have
directed the Trustee to effect this amendment.

         5.3      Exchange of Note Certificates.

         In order to effect the agreements of the Company, the Subsidiary
Guarantors, each of the holders of the Notes and the Trustee, the parties hereto
agree that:

                  (a) the Company, on or prior to June 30, 2000, shall produce a
         new, replacement Note, in the form of Exhibit A hereto, in respect of
         each outstanding Existing Note, each such Note to be registered in a
         principal amount equal to the sum of:

                           (i) the outstanding principal amount of such Existing
                  Note; plus

                           (ii) the amount of interest which the Company would
                  have been required to pay on June 1, 2000 in respect of such
                  Note had the modification contemplated by Section 5.1 of this
                  Supplemental Indenture and the form of Note set forth in
                  Exhibit A hereto not been made;

         each such Note shall bear the restrictions on transfer (pursuant to
         Section 2.08 of the Indenture or otherwise), if any, and registration
         rights (pursuant to the Registration Rights Agreement) and Liquidated
         Damages, if any, borne by the Existing Note so surrendered; and, if
         such Existing Note is in a form eligible for deposit with The
         Depository Trust Company, then such replacement Note shall be in such a
         form;

                  (b) the Company shall execute each such replacement Note, and
         each Subsidiary Guarantor shall execute the Subsidiary Guarantee
         endorsed thereon, and the Company shall deliver each replacement Note
         to the Trustee;

                  (c) from and after July 1, 2000, interest on the Notes shall
         accrue, and the Company shall pay interest on the Notes, as if all
         Existing Notes have been exchanged for replacement Notes pursuant to
         this Section 5.3, whether or not such exchange has actually occurred;
         and, to the extent that the Company has duly made such payments to the
         Paying Agent pursuant to Section 4.01 of the Indenture, the Trustee
         shall cause the Paying Agent to,

<PAGE>
                                      -25-

         and the Paying Agent shall, pay such interest to each Holder of each
         Note as if such exchange has occurred, whether or not such exchange has
         actually occurred; and

                  (d) against surrender of any Existing Note by the Holder
         thereof on or after July 1, 2000, the Trustee shall cause the Registrar
         to, and the Registrar shall, exchange such Existing Note for the
         replacement Note delivered by the Company to the Trustee pursuant to
         this Section 5.3 of this Supplemental Indenture.

6.   MISCELLANEOUS.

         6.1      No Other Modifications.

         Except as specifically modified herein, the Existing Indenture and the
Notes are in all respects ratified and confirmed (mutatis mutandis) and shall
remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.

         6.2      No Other Additional Trustee Duties.

         Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.

         6.3      Counterparts; Facsimiles.

         This Supplemental Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Any facsimile of an
executed counterpart shall have the same effect as the original executed
counterpart.

         6.4      Headings, Etc.

         The headings of the Articles and Sections of this Supplemental
Indenture have been inserted for convenience of reference only, are not to be
considered a part

<PAGE>
                                      -26-

of this Supplemental Indenture, and shall in no way modify or
restrict any of the terms or provisions of this Supplemental Indenture.

         6.5      Submission to Jurisdiction.

         THE COMPANY AND THE SUBSIDIARY GUARANTORS EXPRESSLY SUBMIT TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE OF NEW YORK AND THE U.S. FEDERAL COURTS
SITTING IN THE CITY OF NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS SUPPLEMENTAL INDENTURE. THE COMPANY AND THE
SUBSIDIARY GUARANTORS HEREBY APPOINT CT CORPORATION SYSTEM AS THEIR AGENT UPON
WHICH PROCESS MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO
THIS SUPPLEMENTAL INDENTURE.

         6.6      Successors.

         All agreements of the Company and the Subsidiary Guarantors in this
Supplemental Indenture and the Notes shall bind any successors of the Company
and such Subsidiary Guarantors, respectively. All agreements of the Trustee in
this Supplemental Indenture shall bind its successor.

         6.7      Severability.

         If any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

                      [Signature Page Follows on Next Page]

<PAGE>

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

                                       FINE AIR SERVICES CORP.

                                       By:_____________________________
                                       Name:
                                       Title:

                                       THE BANK OF NEW YORK, as Trustee

                                       By:_____________________________
                                       Name:
                                       Title:

                                       SUBSIDIARY GUARANTORS:

                                       FINE AIR SERVICES, INC.

                                       By:_____________________________
                                       Name:
                                       Title:

                                       AGRO AIR ASSOCIATES, INC.

                                       By:_____________________________
                                       Name:
                                       Title:

                                       FINE/AAA INTERAIR, INC.

                                       By:_____________________________
                                       Name:
                                       Title:

                                       ARROW AIR, INC.

                                       By:_____________________________
                                       Name:
                                       Title:

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