Document:

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                                LEASE AGREEMENT
                                (1992 757 [__])

                        Dated as of December [__], 1992

                                    Between

                         THE CONNECTICUT NATIONAL BANK,
                        Not in its Individual Capacity,
                              except as expressly
                         provided herein, but solely as
                                 Owner Trustee,
                                     Lessor

                                      and

                             UNITED AIR LINES, INC.
                                     Lessee

                             United Air Lines, Inc.
                         1992 757 [__] Equipment Trust
                       One Boeing Model 757-222 Aircraft
                       Manufacturer's Serial No. [_____],
                        U.S. Registration No.  N[_____]

     As set forth in Section 20 hereof, Lessor has assigned to the Mortgagee (as
defined herein) certain of its right, title and interest in and to this Lease.
To the extent, if any, that this Lease constitutes chattel paper (as such term
is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction) no security interest in this Lease may be created through the
transfer or possession of any counterpart other than the original executed
counterpart, which shall be identified as the counterpart containing the receipt
therefor executed by the Mortgagee on the signature page thereof.

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                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                   Page
<S>            <C>                                                 <C>
SECTION  1.    Definitions............................................1

SECTION  2.    Acceptance and Lease..................................20

SECTION  3.    Term and Rent.........................................20
        (a)    Interim Term and Basic Term...........................20
        (b)    Basic Rent............................................21
        (c)    Adjustments to Basic Rent, Excess Amount, Stipulated
               Loss Values, Termination Values and Special
               Termination Values....................................21
        (d)    Supplemental Rent.....................................23
        (e)    Payments in General...................................24
        (f)    Rent Rebate...........................................25
        (g)    Prepayments of Certain Rent Payments..................25

SECTION  4.    Lessor's Representations and Warranties...............26

SECTION  5.    Return of the Aircraft................................28
        (a)    Condition Upon Return.................................28
        (b)    Return of Other Engines...............................31
        (c)    Fuel; Manuals.........................................31
        (d)    Storage Upon Return...................................32
        (e)    Severable Parts.......................................32

SECTION  6.    Liens.................................................33

SECTION  7.    Registration, Maintenance and Operation; Possession
               and Subleases; Insignia...............................33
        (a)    (1)   Registration and Maintenance....................34
        (b)    Possession and Subleases..............................36
        (c)    Insignia..............................................39

SECTION  8.    Replacement and Pooling of Parts; Alterations,
               Modifications and Additions...........................40
        (a)    Replacement of Parts..................................40
        (b)    Pooling of Parts......................................41
        (c)    Alterations, Modifications and Additions..............41

SECTION  9.    Voluntary Termination.................................43
        (a)    Termination Event.....................................43
        (b)    Option to Purchase....................................44
        (c)    Optional Sale of the Aircraft.........................45
        (d)    Termination as to Engines.............................47

SECTION  10.   Loss, Destruction, Requisition, etc...................48
        (a)    Event of Loss with Respect to the Aircraft............48
</TABLE>
                                      -i-
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<TABLE>
<CAPTION>

<S>             <C>                                                          <C>
          (b)   Event of Loss with Respect to an Engine......................51
          (c)   Application of Payments from Governmental
                Authorities for Requisition of Title, etc....................52
          (d)   Requisition for Use of the Aircraft by the United
                States Government or Government of Registry of the
                Aircraft.....................................................53
          (e)   Requisition for Use of an Engine by the United
                States Government or the Government of Registry of
                the Aircraft.................................................55
          (f)   Application of Payments During Existence of Events
                of Default...................................................55

SECTION  11.    Insurance....................................................55
          (a)   Public Liability and Property Damage Insurance...............55
          (b)   Insurance Against Loss or Damage to the Aircraft.............56
          (c)   Reports, etc.................................................58
          (d)   Self-Insurance...............................................60
          (e)   Additional Insurance by Lessor and Lessee....................61
          (f)   Indemnification by United States Government in Lieu
                of Insurance.................................................61
          (g)   Application of Payments During Existence of an Event
                of Default...................................................61
          (h)   Terms of Insurance Policies..................................61

SECTION  12.    Inspection...................................................63

SECTION  13.    Assignment...................................................64

SECTION  14.    Events of Default............................................64

SECTION  15.    Remedies.....................................................67

SECTION  16.    Lessee's Cooperation Concerning Certain Matters..............71

SECTION  17.    Notices......................................................73

SECTION  18.    Net Lease, No Set-Off, Counterclaim, etc.....................74

SECTION  19.    Renewal Options; Purchase Options; Valuation.................76
          (a)   Renewal Options..............................................76
          (b)   Purchase Options.............................................78
          (c)   Valuation....................................................79

SECTION  20.    Security for Lessor's Obligation to Holders of Loan
                Certificates.................................................80

SECTION  21.    Lessor's Right to Perform for Lessee.........................81

SECTION  22.    Investment of Security Funds; Liability of Lessor Limited....81
</TABLE>
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<TABLE>
<CAPTION>

<S>       <C>                                                                <C>
          (a)    Investment of Security Funds................................81
          (b)    Liability of Lessor Limited.................................82

SECTION  23.     Miscellaneous...............................................82

SECTION  24.     Successor Trustee...........................................83
</TABLE>
                                     -iii-
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                                    EXHIBITS

EXHIBIT A      Form of Lease Supplement

EXHIBIT B      Basic Rent and Excess Amount Schedule

EXHIBIT C      Stipulated Loss Value Schedule

EXHIBIT D      Termination Value Schedule

EXHIBIT E      Rent Recalculation and Indemnification Verification

EXHIBIT F      Schedule of Countries Authorized for Domicile of Permitted
               Sublessees

EXHIBIT G      Schedule of Countries Authorized for Aircraft Registration

EXHIBIT H      Lessor's Cost, Special Termination Values and FPO Percentage

                                      -iv-
<PAGE>

                        LEASE AGREEMENT (1992 757 [__])

     This LEASE AGREEMENT (1992 757 [__]), dated as of December [__], 1992,
between THE CONNECTICUT NATIONAL BANK, not in its individual capacity, except as
expressly provided herein, but solely as Owner Trustee under the Trust Agreement
(as defined in Section 1 hereof) (in such capacity, "Lessor"), and UNITED AIR
LINES, INC., a corporation organized and existing pursuant to the laws of the
State of Delaware ("Lessee");

                                  WITNESSETH:

     SECTION 1. Definitions.  Unless the context otherwise requires, the
following terms shall have the following meanings for all purposes of this Lease
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms herein defined:

          "Acceptable Alternate Engine" means a Pratt & Whitney Model PW2037
     engine or another Pratt & Whitney Model engine of equivalent or greater
     value, utility, remaining useful life and airworthiness, and suitable for
     installation and use on the Airframe; provided that an engine of another
     manufacturer of equivalent or greater value, utility, remaining useful life
     and airworthiness, and suitable for installation and use on the Airframe
     will constitute an Acceptable Alternate Engine if at the time of
     replacement Pratt & Whitney is no longer manufacturing engines certificated
     for use on the Airframe, Lessee does not at the time of replacement own or
     lease any Pratt & Whitney engines certificated for use on the Airframe or,
     except in connection with the return of the Aircraft under Section 5
     hereof, Pratt & Whitney is no longer manufacturing engines which reasonably
     fulfill Lessee's operational requirements; and provided further that such
     engine shall be of the same make, model and manufacturer as the other
     engine installed on the Airframe and shall be an engine of a type then
     being utilized by Lessee on a significant number of other Boeing Model 757-
     222 aircraft operated by Lessee.

          "Additional Insured" means Lessor, in its individual capacity and as
     owner of the Aircraft, the Mortgagee, the Owner Participant, the
     Certificate Holders and Lessee in its capacity as sublessor under any
     Sublease.

          "Additional Parts" has the meaning set forth in Section 8(c) hereof.

          "Affiliate" means, with respect to any Person, any other Person
     directly or indirectly, through one or more intermediaries, controlling,
     controlled by or under common control with, such Person.  The term
     "control" (including "controlled by" and "under common control with") means
     the possession, directly or indirectly, of the power to direct, or cause
     the direction of, the management and policies of a Person, whether through
     the ownership of voting securities, by contract or otherwise.
<PAGE>

          "After-Tax Basis" means (i) with regard to any payment required or
     deemed to be made by Lessee to any Relevant Indemnitee, a total amount
     which after (A) taking into account any current Tax benefit, deduction or
     credit which arises from the payment by the Relevant Indemnitee of any
     amount, including Taxes, for which the payment to be received by the
     Relevant Indemnitee is made and which actually reduces any Taxes for which
     the Lessee is not required to indemnify such Relevant Indemnitee under
     either Section 7(b) of the Participation Agreement or the Tax Indemnity
     Agreement, and (B) deduction of all Taxes required to be paid by the
     recipient in respect of the receipt or accrual of such total amount, shall
     be equal to the payment required or deemed to be made by Lessee to such
     Relevant Indemnitee, and (ii) with regard to any payment required to be
     made by any Relevant Indemnitee to Lessee, a total amount which after (A)
     taking into account any Taxes required to be paid by the Relevant
     Indemnitee on account of the receipt or accrual of the amount, if any,
     which causes the Relevant Indemnitee to make a payment to Lessee, and (B)
     deduction of all Taxes saved by the Relevant Indemnitee as a result of
     paying or accruing such total amount, shall be equal to the payment
     required to be made by such Relevant Indemnitee to Lessee.

          "Aircraft" means the Airframe together with the two Engines whether or
     not such Engines are installed on the Airframe or any other airframe.

          "Airframe" means: (i) The Boeing Model 757-222 aircraft (excluding
     Engines or engines from time to time installed thereon) specified by United
     States Registration Number and Manufacturer's Serial Number set forth in
     the Lease Supplement; (ii) any and all Parts which are from time to time
     incorporated or installed in or attached thereto (but not an Engine) and
     any and all parts removed therefrom, so long as title thereto remains
     vested in Lessor in accordance herewith; and (iii) any replacement airframe
     which may from time to time be substituted pursuant to Section 10(a)(ii)
     hereof.

          "Assignment of Guaranty" means that certain Assignment of Guaranty
     (1992 757 [__]), dated as of the date hereof, from the Owner Trustee to the
     Mortgagee.

          "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended.

          "Base Rate" means the rate of interest announced from time to time by
     The First National Bank of Chicago at its principal office in Chicago,
     Illinois as its "corporate base rate" (or its equivalent successor rate if
     the corporate base rate is no longer used).

          "Basic Rent" means, for the Basic Term, the rent payable for the
     Aircraft pursuant to Section 3(b) hereof, as increased or decreased, as the
     case may be, by the Rent Differential, and as adjusted as provided in
     Section 3(c) and, for a Renewal Term, Basic Rent determined pursuant to
     Section 19.

                                      -2-
<PAGE>

          "Basic Term" means the term for which the Aircraft is leased hereunder
     pursuant to Section 3 (a) hereof beginning on the Commencement Date, and
     ending on December [__], 2014, or such earlier date as this Lease may be
     terminated in accordance with the terms hereof.

          "Business Day" means any day other than a Saturday or Sunday or a day
     on which commercial banks are required or authorized to close in Chicago,
     Illinois; New York City, New York; London, England; the city and state in
     which the principal place of business of the Owner Trustee is located; and,
     so long as any Loan Certificate is outstanding; the city and state in which
     the principal place of business of the Mortgagee is located and the city
     and state in which the Mortgagee receives and disburses funds.

          "Certificate Holder" has the meaning set forth in the Trust Indenture.

          "Civil Reserve Air Fleet Program" means the Civil Reserve Air Fleet
     Program administered by the United States Government pursuant to Executive
     Order No. 11490, as amended, or any substantially similar program.

          "Closing Date" means the date of the initial Lease Supplement for the
     Aircraft, which date shall be the date the Aircraft is sold by Lessee to
     Lessor and leased by Lessor to Lessee and accepted by Lessee hereunder.

          "Code" means the Internal Revenue Code of 1986, as amended through the
     Closing Date.

          "Commencement Date" has the meaning set forth in the initial Lease
     Supplement.

          "Commitment" means the commitment of each of the Loan Participants or
     of the Owner Participant, as the case may be, to finance the Owner
     Trustee's payment of Lessor's Cost for the Aircraft.

          "Consent and Agreement" means the Consent and Agreement (1992 757
     [__]), dated as of the date hereof, executed by Manufacturer, as the same
     may be amended, modified or supplemented from time to time in accordance
     with the applicable provisions thereof.

          "Debt Rate" means, at any time, the interest rate borne by the Loan
     Certificates then outstanding.

          "Default" means any event or condition which with the giving of notice
     or the lapse of time or both would become an Event of Default.

          "Dollars" and "$" mean the lawful currency of the United States of
     America.

                                      -3-
<PAGE>

          "Engine" means (i) each of the two Pratt and Whitney Model PW2037
     engines listed by manufacturer's serial numbers set forth in the Lease
     Supplement and installed on the Airframe at the time of the Lessee's
     delivery to Owner Trustee of such Airframe, whether or not from time to
     time thereafter installed on such Airframe or any other airframe; (ii) any
     Acceptable Alternate Engine or replacement engine which may from time to
     time be substituted for either of such two engines pursuant to the terms
     hereof; and (iii) in either case, any and all Parts which are from time to
     time incorporated or installed in or attached to any such engine and any
     and all parts removed therefrom so long as title thereto remains vested in
     Lessor in accordance herewith. The term "Engines" means, as of any date of
     determination, all Engines then leased hereunder.

          "Event of Default" has the meaning set forth in Section 14 hereof.

          "Event of Loss" with respect to the Aircraft, Airframe or any Engine
     means any of the following events with respect to such property: (i) the
     loss of such property or of the use thereof due to the destruction of or
     damage to such property which renders repair uneconomic or which renders
     such property permanently unfit for normal use by Lessee for any reason
     whatsoever; (ii) any damage to such property which results in an insurance
     settlement with respect to such property on the basis of a total loss, or a
     constructive or comprised total loss; (iii) the theft or disappearance of
     such property for a period in excess of 180 consecutive days; (iv) (a) the
     confiscation, condemnation, or seizure of, or requisition or taking of
     title to, or (b) the requisition for use of, such property by any
     governmental or purported governmental authority (other than a requisition
     for use by the United States Government or by any other government of
     registry of the Aircraft, or any agency or instrumentality of any thereof),
     which in the case of any event referred to in this clause (iv) shall have
     resulted in the loss of possession of such property by Lessee for a period
     in excess of 180 consecutive days or, if earlier, until the end of the
     Term; (v) as a result of any law, rule, regulation, order or other action
     by the FAA or other governmental body of the government of registry of the
     Aircraft having jurisdiction, use of such property in the normal course of
     the business of air transportation shall have been prohibited for a period
     of 180 consecutive days or, if earlier, until the end of the Term, unless
     Lessee, prior to the expiration of such 180-day period (or such shorter
     period prior to the end of the Term), shall have undertaken and shall be
     diligently carrying forward all steps which are necessary or desirable to
     permit the normal use of such property by Lessee, but in any event if such
     use shall have been prohibited for a period of two consecutive years,
     provided that no Event of Loss shall be deemed to have occurred if (a)
     Lessor and Mortgagee waive such Event of Loss or (b) such prohibition has
     been applicable to Lessee's entire fleet of Boeing Model 757-222 aircraft
     registered in such jurisdiction and Lessee, prior to the expiration of such
     two-year period, shall have conformed at least one such aircraft in its
     fleet to the requirements of any such law, rule, regulation, order or other
     action and commenced regular commercial use of the same in such
     jurisdiction and shall be diligently carrying forward, in a manner which
     does not discriminate against the Aircraft in so conforming the Aircraft,
     all steps which are necessary or desirable to permit the normal use of the
     Aircraft by Lessee; (vi) the requisition

                                      -4-
<PAGE>

     for use by the United States Government or any other government of registry
     of the Aircraft or any instrumentality or agency of any thereof, which
     shall have continued beyond the Term and Lessor shall not have furnished
     the written notice specified in Section 10(d) hereof; and (vii) with
     respect to an Engine only, any divestiture of title to such Engine treated
     as an Event of Loss pursuant to Section 7(b) hereof. An Event of Loss with
     respect to the Aircraft shall be deemed to have occurred if an Event of
     Loss occurs with respect to the Airframe.

          "Excess Amount" for the Commencement Date means the amount in Dollars
     set forth in Exhibit B hereto opposite the Commencement Date (as such
     Exhibit B may be adjusted from time to time as provided in Section 3(c)
     hereof).

          "Excluded Payments" means (i) indemnity payments paid or payable by
     Lessee to or in respect of the Owner Participant or the Owner Trustee in
     its individual capacity, the Mortgagee, in its individual capacity, their
     respective Affiliates, successors and permitted assigns and their
     directors, officers, employees, servants and agents pursuant to Sections
     7(b) and 7(c) of the Participation Agreement and all payments of
     Supplemental Rent by Lessee in respect thereof, (ii) proceeds of insurance
     (or proceeds of governmental indemnities provided in lieu thereof) in
     respect of the Aircraft payable as a result of insurance claims made, or
     losses suffered, by the Owner Trustee or the Mortgagee in their respective
     individual capacities or by the Owner Participant, (iii) proceeds of
     casualty insurance (or proceeds of governmental indemnities provided in
     lieu thereof) maintained with respect to the Aircraft by the Owner
     Participant (whether directly or through the Owner Trustee) and not
     required under Section 11 hereof, (iv) all payments required to be made
     under the Tax Indemnity Agreement by Lessee and all payments of
     Supplemental Rent by Lessee in respect of any amounts payable under the Tax
     Indemnity Agreement, (v) fees and expenses payable to the Owner Trustee or
     the Mortgagee pursuant to the last paragraph of Section 7(c) of the
     Participation Agreement, (vi) provided that the Loan Certificates shall
     have been duly assumed by Lessee pursuant to Section 2.12 of the Trust
     Indenture, the amount payable to Lessor pursuant to (a) clauses 2(B)(y) and
     2(B)(z) of Section 9(b) of this Lease, or (b) Section 19(b) of this Lease
     (after taking into account the credit specified in the last sentence of
     such Section), (vii) any interest that pursuant to the Operative Documents
     may from time to time accrue in respect of any of the amounts described in
     clauses (i) through (vi) above, (viii) any amount paid pursuant to the
     Guaranty Agreement in respect of any of the amounts described in clauses
     (i) through (vii) above and (ix) any right to demand, collect, sue for, or
     otherwise secure and enforce the payment of any amount described in clauses
     (i) through (viii) above (other than the right to declare this Lease to be
     in default or to exercise any remedies hereunder; provided, however, that
     Lessor may demand payment of any Excluded Payments payable by Lessee and
     may commence an action against Lessee to require payment of the same).

          "Expenses" means any and all liabilities, obligations, losses,
     damages, penalties, claims (including, but not limited to, negligence,
     strict or absolute liability, liability in tort and liabilities arising out
     of the violation of laws or regulatory requirements of any kind),

                                      -5-
<PAGE>

     actions, suits, out-of-pocket costs, expenses and disbursements (including
     reasonable legal fees and expenses and, to the extent not required to be
     paid by the Owner Trustee pursuant to Section 17 of the Participation
     Agreement, Transaction Expenses, and all costs and expenses relating to
     amendments, supplements, waivers and consents to and under the Operative
     Documents, but excluding internal costs and expenses such as salaries, any
     amounts that would be included in Funding Costs or Increased Cost described
     in Section 20 of the Participation Agreement, any amounts described in
     paragraph 4 or 5 of the Loan Certificates and overhead of whatsoever kind
     and nature).

          "Fair Market Renewal Term" has the meaning set forth in Section
     19(a)(2) hereof.

          "Fair Market Rental Value" means the fair market rental value
     determined as provided in Section 19(c) hereof.

          "Fair Market Sales Value" means the fair market sales value determined
     as provided in Sections 19(a) and 19(c) hereof.

          "Federal Aviation Act" means the Federal Aviation Act of 1958, as
     amended.

          "Federal Aviation Administration" and "FAA" mean the United States
     Federal Aviation Administration and any successor agency or agencies
     thereto.

          "Fixed Renewal Term" has the meaning set forth in Section 19(a)(1)
     hereof.

          "FPO Percentage" means the percentage of Lessor's Cost specified as
     the FPO Percentage on Exhibit H hereto.

          "Funding Costs" has the meaning set forth in the Loan Certificates.

          "Funding Profits" has the meaning set forth in the Loan Certificates.

          "Guarantor" means UAL Corporation, a Delaware corporation, and its
     successors and assigns.

          "Guaranty Agreement" means that certain Guaranty Agreement (1992 757
     [__]), dated as of the date hereof, from the Guarantor in favor of the
     beneficiaries named therein.

          "Illegality Event" means any change after the Closing Date, in
     applicable law, treaty or governmental regulation applicable to a
     Certificate Holder, or in the interpretation or application thereof, or
     compliance by such Certificate Holder with any request or directive
     (whether or not having the force of law) from any central bank or other
     financial, monetary or other authority with jurisdiction over such
     Certificate Holder, which shall, in the reasonable opinion of such
     Certificate Holder, make it unlawful for such Certificate Holder

                                      -6-
<PAGE>

     to fund or maintain its funding with respect to the Loan Certificates held
     by it or to give effect to all or any part of its obligations under the
     Operative Documents.

          "Increased Cost" means any change after the Closing Date, in
     applicable law, treaty or governmental regulation (other than a law, treaty
     or governmental regulation relating to Taxes) applicable to a Certificate
     Holder, or in the interpretation or application thereof, or compliance by
     such Certificate Holder with any request or directive (whether or not
     having the force of law) from any central bank or other financial, monetary
     or other authority with jurisdiction over such Certificate Holder which
     shall (i) impose, modify or deem applicable any capital adequacy or similar
     requirement which affects the manner in which such Certificate Holder
     allocates capital resources to its commitments, including its obligations
     under the Operative Documents; or (ii) impose on such Certification Holder
     any other condition with respect to its Loan Certificates or its funding
     thereof; and the result of any of the foregoing is (x) to increase the cost
     to such Certificate Holder of maintaining or funding its interest in its
     Loan Certificates by an amount that such Certificate Holder deems to be
     material, (y) to reduce the amount of any payment (whether of principal,
     interest or otherwise) in respect of such Loan Certificates or other
     amounts payable to such Certificate Holder under the Operative Documents by
     an amount that such Certificate Holder deems to be material or (z) to
     reduce the rate of return on such Certificate Holder's capital as a
     consequence of its obligations under the Operative Documents or the Loan
     Certificates to a level below that which such Certificate Holder could have
     achieved but for such circumstances.

          "Indemnitees" means the Participants, the Owner Trustee, in its
     individual capacity and as trustee under the Trust Agreement, the Trust
     Estate, the Mortgagee, each Certificate Holder and each of their respective
     Affiliates, successors, permitted assigns, directors, officers, employees,
     servants and agents.

          "Indenture Supplement" means a supplement to the Trust Indenture,
     substantially in the form of Exhibit A to the Trust Indenture.

          "Insurance Broker" has the meaning set forth in Section 11(c) hereof.

          "Interest Payment Date" has the meaning set forth in the Loan
     Certificates.

          "Interest Period" has the meaning set forth in the Loan Certificates.

          "Interim Term" means the period commencing on the Closing Date and
     ending on and excluding the day which is the Commencement Date unless
     earlier terminated in accordance with the provisions hereof.

          "Lease Agreement," "this Lease Agreement," "this Lease," "this
     Agreement," "herein," "hereof," "hereunder", "hereby," or other like words
     mean this Lease Agreement as originally executed or as modified, amended or
     supplemented in accordance with the

                                      -7-
<PAGE>

     applicable provisions hereof and the terms of the Trust Indenture,
     including, without limitation, supplementation hereof by any Lease
     Supplement entered into in accordance with the applicable provisions hereof
     and the terms of the Trust Indenture.

          "Lease Period" means each of the consecutive periods throughout the
     Basic Term and any Renewal Term ending on a Lease Period Date, the first
     such period commencing on and including the Commencement Date.

          "Lease Period Date" means (i) July 1, 1993, and each succeeding semi-
     annual anniversary thereof to and including the last such date in the Basic
     Term and (ii) December 1, 2014 and each succeeding semi-annual anniversary
     thereof to and including the last such date in the Term and thereafter to
     the extent necessary in the operation of Section 15(d) or any other
     provision hereof (or, if any such date is not a Business Day, the
     immediately succeeding Business Day, unless such succeeding Business Day is
     in the next calendar month, in which case the Lease Period Date shall be
     the next preceding Business Day).

          "Lease Supplement" means a Lease Supplement substantially in the form
     of Exhibit A hereto, to be entered into between Lessor and Lessee on the
     Closing Date for the purpose of leasing the Aircraft under and pursuant to
     the terms of this Lease Agreement, and any subsequent Lease Supplement
     entered into in accordance with the terms hereof and the terms of the Trust
     Indenture.

          "Lessee Documents" means the Participation Agreement, the Lease, any
     Lease Supplement, the Purchase Agreement, the Owner Trustee's Purchase
     Agreement, the Owner Trustee's Bill of Sale, the Owner Trustee's FAA Bill
     of Sale and the Tax Indemnity Agreement.

         "Lessor Liens" means any Lien or disposition of title arising as a
     result of (i) claims against, or any act or omission of, Lessor, The
     Connecticut National Bank, in its individual capacity, or the Owner
     Participant not related to the transactions contemplated by the Operative
     Documents or in violation of any of the terms of the Operative Documents,
     (ii) claims against the Owner Participant, Lessor, or The Connecticut
     National Bank, in its individual capacity, with respect to Taxes or
     Expenses against which Lessee is not required to indemnify the Owner
     Participant, Lessor or The Connecticut National Bank, in its individual
     capacity, or (iii) claims against Lessor or the Owner Participant arising
     out of any transfer by Lessor or the Owner Participant of all or any
     portion of the respective interests of Lessor or the Owner Participant in
     the Aircraft, the Trust Estate or the Operative Documents other than a
     transfer of possession of the Aircraft by Lessor pursuant to Section 9, 10,
     or 19 hereof or pursuant to the exercise of the remedies set forth in
     Section 15 hereof; provided, however, that any Lien which is attributable
     solely to The Connecticut National Bank in its individual capacity or the
     Owner Participant and would otherwise constitute a Lessor Lien hereunder
     shall not constitute a Lessor Lien hereunder so long as (1) the existence
     of such Lien poses no material risk of the sale, forfeiture or loss of the
     Airframe

                                      -8-
<PAGE>

     or any Engine or any interest therein, (2) the existence of such Lien does
     not interfere in any way with the use or operation of the Aircraft by
     Lessee (or any Sublessee), (3) the existence of such Lien does not affect
     the priority or perfection of the Lien of the Trust Indenture, (4) The
     Connecticut National Bank in its individual capacity or the Owner
     Participant, as the case may be, is diligently contesting such Lien by
     appropriate proceedings and (5) the existence of such Lien does not result
     in actual interruption in the payment of Rent assigned to the Mortgagee for
     the benefit of the Certificate Holders.

          "Lessor's Cost" for the Aircraft means the amount specified as
     Lessor's Cost in Exhibit H hereto.

          "Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
     lease or security interest.

          "Loan Certificate" has the meaning set forth in the Trust Indenture.

          "Loan Participant" means each Person executing the Participation
     Agreement as a Loan Participant, and its respective successors and assigns.

          "Loan Participant Liens" means any Lien arising as a result of claims
     against, or any act or omission of, a Loan Participant or Certificate
     Holder not related to the transactions contemplated by the Operative
     Documents.

          "Manufacturer" means The Boeing Company, a Delaware corporation, and
     its successors and assigns.

          "Manufacturer Documents" means the Purchase Agreement and the Consent
     and Agreement.

          "Mortgagee" means the Person executing the Participation Agreement as
     Mortgagee and any Person appointed as successor Mortgagee, in each case not
     in its individual capacity but solely as Mortgagee under the Trust
     Indenture, except as otherwise expressly stated.

          "Mortgagee Documents" means the Participation Agreement, the Trust
     Indenture, the Loan Certificates and the Assignment of Guaranty.

          "Net Economic Return" means the Owner Participant's net after-tax book
     yield, aggregate after-tax cash flow and no less than 100% of book income
     for each year prior to the fifth anniversary of the Closing Date, and book
     income shall not be increased or decreased by more than 10% for each
     subsequent year of the Lease Term, utilizing the multiple investment
     sinking fund method of analysis computed on the basis of the same
     methodology and assumptions as were utilized by the Owner Participant in
     determining Basic Rent, Excess Amount, Stipulated Loss Value percentages,
     Termination Value

                                      -9-
<PAGE>

     percentages, Special Termination Value percentages and the FPO Percentage
     as of the Closing Date, as such assumptions may be adjusted for events
     which have been the basis for adjustments to Rent pursuant to Section 3(c)
     hereof.

          "Net Present Value of Rents" means the net present value, as of the
     Closing Date, of Basic Rent set forth in Exhibit B hereto, discounted semi-
     annually at a rate equal to (a) 11% per annum divided by (b) the number of
     Lease Periods per year.

          "Obsolete Parts" has the meaning set forth in Section 8(c) hereof.

          "Operative Documents" means the Lease (including any Lease
     Supplement); the Participation Agreement; the Tax Indemnity Agreement; the
     Trust Agreement; the Purchase Agreement; the Owner Trustee's Bill of Sale;
     the Owner Trustee's FAA Bill of Sale; the Owner Trustee's Purchase
     Agreement; an Acceptance Certificate (as such term is defined in the
     Participation Agreement); the Trust Indenture; any Indenture Supplement;
     the Loan Certificates; the Consent and Agreement; the Guaranty Agreement;
     and the Assignment of Guaranty.

          "Original Amount" with respect to a Loan Certificate, means the stated
     original principal amount of such Loan Certificate, and with respect to all
     the Loan Certificates means the aggregate stated original principal amounts
     of such Loan Certificates, as the case may be.

          "Owner Participant" means the Person executing the Participation
     Agreement as the Owner Participant and any Person to which such Person
     transfers all or any portion of its right, title and interest in and to the
     Trust Agreement, the Trust Estate and the Participation Agreement, to the
     extent permitted thereby.

          "Owner Participant Documents" means the Participation Agreement, the
     Trust Agreement and the Tax Indemnity Agreement.

          "Owner Trustee" means the Person executing the Participation Agreement
     as Owner Trustee and any Person appointed as successor Owner Trustee, in
     each case not in its individual capacity but solely as Owner Trustee under
     the Trust Agreement, except as otherwise expressly stated.

          "Owner Trustee Documents" means the Participation Agreement, the Trust
     Agreement, this Lease, any Lease Supplement, the Owner Trustee's Purchase
     Agreement, the Trust Indenture, any Indenture Supplement, the Assignment of
     Guaranty and the Loan Certificates.

          "Owner Trustee's Bill of Sale" means a bill of sale for the Aircraft,
     dated the Closing Date, executed by the Lessee in favor of Lessor in form
     and substance satisfactory to Lessor.

                                     -10-
<PAGE>

          "Owner Trustee's FAA Bill of Sale" means a bill of sale for the
     Aircraft on AC Form 8050-2 or such other form as may be approved by the FAA
     on the Closing Date executed by the Lessee in favor of Lessor in form and
     substance satisfactory to Lessor.

          "Owner Trustee's Purchase Agreement" means the Owner Trustee's
     Purchase Agreement and Assignment (1992 757 [__]), dated as of the date
     hereof, between the Lessee and the Owner Trustee, as the same may be
     amended, modified or supplemented from time to time in accordance with the
     applicable provisions thereof and the terms of the Trust Indenture.

          "Participants" means and includes the Loan Participants and the Owner
     Participant.

          "Participation Agreement" means that certain Participation Agreement
     (1992 757 [__]), dated as of the date hereof, among Lessee, the Guarantor,
     the Mortgagee, the Paying Agent, the Participants and the Owner Trustee, as
     such Participation Agreement may be amended or supplemented from time to
     time pursuant to the applicable provisions thereof.

          "Parts" means all appliances, parts, instruments, appurtenances,
     accessories, furnishings and other equipment of whatever nature other than
     complete Engines or engines, which are from time to time incorporated or
     installed in or attached to an Airframe or any Engine or which have been
     removed therefrom, but where title to which remains vested in Lessor in
     accordance with Section 8 hereof.

          "Past Due Rate" means (i) with respect to the portion of any payment
     of Rent that may be required by the Trust Indenture to be paid by the
     Mortgagee to any Certificate Holder, the "Overdue Rate" as defined in the
     Trust Indenture and (ii) with respect to the remaining portion of any
     payment of Rent (and the entire amount of any payment of Rent after the
     satisfaction and discharge of the Trust Indenture), a fluctuating rate per
     annum equal to the lesser of (x) 2% over the Base Rate and (y) the maximum
     rate permitted under the applicable law.

          "Paying Agent" means National Westminster Bank PLC, and its successors
     and assigns.

          "Permitted Lien" means any Lien referred to in clauses (i) through
     (vi) of Section 6 hereof.

          "Permitted Sublessee" means any air carrier domiciled in a country
     listed in Exhibit F hereto as in effect from time to time.

                                     -11-
<PAGE>

          "Person" means any individual, corporation, partnership, joint
     venture, association, joint-stock company, trust, unincorporated
     organization or government or any agency or political subdivision thereof.

          "Prepaid Rent" has the meaning set forth in Section 3(g) hereof.

          "Purchase Agreement" means the agreement between Lessee and the
     Manufacturer relating to the purchase by Lessee of the Aircraft, as
     originally executed or as modified, amended or supplemented in accordance
     with the terms thereof, but only insofar as the foregoing relates to the
     Aircraft.

          "Purchase Option Date" has the meaning set forth in Section 19(b)
     hereof.

          "Reimbursement Amount" has the meaning set forth in Section 3(g)
     hereof.

          "Relevant Indemnitee" means the Owner Participant, the Owner Trustee,
     in its individual capacity and as trustee under the Trust Agreement, the
     Trust Estate and each of their respective Affiliates, successors, permitted
     assigns, directors, officers, employees, servants and agents.

          "Renewal Term" means a Fixed Renewal Term or Fair Market Renewal Term.

          "Rent" means Basic Rent, Prepaid Rent and Supplemental Rent,
     collectively.

          "Rent Differential" has the meaning set forth in Section 3(c)(iii)
     hereof.

          "Special Termination Value" has the meaning set forth on Exhibit H
     hereto.

          "Stipulated Loss Value" with respect to the Aircraft as of any date
     through and including the last day of the Basic Term, means the amount
     determined by multiplying Lessor's Cost for the Aircraft by the percentage
     specified in Exhibit C hereto opposite the Stipulated Loss Value Date with
     respect to which the amount of Stipulated Loss Value with respect to which
     the amount of Stipulated Loss Value is determined (as such Exhibit C may be
     adjusted from time to time as provided in Section 3(c) hereof and in
     Section 8 of the Tax Indemnity Agreement). "Stipulated Loss Value" with
     respect to the Aircraft, as of any date during any Renewal Term, shall be
     the amount determined as provided in Section 19 hereof, as such amount may
     be adjusted from time to time. To the extent that the actual amount of
     interest paid and to be paid on the Loan Certificates during the Lease
     Period in which such Stipulated Loss Value Date occurs up to and including
     such Stipulated Loss Date is greater or less than the amount included in
     calculating the percentage set forth in Exhibit C hereto with respect to
     such Stipulated Loss Value Date on account of such interest, such
     percentage shall be adjusted appropriately to compensate for such
     differential.

          "Stipulated Loss Value Date" has the meaning set forth in the Lease
     Supplement.

                                      -12-
<PAGE>

          "Sublease" means any sublease permitted by the terms of Section
     7(b)(viii) hereof.

          "Sublessee" means any Person for so long, but only so long, as such
     Person is in possession of the Airframe and/or any Engine pursuant to the
     terms of a Sublease which is then in effect pursuant to Section 7(b)(viii)
     hereof.

          "Supplemental Rent" means all amounts, liabilities and obligations
     (other than Basic Rent and Prepaid Rent) which Lessee assumes or agrees to
     pay to Lessor or others hereunder or under any of the other Operative
     Documents, including, without limitation, payments of Stipulated Loss
     Value, Termination Value, Special Termination Value and FPO Percentage and
     amounts calculated by reference thereto, an amount equal to the Funding
     Costs, if any, payable in accordance with Section 20 of the Participation
     Agreement and indemnity payments. The parties acknowledge that Supplemental
     Rent is a general category and, accordingly, agree that any provision of
     any Operative Document which calls for the payment of Supplemental Rent and
     also calls for the payment of specific items which are includable in
     Supplemental Rent is not to be interpreted as requiring any double payment.

          "Tax Indemnity Agreement" means that certain Tax Indemnity Agreement
     (1992 757 [__]), dated as of the date hereof, between the Owner Participant
     and Lessee, as originally executed or as modified, amended or supplemented
     pursuant to the applicable provisions thereof.

          "Taxes" means any and all fees (including, without limitation,
     license, documentation and registration fees), taxes (including, without
     limitation, income, gross receipts, sales, rental, use, turnover, value
     added, property (tangible and intangible), excise and stamp taxes),
     licenses, levies, imposts, duties, recording charges or fees, charges,
     assessments, or withholdings of any nature whatsoever, together with any
     assessments, penalties, fines, additions to tax and interest thereon (each,
     individually a "Tax").

          "Term" means the Interim Term, Basic Term and, if actually entered
     into, any Renewal Term.

          "Termination Date" has the meaning set forth in Section 9(a) hereof.

          "Termination Notice" has the meaning set forth in Section 9(a) hereof.

          "Termination Value" with respect to the Aircraft as of any date
     through and including the last day of the Basic Term means the amount
     determined by multiplying Lessor's Cost for the Aircraft by the percentage
     specified in Exhibit D hereto opposite the Termination Date with respect to
     which the amount of Termination Value is determined (as such Exhibit D may
     be adjusted from time to time as provided in Section 3(c) hereof and in
     Section 8 of the Tax Indemnity Agreement). To the extent that the actual
     amount of interest paid and to

                                      -13-
<PAGE>

     be paid on the Loan Certificates during the Lease Period in which such
     Termination Date occurs up to and including such Termination Date is
     greater or less than the amount included in calculating the percentage set
     forth in Exhibit D hereto with respect to such Termination Date on account
     of such interest, such percentage shall be adjusted appropriately to
     compensate for such differential.

          "Transaction Expenses" means (i) the reasonable and actual fees,
     expenses and disbursements of (1) Day, Berry & Howard, special counsel for
     the Mortgagee, (2) Shipman & Goodwin, counsel for the Owner Trustee, (3)
     Crowe & Dunlevy, special counsel in Oklahoma City, Oklahoma, (4) Coudert
     Brothers, special counsel for the Loan Participants, (5) Vedder, Price,
     Kaufman & Kammholz, special counsel for Lessee, and (6) Hunton & Williams,
     special counsel for the Owner Participant, (ii) all fees, taxes and other
     charges payable in connection with the recording or filing of instruments
     and financing statements, (iii) the initial fee and reasonable and actual
     disbursements of the Owner Trustee under the Trust Agreement, (iv) the
     initial fee and reasonable and actual disbursements of the Mortgagee under
     the Trust Indenture, (v) the reasonable out-of-pocket expenses of the Owner
     Participant (including computer time and costs) relating to the
     transactions contemplated by the Participation Agreement as well as those
     transactions relating to the investment by the Owner Participant in up to
     nineteen additional Boeing Model 757-222 aircraft to be operated by the
     Lessee, up to an aggregate of $25,000 (but excluding from Transaction
     Expenses airfare charges incurred for travel on an airline other than
     United Air Lines) plus airfare charges incurred for travel on United Air
     Lines, (vi) the reasonable fee of Avmark Services, Ltd. (or of such other
     appraiser as shall be acceptable to Lessee and the Owner Participant) with
     respect to the appraisal of the Aircraft required on or before the Closing
     Date pursuant to Section 4(a) of the Participation Agreement, (vii) the
     reasonable equity placement fees and commissions of Capstar Partners, Inc.,
     (viii) the initial fee of the Loan Participants, and (ix) printing and
     distribution costs relating to the transactions contemplated by the
     Operative Documents.

          "Trust Agreement" means that certain Trust Agreement (1992 757 [__]),
     dated as of the date hereof, between the Owner Participant and The
     Connecticut National Bank, in its individual capacity, as originally
     executed or as modified, amended or supplemented in accordance with the
     applicable provisions thereof and the terms of the Participation Agreement
     and the Trust Indenture.

          "Trust Estate" has the meaning set forth in Section 1.1 of the Trust
     Agreement.

          "Trust Indenture" means that certain Trust Indenture and Mortgage
     (1992 757 [__]), dated as of the date hereof, between Lessor and the
     Mortgagee, as originally executed or as modified, amended or supplemented
     in accordance with the provisions thereof and the terms of the
     Participation Agreement, including, without limitation, any Indenture
     Supplement entered into pursuant to the applicable provisions thereof.

                                      -14-
<PAGE>

          "U.S. Air Carrier" means any United States air carrier as to which
     there is in force a certificate issued pursuant to Section 401 of the
     Federal Aviation Act, and as to which there is in force an air carrier
     operating certificate issued pursuant to Part 121 of the regulations under
     such Act, or which may operate as an air carrier by certification or
     otherwise under any successor or substitute provisions therefor or in the
     absence thereof.

          "United States Government" means the federal government of the United
     States of America or any instrumentality or agency thereof.

          "Wet Lease" means any arrangement whereby the Lessee agrees to furnish
     the Airframe and Engines or engines installed thereon to a third party
     pursuant to which such Airframe and Engines or engines (i) shall be
     operated solely by regular employees of Lessee possessing all current
     certificates and licenses that would be required under the Federal Aviation
     Act (or if the Aircraft is not registered in the United States, all
     certificates and licenses required by the laws of the jurisdiction of
     registry) for the performance by such employees of similar functions within
     the United States of America (or such jurisdiction of registry) (it is
     understood that cabin attendants need not be employees of Lessee) and (ii)
     shall be maintained by Lessee in accordance with its normal maintenance
     practices.

     SECTION 2. Acceptance and Lease.  Subject to the terms of the Participation
Agreement, Lessor hereby agrees to accept title on the Closing Date from Lessee
and to lease to Lessee hereunder, and Lessee hereby agrees to lease on the
Closing Date from Lessor hereunder, the Aircraft as evidenced by the execution
by Lessor and Lessee of a Lease Supplement leasing the Aircraft hereunder.
Lessee agrees that Lessor will authorize one or more employees of Lessee,
designated by Lessee in writing, as the authorized Lessee, designated by Lessee
in writing, as the authorized representative or representatives of Lessor to
accept delivery of the Aircraft from the Lessee. Lessee hereby agrees that in
the event delivery of the Aircraft shall be accepted by an employee or employees
of Lessee pursuant to such authorization by Lessor, such acceptance of delivery
by such employee or employees on behalf of Lessor shall, without further act,
irrevocably constitute acceptance by Lessee of the Aircraft for all purposes of
this Lease Agreement.

     SECTION 3. Term and Rent.

          (a)  Interim Term and Basic Term.  The Interim Term shall commence on
the Closing Date and end on and include the day immediately preceding the
Commencement Date unless earlier terminated pursuant to the provisions hereof.
The Basic Term shall commence on the Commencement Date and end on December 1,
2014 or such earlier date as this Lease may be terminated in accordance with the
provisions hereof.

          (b)  Basic Rent.  Lessee shall pay Basic Rent in Dollars with respect
to each Lease Period during the Basic Term on each Lease Period Date during the
Basic Term, in the respective amounts on each Lease Period Date determined in
accordance with Exhibit B hereto. Basic Rent shall accrue in advance or in
arrears in accordance with Exhibit B hereto.

                                     -15-

<PAGE>

          (c)  Adjustments to Basic Rent, Excess Amount, Stipulated Loss Values,
Termination Values and Special Termination Values.

          (i)  In the event that (A) Transaction Expenses paid by Lessor are
     determined to be other than 1.25% of Lessor's Cost, (B) there shall be an
     optional redemption or a refinancing or a refunding of the Loan
     Certificates in accordance with Section 18 of the Participation Agreement,
     (C) the Closing Date occurs other than on December [__], 1992, or (D) there
     is an optimization in accordance with Section 19 of the Participation
     Agreement, then in each case the Basic Rent and Excess Amount set forth in
     Exhibit B, Stipulated Loss Value percentages set forth in Exhibit C, the
     Termination Value percentages set forth in Exhibit D and the Special
     Termination Value percentages set forth in Exhibit H shall be adjusted
     (upwards or downwards as the case may be) using the same methods and
     assumptions (as modified on account of the occurrence of any of the events
     referred to in clauses (A) -(D)) used to calculate Basic Rent and Excess
     Amount, Stipulated Loss Value percentages, Termination Value percentages
     and Special Termination Value percentages as set forth in Exhibits B, C, D
     and H, respectively, in each case in order to: (1) maintain the Owner
     Participant's Net Economic Return and (2) minimize the Net Present Value of
     Rents to Lessee to the extent possible consistent with clause (1) hereof.
     Any adjustment pursuant to this Section 3(c)(i) shall be made as soon as
     practicable after the occurrence of the event giving rise to such
     adjustment.

          (ii)  Any recalculation of Basic Rent, Excess Amount, Stipulated Loss
     Value percentages, Termination Value percentages and Special Termination
     Value percentages pursuant to Section 3(c)(i) shall be determined by the
     Owner Participant and shall be subject to the verification procedures set
     forth in Exhibit E hereto. Such recalculated Basic Rent, Excess Amount,
     Stipulated Loss Value percentages, Termination Value percentages and
     Special Termination Value percentages shall be set forth in an amendment
     hereto; provided, however, that any such recalculation shall be effective
     regardless of whether such an amendment is executed and delivered.

          (iii)  Each installment of Basic Rent shall be increased or decreased,
     as the case may be, by the Rent Differential. For purposes hereof, "Rent
     Differential" shall mean, as of any Lease Period Date, the difference
     between (i) the aggregate amount of interest due, unpaid and payable on
     such Lease Period Date on the Loan Certificates for the Interest Period
     then ending and (ii) the aggregate amount of interest on the Loan
     Certificates that would have been due and payable on such Lease Period Date
     for the Interest Period then ending if the Loan Certificates had at all
     times during such Interest Period borne interest at a rate equal to 10.0%
     per annum (computed on the basis of a 360-day year of twelve 30-day
     months). As of any Lease Period Date, (A) if the amount determined in
     accordance with clause (i) of the immediately preceding sentence shall be
     greater than the amount determined in accordance with clause (ii) of such
     sentence, the amount of Basic Rent due on such Lease Period Date shall be
     increased by the Rent Differential, and (B) if the amount determined in

                                     -16-

<PAGE>

     accordance with such clause (ii) shall exceed the amount determined in
     accordance with such clause (i), the amount of Basic Rent due on such Lease
     Period Date shall be decreased (but not below zero) by the Rent
     Differential. Lessee shall notify, solely for purposes of the calculation
     of the applicable Rent Differential, the Mortgagee, Lessor and the Owner
     Participant on the day immediately preceding any Lease Period Date of the
     interest actually accruing with respect to the Loan Certificates.

          (iv)  Anything contained in the Participation Agreement or this Lease
     to the contrary notwithstanding, each installment of Basic Rent payable
     hereunder, whether or not adjusted in accordance with this Section 3(c),
     together with the amount of the Excess Amount in respect of the date on
     which such installment is payable, and each payment of Termination Value,
     Special Termination Value, Stipulated Loss Value and the FPO Percentage,
     whether or not adjusted in accordance with this Section 3(c) or Section 8
     of the Tax Indemnity Agreement, and all other amounts excluding Excluded
     Payments payable simultaneously by Lessee pursuant to this Lease, in each
     case, on the date on which such payment is due, shall be in an amount at
     least sufficient to pay in full, and shall be available to be applied by
     Lessor in payment on account of, any payments then required to be made by
     Lessor on account of the principal amount of and interest on the Loan
     Certificates then outstanding. It is agreed that no installment of Basic
     Rent, Prepaid Rent, Termination Value, Special Termination Value,
     Stipulated Loss Value or the FPO Percentage shall be increased or adjusted
     by reason of (A) any attachment or diversion of Rent on account of (x)
     Lessor Liens (including for this purpose Liens that would be Lessor Liens
     but for the proviso to the definition of Lessor Liens) or (y) any Loan
     Participant Lien or other Lien on or against the Trust Estate, any part
     thereof or the Operative Documents arising as a result of claims against
     the Mortgage or a Certificate Holder not related to the transactions
     contemplated by the Operative Documents, (B) any modification of the
     payment terms of the Loan Certificates made without the prior written
     consent of Lessee other than as required or permitted by the Participation
     Agreement, the Lease and any Lease Supplement thereto and the Trust
     Indenture and any Indenture Supplement thereto, or (C) the acceleration of
     any Loan Certificate due to the occurrence of an "Event of Default" (as
     defined in the Trust Indenture) which does not constitute an Event of
     Default hereunder.

          (v)  All adjustments to Basic Rent under this Section 3(c) shall be
     consistent with the requirements of Rev. Proc. 75-21 and Rev. Proc. 75-28,
     to the extent such requirements were originally satisfied, both as modified
     and in effect on the Closing Date, and shall not cause the Lease to be a
     "disqualified leaseback or long-term agreement" within the meaning of
     Section 467 of the Code as amended, and as interpreted at the time of such
     adjustment.

          (d)  Supplemental Rent.  Lessee shall pay (or cause to be paid)
promptly to Lessor, or to whomsoever shall be entitled thereto, any and all
Supplemental Rent constituting Stipulated Loss Value, Termination Value, Special
Termination Value or FPO Percentage as the same shall become due and owing and
all other amounts of Supplemental Rent within five Business Days after demand or
on such date, or within such other relevant period, as may be provided in any

                                     -17-

<PAGE>

Operative Document, and in the event of any failure on the part of Lessee to pay
any Supplemental Rent when due, Lessor shall, except as otherwise provided
herein, have all rights, powers and remedies provided for herein or in any other
Operative Document or by law or equity or otherwise in the case of nonpayment of
Basic Rent. In addition, Lessee shall pay to Lessor as Supplemental Rent an
amount equal to any amount payable by Lessor as Funding Costs, as an Increased
Cost or pursuant to paragraph 4 or 5 of the Loan Certificates as and when such
Funding Costs, Increased Cost or amounts payable under paragraph 4 or 5 of the
Loan Certificates shall be due and payable. Lessee will also pay to Lessor, or
to whomsoever shall be entitled thereto, on demand, as Supplemental Rent, to the
extent permitted by applicable law, interest at the Past Due Rate with respect
to any part of any installment of Basic Rent not paid when due for any period
for which the same shall be overdue and on any payment of Supplemental Rent not
paid when due for the period until the same shall be paid; provided, however,
that in the event that any payment of Basic Rent is made after 11:00 a.m., New
York time, Lessee shall be entitled to a credit against payment of such
Supplemental Rent in an amount equal to the interest actually earned on such
Basic Rent installment for one day.

          (e)  Payments in General.  All payments of Rent (other than Excluded
Payments) payable to Lessor shall be made directly by Lessee by wire transfer of
immediately available funds prior to 11:00 a.m., New York time, on the date of
payment in Dollars, to Lessor at its office at 777 Main Street, Hartford,
Connecticut 06115, Attention: Corporate Trust Administration (M.S.N. -238) (or
such other office of Lessor in the continental United States or such other
account as Lessor shall direct in a notice to Lessee at least 10 Business Days
prior to the date such payment of Rent is due); provided, that so long as the
Trust Indenture shall not have been fully discharged, Lessor hereby directs and
Lessee agrees, that all Basic Rent shall be paid directly to the Mortgagee at
the times and in funds specified in this Section 3(e) at the offices of the
Mortgagee at 750 Main Street, Hartford, Connecticut 06103 Attention: Corporate
Trust Department (or such other office of Mortgagee in the continental United
States or such other account as Mortgagee shall direct in a notice to Lessee at
least 10 Business Days prior to the date such payment of Basic Rent is due).
Excluded Payments shall be paid in Dollars in immediately available funds to the
Person to whom payable at the address of such Person specified in Section 14 of
the Participation Agreement.

     Notwithstanding anything to the contrary contained herein, if any date on
which a payment of Rent (other than Basic Rent) becomes due and payable is not a
Business Day then such payment shall be made on the next succeeding Business Day
and no interest shall accrue on the amount of such payment, if such payment is
made on such next succeeding Business Day.

          (f)  Rent Rebate.  Lessor agrees to pay to Lessee, as a rebate of
Rent, an amount equal to any amount paid to Lessor as Funding Profits so long as
no Event of Default or Section 14(a), (b), (f) or (g) Default shall have
occurred and be continuing, provided that, if such Event of Default or Default
shall subsequently be cured by Lessee or waived by Lessor, such amount shall be
paid to Lessee.

                                     -18-
<PAGE>

          (g)  Prepayments of Certain Rent Payments.  To the extent, if any,
that there shall not have been received by the Mortgagee at the office of the
Mortgagee referred to in Section 3(e) by 11:00 a.m., New York time, on the
Commencement Date from Lessor, an amount equal to the Excess Amount payable for
such date, Lessee shall advance to Lessor on such date an amount equal to the
Excess Amount not so paid (such amount being herein called "Prepaid Rent");
provided that Lessee will also pay to the Mortgagee, on demand, as Supplemental
Rent, to the extent permitted by applicable law, interest at the Past Due Rate
on any Prepaid Rent not paid when due for any period for which the same shall be
overdue. Any Prepaid Rent pursuant to this Section 3(g) shall, unless otherwise
reimbursed to Lessee, be offset against installments of Basic Rent or
Supplemental Rent in the order in which they become due, subject to the last
sentence of this paragraph. Lessor agrees to reimburse Lessee in the manner and
subject to the conditions provided in the following sentence for (x) the Prepaid
Rent so paid by Lessee determined as of the date such payment was made, plus (y)
the Supplemental Rent so paid by Lessee pursuant to this Section 3(g), plus (z)
accrued interest on the unreimbursed portion thereof at a rate per annum equal
to 2% over the Debt Rate from the date such amount is paid by Lessee to but not
including the date of each such reimbursement (such amounts to be reimbursed
being herein called the "Reimbursement Amount"). Notwithstanding anything
contained in this Section to the contrary, Lessor shall have no obligation to
pay Lessee the Reimbursement Amount and Lessee shall not be entitled to offset
any Prepaid Rent against installments of Basic Rent or Supplemental Rent if an
Event of Default or a Section 14(a), (b), (f) or (g) Default shall have occurred
and be continuing on the date such amount is due and payable, provided that, if
such Event of Default or Section 14(a), (b), (f) or (g) Default shall
subsequently be cured by Lessee or waived by Lessor, then the obligation of the
Lessor to pay the Reimbursement Amount shall be reinstated and shall be
effective on and after the date such Event of Default or Section 14(a), (b), (f)
or (g) Default shall no longer be continuing or has been so waived. So long as
no Event of Default or Section 14(a), (b), (f) or (g) Default has occurred and
is continuing, Lessee may with written notice to the Owner Participant and the
Mortgagee offset (without duplication) against each succeeding payment (other
than as limited by the proviso to this sentence) due from Lessee to Persons
other than the Certificate Holders, the Mortgagee and the Lessor in its
individual capacity (including, without limitation, Basic Rent, Supplemental
Rent, payments due under Section 9, 10, 15 and 19 hereof, payments due under the
Tax Indemnity Agreement, payments due to Persons other than the Certificate
Holders, the Mortgagee and the Lessor in its individual capacity under Section 7
of the Participation Agreement and any other amount due hereunder to Lessor),
until Lessee has been fully reimbursed for the Reimbursement Amount; provided,
however, that in the case of any payment due from Lessee which is distributable
under the terms of the Trust Indenture, Lessee's right of offset shall be
limited to amounts distributable to Lessor or the Owner Participant thereunder.
No such offset or aggregate combined effect of separate offsets shall reduce the
amount of any installment of Basic Rent to an amount insufficient, together with
all other amounts payable simultaneously by Lessee, to enable Lessor to pay in
full the payments then required to be made on account of the principal amount of
and interest on and other amounts payable under the Loan Certificates then
outstanding.

     SECTION 4. Lessor's Representations and Warranties.  LESSOR LEASES AND
LESSEE TAKES THE AIRCRAFT "AS IS, WHERE IS." LESSEE ACKNOWLEDGES AND AGREES THAT
AS

                                     -19-

<PAGE>

BETWEEN LESSOR AND LESSEE (A) THE AIRFRAME AND EACH ENGINE ARE OF A SIZE,
DESIGN, CAPACITY AND MANUFACTURE SELECTED BY AND ACCEPTABLE TO LESSEE, (B)
LESSEE IS SATISFIED THAT THE AIRFRAME AND EACH ENGINE ARE SUITABLE FOR THEIR
PURPOSES, (C) NEITHER LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A
DEALER IN PROPERTY OF SUCH KIND, AND (D) NEITHER LESSOR IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST AGREEMENT, THE MORTGAGEE NOR ANY
PARTICIPANT MAKES, HAS MADE OR SHALL BE DEEMED TO HAVE MADE, AND EACH WILL BE
DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE TITLE, AIRWORTHINESS, CONDITION, VALUE, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR
ANY PART THEREOF AS TO THE QUALITY OF THE MATERIALS OR WORKMANSHIP WITH RESPECT
TO THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF ANY LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except as
set forth in Sections 9(f)(vi) (in the case of the Owner Participant) and
9(g)(ii) (in the case of Lessor in its individual capacity) of the Participation
Agreement as to title and except that Lessor, in its individual capacity, (i)
represents and warrants that on the Closing Date, Lessor shall have received
whatever title to the Aircraft was conveyed to it by Lessee, (ii) represents and
warrants that on the Closing Date the Aircraft shall be free of Lessor Liens
(including for this purpose Liens that would be Lessor Liens but for the proviso
to the definition of Lessor Liens) attributable to it in its individual
capacity, (iii) covenants that it will not, through its own actions or
inactions, in such capacity, interfere in Lessee's or any Sublessee's quiet
enjoyment of the Aircraft unless this Lease shall have been declared in default
pursuant to Section 15 hereof and (iv) agrees that it will not directly or
indirectly create, incur, assume or suffer to exist any Lessor Lien attributable
to it in its individual capacity on or with respect to the Airframe or any
Engine or any portion of the Trust Estate. None of the provisions of this
Section 4 or any other provision of this Agreement shall be deemed to amend,
modify or otherwise affect the representations, warranties or other obligations
(express or implied) of the Manufacturer or any subcontractor or supplier of the
Manufacturer with respect to the Airframe, Engines, or any Parts, or to release
the Manufacturer, or any such subcontractor or supplier, from any such
representation, warranty or obligation. Unless a Default or an Event of Default
shall have occurred and be continuing, Lessor agrees to make available to Lessee
such rights as Lessor may have under any warranty with respect to the Aircraft
made by the Manufacturer or any of its subcontractors or suppliers and any other
claims against the Manufacturer or any such subcontractor or supplier with
respect to the Aircraft, all pursuant to and in accordance with the terms of the
Owner Trustee's Purchase Agreement.

     SECTION 5.  Return of the Aircraft.

                                     -20-
<PAGE>

          (a)  Condition Upon Return.  Unless purchased by Lessee pursuant to
Section 9(b) or 19(b) hereof, upon termination of this Lease at the end of the
Basic Term or any Renewal Term or pursuant to Section 9(c) or 15, Lessee, at its
own expense, will return the Aircraft to Lessor at Lessee's maintenance base
located at San Francisco International Airport (or any principal maintenance
base established by Lessee in one of the forty-eight contiguous states of the
United States subsequent to the date hereof); provided, however, that if Lessor
shall have made the request for storage pursuant to Section 5(d) hereof, Lessee
shall return the Aircraft to Lessor at the site of the storage. If requested in
writing by Lessor at least thirty days prior to the return of the Aircraft,
Lessee will, in lieu of the return contemplated by the preceding sentence, at
Lessee's cost and expense, ferry the Aircraft to a commercial airport on
Lessee's route system in one of the forty-eight contiguous states of the United
States which can accommodate aircraft of the same type as the Aircraft, provided
that Lessee will not be required to provide any storage pursuant to Section 5(d)
if Lessor requests such a ferry flight. At the time of such return, (A) Lessee
will, at its own cost and expense, unless otherwise requested by Lessor to
retain the existing registration of the Aircraft, cause the Aircraft, if it is
not then so registered, to be registered under the laws of the United States
with the FAA in the name of the Lessor or its designee, provided that Lessee
shall be relieved of its obligations under this sentence if such registration is
prohibited by reason of the failure of Lessor, the Owner Participant or Lessor's
designee to be eligible on such date to own an aircraft registered with the
Federal Aviation Administration, and (B) the Airframe will be fully equipped
with the Engines (or Acceptable Alternate Engines) installed thereon. Also, at
the time of such return, Lessor shall have good title to such Airframe and
Engines or Acceptable Alternate Engines, and such Airframe and Engines or
Acceptable Alternate Engines (i) shall be certified (or, if not then registered
under the Federal Aviation Act by reason of the proviso to clause (A) in the
preceding sentence or because Lessor has not so requested the registration of
the Aircraft, shall hold a valid certificate of airworthiness issued by the
country of registry and be eligible for certification by the FAA) as an
airworthy aircraft by the Federal Aviation Administration and shall have all
mandatory FAA airworthiness directives applicable to the Aircraft, issued prior
to the date of return which require compliance prior to such time, terminated,
(ii) shall be free and clear of all Liens (other than Lessor Liens (including
for this purpose Liens that would be Lessor Liens but for the proviso to the
definition of Lessor Liens) and Loan Participant Liens) and rights of third
parties under pooling, interchange, overhaul, repair or other similar agreements
or arrangements, (iii) shall be in a regular passenger configuration and in as
good a condition as when delivered by Manufacturer to Lessee, ordinary wear and
tear excepted, and otherwise in the condition required to be maintained under
Section 7 hereof (notwithstanding any Sublease theretofore in effect), (iv) in
the event that Lessee shall not then be using a continuous maintenance program
with respect to the Airframe immediately prior to such return but instead shall
have been using a block overhaul program with respect to the Airframe, then (A)
such block overhaul program shall have been approved by all necessary
governmental approvals of the country under the laws of which the Aircraft shall
then have been registered and (B) the Airframe shall have remaining until the
next scheduled block overhaul at least 25% of the allowable hours between block
overhauls permitted under the block overhaul program then used by Lessee, (v) in
the event that Lessee during the period of operation of the Aircraft immediately
prior to such return shall not have been using an on-condition maintenance
program with respect to the Engines (or Acceptable Alternate Engines), Lessee
agrees that the average number

                                     -21-
<PAGE>

of hours or cycles of operation (whichever shall be applicable under the
maintenance program then in use with respect to such Engines (or Acceptable
Alternate Engines)) on such Engines (or Acceptable Alternate Engines) remaining
until the next scheduled engine heavy maintenance shall be at least 25% of the
hours or cycles (whichever is applicable) between engine heavy maintenance
allowed under the maintenance program then in use with respect to such Engines
(or Acceptable Alternate Engines), (vi) shall have all Lessee's and any
Sublessee's exterior markings removed or painted over with the areas thereof
refinished to match adjacent areas, and (vii) shall be in a state of cleanliness
suitable under Lessee's normal service standards for operation in Lessee's
revenue passenger service and in all such cases the Aircraft shall not have been
discriminated against whether by reason of its leased status or otherwise in
maintenance, use, operation or in any other manner whatsoever.

     If clause (iv) of the first paragraph of this Section 5(a) shall be
applicable but the Airframe does not meet the conditions specified in said
clause (iv), Lessee shall pay or cause to be paid to Lessor, concurrently with
the return thereof, a Dollar amount computed by multiplying (i) 120% of the
direct cost to Lessee (based upon the direct cost to Lessee for similar aircraft
in the fleet of Lessee) during the preceding 12 months of performing an airframe
block overhaul of the type referred to in such clause (iv) by (ii) a fraction of
which (x) the numerator shall be the excess of 25% of the hours of operation
allowable between such block overhauls over the actual number of hours of
operation remaining on the Airframe to the next such block overhaul and (y) the
denominator shall be the number of hours of operation allowable between such
block overhauls in accordance with such block overhaul program.

     If clause (v) of the first paragraph of this Section 5(a) shall be
applicable but the Engines (or Acceptable Alternate Engines) do not meet the
conditions specified in said clause (v), Lessee shall pay or cause to be paid to
Lessor, concurrently with the return thereof, a Dollar amount computed by
multiplying (i) 120% of the direct cost to Lessee (based upon the direct cost to
Lessee for similar aircraft in the fleet of Lessee) during the preceding 12
months of performing for an engine of the same model as the Engines (or
Acceptable Alternate Engines) the scheduled engine heavy maintenance under the
maintenance program then used by Lessee for engines of the same model as the
Engines (or Acceptable Alternate Engines) by (ii) a fraction of which (x) the
numerator shall be the excess of 25% of the hours of cycles (whichever is
applicable) of operation of one Engine between engine heavy maintenance
allowable under the maintenance program then in use with respect to such Engines
(or Acceptable Alternate Engines) over the actual average number of hours or
cycles or operation on such Engines (or Acceptable Alternate Engines) remaining
until the next such scheduled engine heavy maintenance and (y) the denominator
shall be the number of hours or cycles allowable between such scheduled engine
heavy maintenance.

     During the last twelve months of the Term (unless Lessee shall have elected
to purchase the Aircraft or renew this Lease in accordance with the terms of
this Lease), with reasonable notice, Lessee will cooperate, and cause any
Sublessee to cooperate, at Lessor's sole cost, in all reasonable respects with
the efforts of Lessor to sell or lease the Aircraft, including, without
limitation, permitting prospective purchasers or lessees to inspect the Aircraft
and any maintenance records

                                     -22-
<PAGE>

relating to the Aircraft then required to be retained by the FAA or by the
comparable government agency of the country in which the Aircraft is registered,
all in accordance with Section 12 hereof, provided that any such cooperation
shall not interfere with the normal operation or maintenance of the Aircraft by,
or the business of, Lessee or any Sublessee.

     For purposes of this Section 5(a), any maintenance program used by Lessee
for airframes (including the Airframe) substantially similar to the maintenance
program described in the excerpts from "United Air Lines 757 Maintenance
Program" furnished to Lessor and the Owner Participant shall be considered a
continuous maintenance program (and not a block maintenance program) and any
engine maintenance program used by Lessee for engines (including the Engines)
substantially similar to the maintenance program described in such "United Air
Lines 757 Maintenance Program" shall be considered an on-condition maintenance
program.

          (b)  Return of Other Engines.  In the event that an Acceptable
Alternate Engine shall be delivered with the returned Airframe as set forth in
paragraph (a) of this Section 5, Lessee, concurrently with such delivery, will,
at no cost to Lessor, furnish, or cause to be furnished, to Lessor a full
warranty (as to title) bill of sale with respect to each such Acceptable
Alternate Engine, in form and substance reasonably satisfactory to Lessor
(together with an opinion of counsel (which may be Lessee's General Counsel) to
the effect that such full warranty bill of sale has been duly authorized and
delivered and is enforceable in accordance with its terms and that such
Acceptable Alternate Engine is free and clear of all Liens other than Lessor
Liens (including for this purpose Liens that would be Lessor Liens but for the
proviso to the definition of Lessor Liens)), against receipt from Lessor of a
bill of sale evidencing the transfer, without recourse or warranty (except as to
the absence of Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso to the definition of Lessor Liens)) by Lessor
to Lessee or its designee of all of Lessor's right, title and interest in and to
any Engine not installed on the Airframe at the time of the return of the
Airframe.

          (c)  Fuel; Manuals.  Upon the return of the Airframe upon any
termination of this Lease in accordance with paragraph (a) of this Section 5,
(i) Lessee shall have no obligation with respect to the amount of fuel or oil
contained in the Airframe, and all fuel or oil remaining on board the Airframe
shall be the property of Lessor without charge, and (ii) Lessee shall deliver or
cause to be delivered to Lessor all original logs, manuals and data and
inspection, modification and overhaul records (which logs, manuals, data and
records shall be true and accurate as of the date of return) required to be
maintained with respect to the Airframe, the Engines or any Part thereof in
accordance with Section 7(a) hereof.

          (d)  Storage Upon Return.  If, at any time at least 30 days prior to
the end of the Basic Term or any Renewal Term or pursuant to Section 9(c) or
Section 15, Lessee receives from Lessor a written request for storage of the
Aircraft upon its return hereunder, Lessee will (unless Lessor has requested a
ferry flight in accordance with the second sentence of Section 5(a)) provide
Lessor, or cause Lessor to be provided, with storage facilities for the Aircraft
(at Lessor's risk and at Lessor's cost for insurance, maintenance and Lessee's
reasonable out-of-pocket expenses other than storage fees) for a period not
exceeding forty-five (45) days (and upon prior written notice from

                                     -23-
<PAGE>

Lessor to Lessee given at least 10 days prior to the end of such 45-day period,
at Lessor's risk and at Lessor's cost for insurance, maintenance and Lessee's
reasonable out-of-pocket expenses including storage fees, for an additional
period not exceeding sixty (60) days) commencing on the date of such
termination, at a location in the forty-eight contiguous states of the United
States selected by Lessee (and reasonably acceptable to Lessor) and used as a
location for the storage of aircraft. Lessee shall, at Lessor's written request,
maintain insurance (if reasonably available) for the Aircraft during such period
and shall be reimbursed by Lessor for the premiums thereon.

          (e)  Severable Parts.  At any time after Lessee has advised Lessor
that it has determined not to renew this Lease or purchase the Aircraft, or the
Aircraft is otherwise to be returned to Lessor, Lessee shall, at Lessor's
written request, advise Lessor of the nature and condition of all severable
Parts owned by Lessee which have been used by Lessee during the prior six months
and which Lessee has or intends to remove from the Aircraft as permitted by
Section 8 hereof. Lessor may, at its option, upon 30 days written notice to
Lessee, purchase any or all of such Parts that are non-proprietary from Lessee
upon the expiration of the Term at their then fair market value. For the
purposes of this Section 5(e), the term "non-proprietary" shall mean any Parts
other than Parts developed and produced by Lessee.

     SECTION 6.  Liens.  Lessee will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to the Aircraft, title
thereto or any interest therein or in this Lease, except (i) the respective
rights of Lessor as owner of the Aircraft and Lessee as herein provided
(including any Sublease permitted pursuant to Section 7(b)), the Lien of the
Trust Indenture, and any other rights existing pursuant to the Operative
Documents (ii) Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso to the definition of Lessor Liens) and Loan
Participant Liens, (iii) Liens for Taxes of Lessee (or any Sublessee) either not
yet due or being contested in good faith by appropriate proceedings so long as
such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein, (iv) materialmen's,
mechanics', workmen's, repairmen's, employees' or other like liens arising in
the ordinary course of Lessee's or any Sublessee's business securing obligations
that are not overdue for a period of more than 30 days or are being contested in
good faith by appropriate proceedings so long as during such 30-day period there
is not, or such proceedings do not involve, any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein, (v)
Liens arising out of any judgment or award against Lessee (or any Sublessee),
unless the judgment secured shall not, within 60 days after the entry thereof,
have been discharged, vacated, reversed or execution thereof stayed pending
appeal or shall not have been discharged, vacated or reversed within 60 days
after the expiration of such stay, so long as during such 60-day period there is
not, or any such judgment or award does not involve, any material risk of the
sale, forfeiture or loss of the Airframe or any Engine or any interest therein
(unless Lessee (or any Sublessee) shall have provided a bond or other security
in an amount and on terms reasonably satisfactory to Lessor in respect of such
risk), and (vi) any other Lien with respect to which Lessee (or any Sublessee)
shall have provided a bond or other security in an amount and under terms
reasonably satisfactory to Lessor. Lessee will promptly, at its own expense,
take (or cause to be taken) such actions as may be necessary duly to discharge
any such Lien not excepted above if the same shall arise at any time.

                                      -24-
<PAGE>

     SECTION 7.  Registration, Maintenance and Operation; Possession and
Subleases; Insignia.

          (a)  (1)  Registration and Maintenance.  Lessee, at its own cost and
expense, shall (or shall cause any Sublessee to): (i) upon delivery of the
Aircraft, cause the Aircraft to be duly registered in the name of Lessor, and,
subject to subparagraph (3) of this Section 7(a), to remain duly registered in
the name of Lessor, under the Federal Aviation Act (except as otherwise required
by applicable law or to the extent that such registration cannot be effected
because of Lessor's or the Owner Participant's failure to comply with the
citizenship or other eligibility requirements for registration of aircraft under
such Act), provided that Lessor and the Owner Participant shall execute and
deliver all such documents as Lessee (or any Sublessee) may reasonably request
for the purpose of effecting and continuing such registration, and Lessee shall
cause the Trust Indenture to be duly recorded and maintained of record as a
first mortgage on the Aircraft; (ii) maintain, service, repair, and overhaul (or
cause to be maintained, serviced, repaired, and overhauled) the Aircraft (x) so
as to keep the Aircraft in as good a condition as when delivered, ordinary wear
and tear excepted, and in such condition as may be necessary to enable the
airworthiness certification for the Aircraft to be maintained in good standing
at all times (other than during temporary periods of storage in accordance with
applicable regulations) under (I) the Federal Aviation Act, except when all
Lessee's Boeing Model 757-222 aircraft (powered by engines of the same type as
those with which the Airframe shall be equipped at the time of such grounding)
registered in the United States have been grounded by the FAA, or (II) the
applicable laws of any other jurisdiction in which the Aircraft may then be
registered from time to time, except when all Lessee's Boeing Model 757-222
aircraft (powered by engines of the same type as those with which the Aircraft
shall be equipped at the time of such grounding) registered in such jurisdiction
have been grounded by the aeronautical authorities of such jurisdiction and (y)
in substantially the same manner as Lessee (or any Sublessee) maintains,
services, repairs and overhauls similar aircraft of the same type operated by
Lessee (or such Sublessee) in similar circumstances and without in any way
discriminating against the Aircraft, whether by reason of its leased status or
otherwise; or such other manner as shall have been approved by Lessor and
Mortgagee; (iii) maintain or cause to be maintained all records, logs and other
materials required to be maintained in respect of the aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered; and (iv) promptly furnish or cause to be
furnished to Lessor and the Owner Participant such information as may be
required to enable Lessor or the Owner Participant to file any reports required
to be filed by Lessor or the Owner Participant with any governmental authority
because of Lessor's ownership of the Aircraft.

          (2)  Operation.  Lessee will not (or permit any Sublessee to)
maintain, use, service, repair, overhaul or operate the Aircraft in violation of
any law or any rule, regulation, order or certificate of any government or
governmental authority (domestic or foreign) having jurisdiction, or in
violation of any airworthiness certificate, license or registration relating to
the Aircraft issued by any such authority, except that, after providing Lessor
with a certificate of its President, any Vice President, the Treasurer or any
Assistant Treasurer stating all relevant facts with respect thereto,

                                     -25-
<PAGE>

Lessee or any Sublessee may contest in good faith the validity or application of
any such law, rule, regulation, order, certificate, license or registration (or
violation or alleged violation of the same) in any reasonable manner which does
not significantly adversely affect the Lessor, the Owner Participant, any
Certificate Holder or any of their respective legal and economic interests in or
to the Aircraft or any Operative Documents but only so long as such proceedings
do not involve any risk of criminal liability or any unindemnified significant
risk of civil liability to Lessor or the Owner Participant. If the indemnities
or insurance from the United States Government specified in Section 11(f), or
some combination thereof in amounts equal to amounts required by Section 11(f)
hereof, have not been obtained, Lessee will not operate the Aircraft, or suffer
or permit any Sublessee or any other Person to operate the Aircraft, in or to
any area excluded from coverage by any insurance required to be maintained by
the terms of Section 11 or in or to any known war zone outside of the United
States; provided, however, that the failure of Lessee to comply with the
provisions of this sentence shall not give rise to an Event of Default hereunder
where such failure is attributable to a hijacking, medical emergency, equipment
malfunction, weather conditions, navigational error or other isolated
extraordinary event beyond the control of Lessee and Lessee is using good faith
efforts to remedy such failure as soon as is reasonably practicable.

               (3) Reregistration.  At any time after the close of the calendar
year in which occurs the seventh anniversary of the Closing Date, Lessor shall,
at the request and sole expense of Lessee, cooperate with Lessee and take all
actions requested by Lessee to change the country of registration of the
Aircraft in compliance with and subject to all of the terms of Section 9(e) of
the Participation Agreement.

          (b) Possession and Subleases.  Lessee will not, without the prior
written consent of Lessor, sublease or otherwise in any manner deliver, transfer
or relinquish possession of the Airframe or any Engine or install or permit any
Engine to be installed on any airframe other than the Airframe; provided that,
so long as no Default or Event of Default shall have occurred and be continuing
at the time of such sublease, delivery, transfer or relinquishment of possession
or installation, and so long as the action to be taken shall not deprive the
Mortgagee of the lien of the Trust Indenture on the Airframe or any Engine and
Lessee and any Sublessee shall continue to comply with the provisions of
Sections 6, 7(a) and 11, Lessee may, without the prior written consent of
Lessor:

          (1) subject the Engines or engines then installed on the Airframe to
     normal pooling or similar arrangements, in each case customary in the
     airline industry and entered into by Lessee (or any Sublessee) in the
     ordinary course of its business, provided that if Lessor's title to any
     Engine shall be divested under any such agreement or arrangement, such
     divestiture shall be deemed to be an Event of Loss with respect to such
     Engine and Lessee shall (or shall cause Sublessee to) comply with Section
     19(b) hereof in respect thereof;

          (2) deliver possession of the Airframe or any Engine to the
     manufacturer thereof or to any other Person for testing, service, repair,
     maintenance or overhaul work on the Airframe or Engine or any Part of any
     thereof or for alterations or modifications in or

                                      -26-
<PAGE>

     additions to such Airframe or Engine to the extent required or permitted by
     the terms of Section 8(c) hereof;

          (3) install an Engine on an airframe owned by Lessee (or any
     Sublessee) which airframe is free and clear of all Liens, except: (A)
     Permitted Liens and those which apply only to the engines (other than
     Engines), appliance, parts, instruments, appurtenances, accessories,
     furnishings and other equipment (other than Parts) installed on such
     airframe (but not to the airframe as an entirety), (B) the rights of third
     parties under interchange agreements, provided that Lessor's title to such
     Engine shall not be divested as a result thereof and (C) mortgage Liens or
     other security interests, provided, that (as regards this clause (C)), such
     mortgage Liens or other security interests effectively provide that such
     Engine shall not become subject to the lien of such mortgage or security
     interest, notwithstanding the installation thereof on such airframe;

          (4) install an Engine on an airframe leased to Lessee (or any
     Sublessee) or purchased by Lessee (or any Sublessee) subject to a
     conditional sale or other security agreement, provided that (x) such
     airframe is free and clear of all Liens, except: (A) the rights of the
     parties to the lease or conditional sale or other security agreement
     covering such airframe, or their assignees, and (B) Liens of the type
     permitted by subparagraph (iii) of this paragraph (b) and (y) such lease,
     conditional sale or other security agreement effectively provides that such
     Engine shall not become subject to the Lien of such lease, conditional sale
     or other security agreement, notwithstanding the installation thereof on
     such airframe;

          (5) install an Engine on an airframe owned by Lessee (or any
     Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or
     any Sublessee) subject to a conditional sale or other security agreement
     under circumstances where neither subparagraph (iii) nor subparagraph (iv)
     of this paragraph (b) is applicable, provided that such installation shall
     be deemed an Event of Loss with respect to such Engine and Lessee shall (or
     shall cause any Sublessee to) comply with Section 19(b) hereof in respect
     thereof, Lessor not intending hereby to waive any right or interest it may
     have to or in such Engine under applicable law until compliance by Lessee
     with such Section 10(b);

          (6) transfer (or permit any Sublessee to transfer) possession of the
     airframe or any Engine to the United States of America or any
     instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet
     Program for a period, including all permissible renewal periods, that does
     not extend beyond the end of the Term so long as Lessee (or any Sublessee)
     shall promptly notify Lessor upon transferring possession of the Airframe
     or any Engine to the United States of America or any agency or
     instrumentality thereof pursuant to the Civil Reserve Air Fleet Program;

          (7) transfer possession of the Airframe or any Engine to the United
     States of America or any instrumentality or agency thereof pursuant to a
     contract, a copy of which

                                      -27-
<PAGE>

     shall be provided to Lessor, provided that the term of such contract,
     including all permissible renewal periods, shall not continue beyond the
     end of the Term; or

          (8) so long as the Sublessee is not subject to a proceeding or final
     order under applicable bankruptcy, insolvency or reorganization laws on the
     date the sublease is entered into, Lessee may, at any time (subject to the
     notice requirements specified in the third to last paragraph of this
     Section 7(b)), in its sole discretion, enter into a sublease with (1) a
     U.S. Air Carrier, (2) after the close of the calendar year in which occurs
     the seventh anniversary of the Closing Date, any Permitted Sublessee that
     is domiciled in a country that maintains normal diplomatic relations with
     the United States (which for purposes of this Section 7(b) (viii) shall
     include Taiwan and any other country that is similarly situated) or (3)
     after the close of the calendar year in which occurs the seventh
     anniversary of the Closing Date, any other Person approved in writing by
     the Lessor, which approval shall not be unreasonably withheld; provided,
     however, (A) that no sublease, including all permissible renewal periods,
     entered into pursuant to this clause (viii), shall extend beyond the Term,
     unless Lessee shall have irrevocably committed to purchase the Aircraft or
     renew this Lease in accordance with the terms hereof at the end of the Term
     to a date beyond the latest permissible expiration date of such sublease,
     and (B) that prior to entering into such Sublease, Lessee shall provide
     assurances reasonably satisfactory to Lessor and the Mortgagee to the
     effect that the provisions of Section 11 hereof have been complied with
     after giving effect to such Sublease.

     The rights of any Sublessee or other transferee who receives possession by
reason of a transfer permitted by this paragraph (b) (other than the transfer of
an Engine which is deemed an Event of Loss) shall be subject and subordinate to
all the terms of this Lease, including, without limitation, Lessor's (and, so
long as the Trust Indenture is in effect, the Mortgagee's (as Lessor's
assignee)) rights to repossession pursuant to Section 15 hereof, and Lessee
shall remain primarily liable hereunder for the performance of all of the terms
of this Lease, and the terms of any such Sublease shall not permit any Sublessee
to take any action not permitted to be taken by Lessee in this Lease with
respect to the Aircraft. No pooling agreement, sublease or other relinquishment
of possession shall in any way discharge or diminish any of Lessee's obligations
to Lessor hereunder or constitute a waiver of Lessor's rights or remedies
hereunder. Lessor agrees, for the benefit of Lessee (and any Sublessee) and for
the benefit of any mortgagee or other holder of a security interest in any
engine owned by Lessee (or any Sublessee), any lessor of any engine leased to
Lessee (or any Sublessee) and any conditional vendor of any engine purchased by
Lessee (or any Sublessee) subject to a conditional sale agreement or any other
security agreement, that no interest shall be created hereunder in any engine so
owned, leased or purchased and that neither Lessor not its successors or assigns
will acquire or claim, as against Lessee (or any Sublessee) or any such
mortgagee, lessor or conditional vendor or other holder of a security interest
or any successor or assignee of any thereof, any right, title or interest in
such engine as the result of such engine being installed on the Airframe. Lessee
shall give the Owner Participant and the Mortgagee (i) prior written notice of
any Sublease to be entered into pursuant to the terms hereof and (ii) upon
written request, a copy of any Sublease hereunder which has a term of more than
one year.

                                      -28-
<PAGE>

     Lessor acknowledges that any Wet Lease or similar arrangement under which
Lessee maintains operational control of the Aircraft shall not constitute a
delivery, transfer or relinquishment of possession for purposes of this Section
7(b). Lessor acknowledges that any consolidation or merger of Lessee or
conveyance, transfer or lease of all or substantially all of Lessee's assets
permitted by the Operative Documents shall not be prohibited by this Section
7(b).

     No Sublease permitted pursuant to this Section shall permit any further
sub-leasing of the Aircraft.

          (c) Insignia.  On or prior to the Closing Date, or as soon thereafter
as practicable, Lessee agrees to affix and maintain (or cause to be affixed and
maintained) in the cockpit of the Airframe adjacent to the registration
certificate therein and on each Engine a nameplate bearing the inscription:

              Leased From

          The Connecticut National Bank, not in its individual capacity but
          solely as Owner Trustee, Owner and Lessor

and, for so long as the Airframe and each Engine shall be subject to the Lien of
the Trust Indenture, bearing the following additional inscription:

               Mortgaged To

          State Street Bank and Trust Company of Connecticut, National
          Association, as Mortgagee

(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Lessor or successor Mortgagee, in each case as permitted
under the Operative Documents).

     Except as above provided, Lessee will not allow the name of any person,
association or corporation to be placed on the Airframe or on any Engine as a
designation that might be interpreted as a claim of ownership; provided, that
nothing herein contained shall prohibit Lessee (or any Sublessee) from placing
its customary colors and insignia on the Airframe or any Engine.

     SECTION 8.  Replacement and Pooling of Parts; Alterations, Modifications
and Additions.

          (a) Replacement of Parts. Lessee, at its own cost and expense, will
promptly replace or cause to be replaced all Parts which may from time to time
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use for any reason whatsoever, except
as otherwise provided in Section 8(c). All replacement Parts shall be owned by
Lessee free and clear of all Liens (except Permitted Liens or pooling
arrangements permitted by Section 8(b) hereof and replacement Parts temporarily
installed on an emergency basis)
                                      -29-
<PAGE>

and shall be in as good an operating condition as and shall have a value,
utility and remaining useful life substantially equal to the Parts replaced
assuming such replaced Parts were in the condition and repair required to be
maintained by the terms hereof. All Parts (other than Obsolete Parts, as defined
below) at any time removed from the Airframe or any Engine shall remain the
property of Lessor, no matter where located, until such time as such Parts shall
be replaced by Parts which meet the requirements for replacement Parts specified
above. Immediately upon any replacement Part becoming incorporated or installed
in or attached to the Airframe or any Engine, without further act (subject only
to Permitted Liens and any pooling arrangement permitted by Section 8(b) hereof
and except replacement Parts temporarily installed on an emergency basis), (i)
such replacement Part shall become the property of Lessor and shall become
subject to this Lease and be deemed a Part for all purposes hereof to the same
extent as the Parts originally incorporated or installed in or attached to the
Airframe or such Engine and (ii) the replaced Part shall no longer be the
property of Lessor and shall no longer be deemed a Part hereunder.

          (b) Pooling of Parts. Any Part removed from the Airframe or any Engine
as provided in Section 8(a) hereof may be subjected by Lessee (or any Sublessee)
to a pooling arrangement of the type which is permitted by Section 7(b)(i)
hereof; provided, that the Part replacing such removed Part shall be
incorporated or installed in or attached to such Airframe or Engine in
accordance with Section 8(a) as promptly as practicable (but in no event later
than the end of the Term) after the removal of such removed Part. In addition,
any replacement Part, when incorporated or installed in or attached to the
Airframe or on any Engine in accordance with such Section, may be owned by any
third party subject to such a pooling arrangement, provided, that Lessee (or any
Sublessee), at its expense, as promptly thereafter as practicable (but in no
event later than the end of the Term), either (i) causes such replacement Part
to become the property of Lessor free and clear of all Liens other than
Permitted Liens or (ii) replaces such replacement Part with a further
replacement Part owned by Lessee (or any Sublessee) which shall become the
property of Lessor, free and clear of all Liens other than Permitted Liens.

          (c) Alterations, Modifications and Additions. Lessee, at its own
expense, will make (or cause to be made) such alterations and modifications in
and additions to the Airframe and Engines as may be required to be made during
the Term to meet the applicable standards of the FAA or any applicable
regulatory agency or body of any other jurisdiction in which the Aircraft may
then be registered; provided, however, that after providing Lessor with a
certificate of its President, any Vice President, the Treasurer or any Assistant
Treasurer stating all relevant facts with respect thereto, Lessee or any
Sublessee may, in good faith, contest the validity or application of any such
law, rule, regulation or order in any reasonable manner which does not
significantly adversely affect the Lessor, the Owner Participant, any
Certificate Holder or any of their respective legal and economic interests in or
to such Airframe or Engines or any Operative Documents, but only so long as such
proceedings do not involve any risk of criminal liability or any material risk
of civil liability to Lessor, the Owner Participant, the Mortgagee or any
Certificate Holder. In addition, Lessee (or any Sublessee), at its own expense,
may from time to time make such alterations and modifications in and additions
to the Airframe or any Engine as Lessee (or any Sublessee) may deem desirable in
the
                                      -30-
<PAGE>

proper conduct of its business, including removal of Parts which Lessee (or any
Sublessee) deems to be obsolete or no longer suitable or appropriate for use on
the Airframe or such Engine (such parts, "Obsolete Parts"); provided that no
such alteration, modification, removal or addition diminishes the value, utility
or remaining useful life of the Airframe or such Engine below the value, utility
or remaining useful life thereof immediately prior to such alteration,
modification, removal or addition assuming the Airframe or such Engine was then
in the condition required to be maintained by the terms of this Lease, or cause
the Aircraft to become "limited use property", except that the value (but not
the utility or remaining useful life) of the Airframe or any Engine may be
reduced by the value of Obsolete Parts which shall have been removed so long as
the aggregate value at the time of removal of all Obsolete Parts which shall
have been removed and not replaced shall not exceed $200,000. All Parts
incorporated or installed in or attached or added to the Airframe or an Engine
as the result of such alteration, modification or addition (except those parts
which Lessee has leased from others and which may be removed by Lessee pursuant
to the next sentence) (the "Additional Parts") shall, without further act,
become the property of Lessor. Notwithstanding the foregoing sentence, Lessee
(or any Sublessee) may, at any time during the Term, so long as no Event of
Default shall have occurred and be continuing, remove or suffer to be removed
any Additional Part, provided that such Additional Part (i) is in addition to,
and not in replacement of or substitution for, any Part originally incorporated
or installed in or attached to such Airframe or any Engine at the time of
delivery thereof hereunder or any Part in replacement of or substitution for any
such Part, (ii) is not required to be incorporated or installed in or attached
or added to the Airframe or any Engine pursuant to the terms of Section 7 hereof
or the first sentence of this paragraph (c) and (iii) can be removed from the
Airframe or such Engine without diminishing the value, utility or remaining
useful life of the Airframe or such Engine which the Airframe or such Engine
would have had at such time had such alteration, modification or addition not
occurred. Upon the removal thereof as provided above, such Additional Part shall
no longer be deemed the property of Lessor or part of the Airframe or Engine
from which it was removed. Any Additional Part not removed as above provided
prior to the return of the Airframe or Engine to Lessor hereunder shall remain
the property of Lessor.

     SECTION 9.  Voluntary Termination.

          (a) Termination Event. (1) So long as no Default which affects the
Fair Market Sales Value of the Aircraft or Event of Default shall have occurred
and be continuing, Lessee shall have the right for any reason to terminate this
Lease on July 1, 2005 and July 1, 2009.

              (2) So long as no Default which affects the Fair Market Sales
Value of the Aircraft or Event of Default shall have occurred and be continuing,
Lessee shall have the right to terminate this Lease on any Lease Period Date
during the Basic Term occurring on or after the close of the calendar year in
which occurs the seventh anniversary of the Closing Date if Lessee shall have
made a good faith determination, which shall be evidenced by a certificate of
any financial

                                      -31-
<PAGE>

officer of Lessee, who is a Treasurer or more senior officer (which certificate
shall set forth the basis for such determination (which basis may include,
without limitation, unfavorable pricing to Lessee as contrasted to other leased
aircraft)), that the Aircraft is surplus to Lessee's requirements or
economically obsolete to Lessee.

              (3) Lessee shall give to Lessor and Mortgagee at least one hundred
eighty (180) days' (and not more than three hundred sixty (360) days') revocable
advance written notice of Lessee's intention to so terminate this Lease (any
such notice, a "Termination Notice") specifying (i) the Lease Period Date on
which Lessee intends to terminate this Lease in accordance with this Section 9
(such specified date, a "Termination Date") and (ii) if Section 9(a)(2) hereof
is applicable, that Lessee has determined that the Aircraft is surplus to its
requirements or economically obsolete to it. If Lessee revokes such Termination
Notice, Lessee shall pay to Lessor any and all out-of-pocket expenses of Lessor
or the Owner Participant attributable to such revocation. Lessee shall, on not
more than two occasions, have the right to revoke a Termination Notice by giving
notice to Lessor at least thirty (30) days prior to the proposed Termination
Date and, if such Termination Notice is not so revoked, such Termination Notice
shall become irrevocable thirty (30) days prior to the Termination Date. In
addition, if Section 9(a)(1) is applicable, Lessee agrees that it shall deliver
to the Mortgagee and Lessor at least ten (10) days' irrevocable notice if it
intends to purchase the Aircraft pursuant to Section 9(b).

          (b) Option to Purchase. If Lessee exercises its right to terminate
this Lease under Section 9(a)(1) and gives its irrevocable notice pursuant to
Section 9(a)(3) to purchase the Aircraft pursuant to this Section 9(b), then on
the Termination Date specified in Section 9(a), Lessee shall purchase the
Aircraft at the greater of (i) the Special Termination Value on the Termination
Date, or (ii) its Fair Market Sales Value on the Termination Date. In such
event, Lessor shall, without recourse or warranty (except as to the absence of
Lessor Liens (including for this purpose Liens that would be Lessor Liens but
for the proviso to the definition of Lessor Liens)), sell the Aircraft to Lessee
upon, at Lessee's option, either (1) the payment by Lessee in immediately
available funds in an amount equal to the sum of (A) all unpaid Basic Rent with
respect to the Aircraft due on or prior to such Termination Date (other than
Basic Rent payable in advance and due on such Termination Date) and all unpaid
Supplemental Rent with respect to the Aircraft due on or prior to such
Termination Date plus (B) all reasonable expenses incurred by Lessor and the
Owner Participant in connection with such sale except those incurred and payable
by Lessor as a result of an appraisal conducted pursuant to Section 19(c) hereof
plus (C) the greater of (x) the Special Termination Value for the Aircraft,
computed as of the Termination Date or (y) the Fair Market Sales Value of the
Aircraft on the Termination Date; or (2) (A) the assumption by Lessee in form
and substance satisfactory to Lessor, pursuant to Section 2.12 of the Trust
Indenture, of all the obligations of Lessor under the Trust Indenture and the
Loan Certificates and (B) the payment in immediately available funds in an
amount equal to the sum of (x) all unpaid Basic Rent with respect to the
Aircraft due on or prior to such Termination Date (other than Basic Rent payable
in advance and due on such Termination Date) and all unpaid Supplemental Rent
with respect to the Aircraft due on or prior to such Termination Date plus (y)
all reasonable expenses incurred by Lessor in connection with such sale except
those incurred and payable by Lessor and the Owner Participant as a result of an
appraisal
                                      -32-
<PAGE>

conducted pursuant to Section 19(c) hereof plus (z) the excess of the greater of
(I) the Special Termination Value for the Aircraft, computed as of the
Termination Date and (II) the Fair Market Sales Value of the Aircraft on the
Termination Date, over the unpaid Original Amount of Loan Certificates
outstanding as of such date. Upon payment in full of the amounts required to be
paid and the performance of all acts required to be performed by Lessee pursuant
to the preceding sentence, (i) the obligation of Lessee to pay Basic Rent
hereunder shall terminate with respect to the Aircraft and (ii) this Lease shall
terminate on the Termination Date.

          (c) Optional Sale of the Aircraft. In the event that Lessee shall have
terminate this Lease under Section 9(a)(1) but shall not have elected to
purchase the Aircraft pursuant to Section 9(b), or Lessee shall have terminated
this Lease under Section 9(a)(2), then during the period commencing with the
date of the Termination Notice until the proposed Termination Date, Lessee, as
non-exclusive agent for Lessor, shall have the right, but not the obligation, to
attempt in good faith to obtain bids in Dollars for the purchase of the Aircraft
and, in the event it receives any bid, Lessee shall, within five Business Days
after receipt thereof, advise Lessor in writing of the amount and terms of such
bid, and the name and address of the party or parties submitting such bid, (it
being understood that if Lessee shall not elect to attempt to obtain bids for
the Aircraft, then Lessor may sell the Aircraft at such price as it, in its sole
discretion, shall determine, provided that Lessor and the Owner Participant
shall have used commercially reasonable efforts to obtain the highest price).
After Lessee shall have so advised Lessor of all bids received, the Owner
Participant, any Affiliate thereof or any Person contacted by the Owner
Participant may submit a further bid or bids to Lessee not later than five (5)
Business Days prior to the Termination Date proposed by Lessee (unless Lessee
shall have revoked the Termination Notice specifying such proposed Termination
Date). Subject to the next succeeding sentence, on or before the Termination
Date, subject to the release of all mortgage and security interests with respect
to the Aircraft under the Trust Indenture: (1) Lessee shall deliver the
Aircraft, or cause the Aircraft to be delivered to Lessor or the purchaser, in
the same manner and in the same condition and otherwise in accordance with all
the terms of this Lease as if delivery were made to Lessor pursuant to Section
5, and Lessee shall duly transfer to Lessor title to any engine installed on the
Airframe and not owned by Lessor, all in accordance with the terms of Section 5,
(2) Lessor shall comply with the terms of the Trust Indenture and shall, without
recourse or warranty (except as to the absence of Lessor Liens (including for
this purpose Liens that would be Lessor Liens but for the proviso to the
definition of Lessor Liens)), subject to prior or concurrent payment by Lessee
of all amounts due under clause (3) of this sentence, sell the Aircraft for cash
in Dollars to the highest bidder(s) (evaluated on a net cash basis) therefor,
the total selling price realized at such sale to be retained by Lessor, and (3)
Lessee shall simultaneously pay or cause to be paid to Lessor in the manner
provided in Section 3(e), (A) if the proceeds of the sale of the Aircraft so
sold, net of reasonable costs and expenses incurred by Lessor and the Owner
Participant in connection therewith, are less than the Termination Value or, in
the case of a termination pursuant to Section 9(a)(1), Special Termination
Value, for the Aircraft computed as of the Termination Date, the difference in
Dollars, and (B) all unpaid Basic Rent due on or prior to the Termination Date
(other than Basic Rent payable in advance and due on such Termination Date) and
all unpaid Supplemental Rent with respect to the Aircraft due on or prior to
such Termination Date,
                                      -33-
<PAGE>

and upon receiving all such payments referred to in clauses (2) and (3) above
Lessor simultaneously will transfer to Lessee, without recourse or warranty
(except as to the absence of Lessor Liens (including for this purpose Liens that
would be Lessor Liens but for the proviso to the definition of Lessor Liens)),
all of Lessor's right, title and interest in and to any Engines constituting
Part of the Aircraft which were not sold with the Aircraft. Notwithstanding the
preceding sentence, but subject to Lessee's right to purchase the Aircraft
pursuant to Section 9(b) hereof and to Lessee's right to revoke a Termination
Notice as set forth above, Lessor may elect to retain title to the aircraft. If
Lessor so elects, Lessor shall give to Lessee written notice of such election at
least fifteen (15) Business Days prior to the Termination Date accompanied by an
irrevocable undertaking by the Owner Participant to make available to the Lessor
for payment to the Mortgagee on the Termination Date the amount required to pay
in full the unpaid Original Amount of the Loan Certificates outstanding on the
Termination Date. Upon receipt of notice of such an election by Lessor and the
accompanying undertaking by the Owner Participant, Lessee shall cease any
efforts to obtain bids as provided above and shall reject all bids theretofore
or thereafter received. On the Termination Date, Lessor shall (subject to the
payment by Lessee of all Rent due on or prior to such date as set forth below)
pay in full the unpaid Original Amount of the Loan Certificates outstanding on
the Termination Date plus interest accrued thereon through the Termination Date
together with all other amounts due thereunder as a result of the payment
thereof due on the Loan Certificates (including Funding Costs, if any) and,
provided that the Loan Certificates are paid as aforesaid, Lessee shall deliver
the Airframe and Engines or engines to Lessor in accordance with Section 5 and
shall pay all Basic Rent due on or prior to the Termination Date (other than
Basic Rent payable in advance and due on such Termination Date) and all unpaid
Supplement Rent due on or prior to such Termination Date. In the event of any
sale or retention of the Aircraft by Lessor and upon compliance by Lessee with
the provisions of this paragraph, the obligation of Lessee to pay Basic Rent or
any other amounts hereunder shall cease to accrue. If no sale shall have
occurred on the Termination Date or Lessor has not, after making its election
referred to above, made the payment contemplated by the preceding sentence, then
this Lease shall continue in full force and effect as to the aircraft and Lessee
may give one or more additional Termination Notices. Upon payment of all amounts
that may then be due hereunder, this Lease shall terminate. Lessor may, but
shall be under no duty to, solicit bids, inquire into the efforts of Lessee to
obtain bids or otherwise take any action in connection with any such sale other
than to transfer (in accordance with the foregoing provisions) to the purchaser
named in the highest bid certified by Lessee to Lessor all of Lessor's right,
title and interest in the Aircraft, against receipt of the payments provided
herein. Neither the Lessee nor any Affiliate of the Lessee shall have any right
to purchase the Aircraft under this Section 9(c).

          (d) Termination as to Engines. So long as no Event of Default shall
have occurred and be continuing, Lessee shall have the right at its option at
any time during the Term, on at least 30 days' prior written notice, to
terminate this Lease with respect to any Engine. In such event, and prior to the
date of such termination, Lessee shall (i) replace such Engine hereunder by
complying with the terms of Section 10(b) to the same extent as if an Event of
Loss had occurred with respect to such Engine, and (ii) provide evidence that
such substitution will not affect the value, utility and remaining useful life
of the Aircraft, and Lessor shall transfer title to the replaced Engine as
provided in Section 5(b).

                                      -34-
<PAGE>

     SECTION 10.  Loss, Destruction, Requisition, etc.

          (a) Event of Loss with Respect to the Aircraft. Upon the occurrence of
an Event of Loss with respect to the Airframe or the Airframe and the Engines
and/or engines then installed thereon, Lessee shall (1) forthwith (and in any
event, within fifteen days after such occurrence) give Lessor written notice of
such Event of Loss and (2) within 60 days after such occurrence, give Lessor
written notice of its election to perform one of the following options (it being
understood that the failure to give such notice shall be deemed to be an
election of the option set forth in (i) below):

          (i) On the Stipulated Loss Value Date occurring next after the earlier
     of (x) the 100/th/ day following the occurrence of such Event of Loss or
     (y) the third Business Day following receipt by the loss payee of the
     insurance proceeds in respect of such Event of Loss (but not earlier than
     the Business Day next succeeding the 65/th/ day following the occurrence of
     such Event of Loss) (the applicable day being the "Loss Payment Date"),
     Lessee shall, to the extent not previously paid to Lessor or Mortgagee, as
     the case may be, as insurance proceeds, pay or cause to be paid to Lessor
     as specified in Section 3(e) hereof the Stipulated Loss Value of the
     Aircraft computed as of the aforesaid Stipulated Loss Value Date plus, if
     such Stipulated Loss Value Date is a Lease Period Date, Basic Rent due on
     such Lease Period Date (excluding Basic Rent payable in advance on such
     Lease Period Date), or

          (ii) Not later than the Business Day next succeeding the 100/th/ day
     following the occurrence of such Event of Loss, Lessee shall, provided that
     no Default or Event of Default shall have occurred and be continuing,
     substitute an aircraft or an airframe or an airframe and one or more
     engines, as the case may be, in accordance with the terms of this Section
     10 and of the Trust Indenture, provided that if Lessee shall have elected
     to make a substitution under this clause (ii) and shall fail for any reason
     to make such substitution in accordance with the terms hereof and of the
     Trust Indenture, Lessee shall make the payments required by clause (i)
     above as and when due thereunder.

     At such time as Lessor shall have received the amounts specified in
subparagraph (i) above, together with all other amounts that then may be due
hereunder (including, without limitation, all Basic Rent due on or before the
date of such payment (other than Basic Rent payable in advance and due on such
payment date) and all Supplemental Rent due on or before the date of such
payment), under the Participation Agreement and under the Tax Indemnity
Agreement, (1) the obligation of Lessee to pay the installments of Basic Rent,
Stipulated Loss Value, Termination Value, Special Termination Value or any other
amount shall cease to accrue, (2) this Lease shall terminate, (3) Lessor will
comply with the terms of the Trust Indenture and transfer to or at the direction
of Lessee, without recourse or warranty (except as to the absence of Lessor
Liens (including for this purpose Liens that would be Lessor Liens but for the
proviso to the definition of Lessor Liens)), all Lessor's right, title and
interest in and to the Airframe and the Engines and furnish to or at the
direction of Lessee a bill of sale in form and substance reasonably satisfactory
to Lessee (or any Sublessee), evidencing such transfer, and (4) Lessee will be
subrogated to all claims of Lessor, if any, against

                                      -35-
<PAGE>

third parties to the extent the same relate to physical damage to or loss of the
Airframe and any Engines which were subject to such Event of Loss.

     In the event Lessee shall elect to substitute an aircraft (or an airframe
or an airframe and one or more engines, as the case may be) Lessee shall, at its
sole cost and expense, (A) convey or cause to be conveyed to Lessor a Boeing
Model 757-200 aircraft (or an airframe or an airframe and an engine which,
together with the Engines or Engine constituting a part of the Aircraft but not
installed thereon at the time of such Event of Loss, constitute the Aircraft)
free and clear of all Liens (other than Permitted Liens) and having at least the
value, utility and remaining useful life of the Aircraft subject to such Event
of Loss assuming that the Aircraft had been maintained in accordance with this
Lease; provided that any airframe so substituted hereunder shall be of the same
or improved make and model as that initially leased hereunder; and provided
further that any airframe so substituted hereunder shall have the year of its
manufacture not more than one year prior to the year of manufacture of the
airframe initially leased hereunder, and (B) prior to or at the time of any such
substitution, Lessee (or any Sublessee), at its own expense, will (1) furnish
Lessor with a full warranty bill of sale and an FAA bill of sale, in form and
substance reasonably satisfactory to Lessor, evidencing such transfer of title,
(2) cause a Lease Supplement and an Indenture Supplement to be duly executed by
Lessee and filed for recording pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Airframe was registered at the time of such Event of Loss and cause a financing
statement or statements or other requisite documents (including precautionary
lease financing statements) to be filed in such place or places as necessary in
order to perfect the security interests therein created by or pursuant to the
Trust Indenture (or, with regard to the precautionary lease financing
statements, pursuant to this Lease), (3) furnish the Lessor with such evidence
of Lessee's title to such replacement aircraft (with respect to any replacement
aircraft owned by Lessee at the time of such substitution) and compliance with
the insurance provisions of Section 11 with respect to such substituted property
as Lessor or the Mortgagee may reasonably request, (4) provide to Lessor, Owner
Participant and Mortgagee all of the documentation required to be provided by it
pursuant to Section 5.6 of the Trust Indenture satisfactory in form and
substance to each of them, (5) provide Lessor, Owner Participant and the
Mortgagee a reasonably satisfactory opinion of counsel, which counsel shall be
reasonably acceptable to Lessor, the Owner Participant and the Mortgagee that
Lessor (as Lessor under this Lease) and the Mortgagee (as assignee of all right,
title and interest of Lessor under the Lease) shall be entitled to the benefits
and protections of Section 1110 of the Bankruptcy Code with respect to the
aircraft substituted hereunder, and (6) provide Owner Participant an opinion of
independent tax counsel, selected by Owner Participant and reasonably
satisfactory to Lessee, to the effect that such substitution will not result in
any adverse tax consequences to Lessor and/or the Owner Participant (it being
understood that if such opinion cannot be given Lessee may indemnify Owner
Participant for such adverse tax consequences in lieu of such opinion in a
manner reasonably satisfactory in form and substance (including Lessee's ability
to pay such indemnity) to the Owner Participant), and the Owner Participant and
Lessor simultaneously will comply with the terms of the Trust Indenture and
transfer to or at the direction of Lessee, without recourse or warranty (except
as to the absence of Lessor Liens (including for this purpose Liens that would
be Lessor Liens but for the proviso to

                                      -36-
<PAGE>

the definition of Lessor Liens)), all of Lessor's right, title and interest, if
any, in and to the Aircraft or the Airframe and one or more Engines, as the case
may be, with respect to which such Event of Loss occurred and furnish to or at
the direction of Lessee a bill of sale in form and substance reasonably
satisfactory to Lessee, evidencing such transfer. Lessee will be subrogated to
all claims of Lessor, if any, against third parties to the extent the same
relate to physical damage to or loss of the Airframe and any Engine which were
subject to such Event of Loss. For all purposes hereof, the property so
substituted shall after such transfer be deemed part of the property leased
hereunder and shall be deemed an "Aircraft," "Airframe" and "Engine," as the
case may be, as defined herein. No Event of Loss with respect to the Airframe or
the Airframe and the Engines or engines then installed thereon for which
substitution has been elected pursuant to Section 10(a)(ii) hereof shall result
in any reduction in Basic Rent.

          (b) Event of Loss with Respect to an Engine. Upon the occurrence of an
Event of Loss with respect to an Engine under circumstances in which there has
not occurred an Event of Loss with respect to the Airframe, Lessee shall
forthwith (and in any event, within fifteen days after such occurrence) give
Lessor written notice thereof and shall, within 30 days after the occurrence of
such Event of Loss, convey or cause to be conveyed to Lessor, as replacement for
the Engine with respect to which such Event of Loss occurred, title to an
Acceptable Alternate Engine free and clear of all Liens (other than Permitted
Liens, which engine may upon its transfer to Lessor become subject to any and
all Permitted Liens). Prior to or at the time of any such conveyance, Lessee, at
its own expense, will (i) furnish Lessor with a warranty (as to title) bill of
sale, in form and substance reasonably satisfactory to Lessor, with respect to
such Acceptable Alternate Engine, (ii) cause a Lease Supplement and Indenture
Supplement to be duly executed by Lessee or Lessor, as the case may be, and to
be filed for recording pursuant to the Federal Aviation Act, or the applicable
laws, rules and regulations of any other jurisdiction in which the Airframe may
then be registered and cause a financing statement or statements or other
requisite documents (including precautionary lease financing statements) to be
filed in such place or places as necessary in order to perfect the security
interests therein created by or pursuant to the Trust Indenture (or, with regard
to the precautionary lease financing statements, pursuant to this Lease), (iii)
furnish Lessor with such evidence of Lessee's title to such Acceptable Alternate
Engine (with respect to any Acceptable Alternate Engine owned by Lessee at the
time of such substitution) and compliance with the insurance provisions of
Section 11 hereof with respect to such Acceptable Alternate Engine as Lessor may
reasonably request, and (iv) provide to Lessor, Owner Participant and Mortgagee
all of the documentation required to be provided by it pursuant to Section 5.6
of the Trust Indenture satisfactory in form and substance to each of them, and
Lessor will comply with the terms of the Trust Indenture and transfer to or at
the direction of Lessee without recourse or warranty (except as to absence of
Lessor Liens (including for this purpose Liens that would be Lessor Liens but
for the proviso to the definition of Lessor Liens)) all of Lessor's right, title
and interest, if any, in and to (A) the Engine with respect to which such Event
of Loss occurred and furnish to or at the direction of Lessee a bill of sale in
form and substance reasonably satisfactory to Lessee, evidencing such transfer
and (B) all claims, if any, against third parties, for damage to or loss of the
Engine subject to such Event of Loss, and such Engine shall thereupon cease to
be an Engine leased hereunder. For all purposes hereof, each such Acceptable
Alternate Engine substituted hereunder shall, after such conveyance, be deemed
part
                                      -37-
<PAGE>

of the property leased hereunder, and shall be deemed an "Engine." No Event
of Loss with respect to an Engine under the circumstances contemplated by the
terms of this paragraph (b) shall result in any reduction in Basic Rent.

          (c) Application of Payments from Governmental Authorities for
Requisition of Title, etc.  Any payments (other than insurance proceeds, the
application of which is provided for in Section 11) received at any time by
Lessor or by Lessee from any governmental authority or other person with respect
to an Event of Loss resulting from the theft, disappearance, condemnation,
confiscation or seizure of, or requisition of title to or use of, the Airframe
or any Engine, other than a requisition for use by the United States Government
or other government of registry of the Aircraft or any instrumentality or agency
of any thereof not constituting an Event of Loss, will be applied as follows:

          (1) if payments are received with respect to the Airframe (or the
     Airframe and any Engine or engines then installed thereon), (A) unless the
     same are replaced pursuant to the last paragraph of Section 10(a), after
     reimbursement of Lessor (as provided in Section 7.1 of the Trust Agreement)
     for reasonable costs and expenses, so much of such payments remaining as
     shall not exceed the Stipulated Loss Value and the other amounts payable
     under Section 10(a) hereof required to be paid by Lessee pursuant to
     Section 10(a), shall be applied in reduction of Lessee's obligation to pay
     Stipulated Loss Value and the other amounts payable under Section 10(a)
     hereof, if not already paid by Lessee, or, if already paid by Lessee, shall
     be applied to reimburse Lessee for its payment of Stipulated Loss Value and
     such other amounts, and following the foregoing application, the balance,
     if any, of such payments shall be distributed between Lessee and Lessor as
     their respective interests may appear; or (B) if such property is replaced
     pursuant to the last paragraph of Section 10(a), such payments shall be
     paid over to or retained by, Lessee; provided, that Lessee shall have fully
     performed or, concurrently therewith, will fully perform the terms of the
     last paragraph of Section 10(a) with respect to the Event of Loss for which
     such payments are made; and

          (2) if such payments are received with respect to an Engine under
     circumstances contemplated by Section 10(b) hereof, so much of such
     payments remaining after reimbursement of Lessor (as provided for in
     Section 7.1 of the Trust Agreement) for reasonable costs and expenses shall
     be paid over to, or retained by, Lessee, provided that Lessee shall have
     fully performed, or concurrently therewith will perform, the terms of
     Section 10(b) with respect to the Event of Loss for which such payments are
     made.

          (d) Requisition for Use of the Aircraft by the United States
Government or Government of Registry of the Aircraft. In the event of the
requisition for use of the Airframe and the Engines or engines installed on the
Airframe during the Term by the United States Government or any other government
of registry of the Aircraft or any instrumentality or agency thereof, Lessee
shall promptly notify Lessor of such requisition, and all of Lessee's rights and
obligations under this Lease Agreement with respect to the Aircraft shall
continue to the same extent as if such requisition

                                      -38-
<PAGE>

had not occurred (except to the extent that any failure or delay in repairing or
maintaining the Aircraft shall have been caused by such requisition), provided
that if such Airframe and Engines or engines installed thereon are not returned
by the United States Government or such other government of registry of the
Aircraft or any instrumentality or agency thereof prior to the end of the Term,
Lessee shall be obligated to return the Airframe and such Engines or engines to
Lessor pursuant to, and in all other respects in compliance with the provisions
of, Section 5 promptly on the date of such return by the United States
Government or such other government of registry of the Aircraft or any
instrumentality or agency thereof. If Lessee shall fail to return the Aircraft
on or before the end of the Term, such failure shall constitute an Event of Loss
which shall be deemed to have occurred on the last day of the Term, provided,
however, that Lessor may notify Lessee in writing on or before the twentieth day
prior to the last day of the Term that, in the event Lessee shall fail by reason
of such requisition to return the Airframe and such Engines or engines on or
before the end of the Term, such failure shall not be deemed an Event of Loss.
Upon the giving of such notice and such failure to return by the end of the
Term, Lessee shall be relieved of all of its obligations pursuant to the
provisions of Section 5 (but not under any other Section), except that if any
engine not owned by Lessor shall then be installed on the Airframe, Lessee will,
at no cost to Lessor, furnish, or cause to be furnished, to Lessor a full
warranty (as to title) bill of sale with respect to each such engine, in form
and substance reasonably satisfactory to Lessor (together with an opinion of
counsel (which may be Lessee's General Counsel) to the effect that such full
warranty bill of sale has been duly authorized and delivered and is enforceable
in accordance with its terms and that such engines are free and clear of Liens
other than Lessor Liens (including for this purpose Liens that would be Lessor
Liens but for the proviso to the definition of Lessor Liens) and Loan
Participant Liens), against receipt from Lessor of a bill of sale evidencing the
transfer, without recourse or warranty (except as to the absence of Lessor Liens
(including for this purpose Liens that would be Lessor Liens but for the proviso
to the definition of Lessor Liens)), by Lessor to Lessee or its designee of all
of Lessor's right, title and interest in and to any Engine constituting part of
the Aircraft but not then installed on the Airframe. All payments received by
Lessor or Lessee from the United States Government or any other government of
registry of the Aircraft or any instrumentality or agency thereof for the use of
such Airframe and Engines or engines during the Term shall be paid over to, or
retained by, Lessee (or, if directed by Lessee, any Sublessee); and all payments
received by Lessor or Lessee from the United States Government or other
government of registry of the Aircraft or any instrumentality or agency thereof
for the use of such Airframe and Engines or engines after the end of the Term
shall be paid over to, or retained by, Lessor unless Lessee shall have exercised
its purchase option hereunder, or there is a deemed Event of Loss hereunder, in
which case such payments shall be made to Lessee; provided, however, that in the
event that an Event of Loss described in clause (iv)(b) of the definition
thereof has occurred, fifty percent of all such payments in excess of all
amounts payable by Lessee to Lessor under Sections 9, 10 and 19 hereof shall be
paid over to, or retained by, Lessor.

          (e) Requisition for Use of an Engine by the United States Government
or the Government of Registry of the Aircraft. In the event of the requisition
for use of an Engine by the United States Government or any other government of
registry of the Aircraft or any agency or instrumentality thereof (other than in
the circumstances contemplated by subsection (d)), Lessee shall

                                      -39-
<PAGE>

replace (or cause any Sublessee to replace) such Engine hereunder and Lessor and
Lessee (or Sublessee as the case may be) shall comply with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect to
such Engine. Upon compliance with Section 10(b) hereof, any payments received by
Lessor or Lessee from such government with respect to such requisition shall be
paid over to, or retained by, Lessee.

          (6) Application of Payments During Existence of Events of Default. Any
amount referred to in this Section 10 which is payable to or retainable by
Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or any
Sublessee) if at the time of such payment or retention a Default or an Event of
Default shall have occurred and be continuing, but shall be held by or paid over
to Lessor as security for the obligations of Lessee under this Lease and, if
Lessor declares this Lease to be in default pursuant to Section 15 hereof,
applied against Lessee's obligations hereunder as and when due. At such time as
there shall not be continuing any such Default or Event of Default, such amount
shall be paid to Lessee to the extent not previously applied in accordance with
the preceding sentence.

     SECTION 11. Insurance.

          (a)  Public Liability and Property Damage Insurance.  (1)  Except as
provided in clause (2) of this Section 11(a), and subject to self-insurance to
the extent permitted by Section 11(d), Lessee will carry or cause to be carried
at its or any Sublessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance with respect to the
Aircraft, (A) in an amount not less than the greater of (x) the amounts of
comprehensive airline liability insurance from time to time applicable to
aircraft owned or leased and operated by Lessee of the same type as the Aircraft
and (y) $[________]per occurrence, (B) of the type and covering the same risks
as from time to time applicable to aircraft owned or leased and operated by
Lessee of the same type as the Aircraft and (C) which is maintained in effect
with insurers of recognized responsibility (or, in the case of a Sublessee, is
maintained in effect with insurers who are recognized as responsible in the
world aviation community); provided, however, that Lessee need not maintain
cargo liability insurance, or may maintain such insurance in an amount less than
$300,000,000.00 per occurrence, as long as the amount of cargo liability
insurance, if any, maintained with respect to the Aircraft is the same as the
cargo liability insurance, if any, maintained for other Boeing Model 757-222
aircraft owned, leased or operated by Lessee.

          (2) During any period that the Airframe or an Engine, as the case may
be, is on the ground and not in operation, Lessee may carry or cause to be
carried as to such non-operating property, in lieu of the insurance required by
clause (1) above, and subject to self-insurance to the extent permitted by
Section 11(d), insurance by insurers of recognized responsibility otherwise
conforming with the provisions of said clause (1) except that (A) the amounts of
coverage shall not be required to exceed (but shall be no less than) the amounts
of comprehensive airline liability insurance from time to time applicable to
aircraft owned, leased or operated by Lessee of the same type as such non-
operating property and which are on the ground and not in operation; and (B) the

                                     -40-

<PAGE>

scope of the risks covered and the type of insurance shall be the same as from
time to time shall be applicable to aircraft owned, leased or operated by Lessee
of the same type as such non-operating property and which are on the ground and
not in operation.

          (b) Insurance Against Loss or Damage to the Aircraft. (1) Except as
provided in  clause (2) of this Section 11(b), and subject to the provisions of
Section 11(d) permitting self-insurance, Lessee shall maintain or cause to be
maintained in effect, at its or any Sublessee's expense, with insurers of
recognized responsibility, all-risk aircraft hull insurance covering the
Aircraft and fire and extended coverage and all-risk property damage insurance
covering Engines and Parts while temporarily removed from the Aircraft and not
replaced by similar components (including aircraft hull war risk, allied perils,
governmental confiscation and expropriation (other than by the government of
registry of the Aircraft) and hijacking insurance, if and to the extent any of
such aircraft hull war risk, allied perils, governmental confiscation and
expropriation and hijacking insurance is generally maintained by Lessee (or any
Sublessee) with respect to other aircraft owned, leased or operated by Lessee
(or such Sublessee) on the same or similar geographic routes); provided, that
such insurance shall at all times, while the Aircraft is subject to this Lease,
be for an amount (taking into account self-insurance to the extent permitted by
Section 11(d)) not less than the Stipulated Loss Value for the Aircraft; and
provided further, that all-risk property damage insurance covering Engines and
Parts while temporarily removed from the Aircraft and not replaced by similar
components need be obtained only to the extent available at reasonable cost (as
reasonably determined by Lessee).  In the case of a loss with respect to an
engine (other than an Engine) installed on the Airframe in circumstances which
do not constitute an Event of Loss with respect to the Airframe, Lessor shall
promptly remit any payment made to it of any insurance proceeds in respect of
such loss to Lessee or any other third party that is entitled to receive such
proceeds.

     Except during a period when a Section 14(a), (b), (f) or (g) Default or an
Event of Default has occurred and is continuing, all losses will be adjusted by
Lessee with the insurers.  As between Lessor and Lessee, it is agreed that all
insurance payments received as the result of the occurrence of an Event of Loss
will be applied as follows:

          (x)   if such payments are received with respect to the Airframe (or
     the Airframe and the Engines installed thereon), (i) unless such property
     is replaced pursuant to the last paragraph of Section 10(a), so much of
     such payments remaining, after reimbursement of Lessor (as provided in
     Section 7.1 of the Trust Agreement) and the Owner Participant for
     reasonable costs and expenses, as shall not exceed the Stipulated Loss
     Value and the other amounts payable under Section 10(a) hereof required to
     be paid by Lessee pursuant to Section 10(a) hereof shall be applied in
     reduction of Lessee's obligation to pay such Stipulated Loss Value and the
     other amounts payable under Section 10(a) hereof, if not already paid by
     Lessee, or, if already paid by Lessee, shall be applied to reimburse Lessee
     for its payment of such Stipulated Loss Value and the other amounts payable
     under Section 10(a) hereof, and the balance, if any, of such payments
     remaining thereafter will be paid over to, or retained by, Lessee (or if
     directed by Lessee, any Sublessee); or (ii) if such property is

                                     -41-

<PAGE>

     replaced pursuant to the last paragraph of Section 10(a), such payments
     shall be paid over to, or retained by, Lessee (or if directed by Lessee,
     any Sublessee), provided that Lessee shall have fully performed or,
     concurrently therewith, will fully perform the terms of the last paragraph
     of Section 10(a) with respect to the Event of Loss for which such payments
     are made; and

          (y)  if such payments are received with respect to an Engine under the
     circumstances contemplated by Section 10(b) hereof, so much of such
     payments, remaining after reimbursement of Lessor (as provided in Section
     7.1 of the Trust Agreement) and the Owner Participant for reasonable costs
     and expenses, shall be paid over to, or retained by, Lessee (or if directed
     by Lessee, any Sublessee), provided that Lessee shall have fully performed
     or, concurrently therewith, will fully perform the terms of Section 10(b)
     with respect to the Event of Loss for which such payments are made.

               (1) During any period that the Aircraft is on the ground and not
     in operation, Lessee may carry or cause to be carried, in lieu of the
     insurance required by clause (1) above, and subject to self-insurance to
     the extent permitted by Section 11(d), insurance otherwise conforming with
     the provisions of said clause (1) except that the scope of the risks and
     the type of insurance shall be the same as from time to time applicable to
     aircraft owned, leased or operated by Lessee of the same type as the
     Aircraft similarly on the ground and not in operation, provided that,
     subject to self-insurance to the extent permitted by Section 11(d), Lessee
     shall maintain insurance against risk of loss or damage to the Aircraft in
     an amount at least equal to the Stipulated Loss Value of the Aircraft
     during such period that the Aircraft is on the ground and not in operation.

          (c) Reports, etc.  Lessee will furnish, or cause to be furnished, to
Lessor, the Mortgagee and the Owner Participant, on or before the Closing Date
and each annual anniversary of the Closing Date during the Term a report, signed
by Rollins, Burdick, Hunter of Illinois, Inc., or any other independent firm of
insurance brokers reasonably acceptable to Lessor, which brokers may act as
Lessee's insurance brokers on a regular basis (the "Insurance Brokers"),
describing in reasonable detail the hull and liability insurance (and property
insurance for detached engines and parts) then carried and maintained with
respect to the Aircraft and stating the opinion of such firm that (a) such
insurance complies with the terms hereof and (b) that such insurance together
with any self-insurance permitted hereby provides coverage that are in
substantially similar forms, are of such types, insure against such risks, and
have limits within the range of limits as are customarily carried by U.S.
carriers; provided, however, that the opinion set forth in clause (b) shall not
be required if the Insurance Broker then generally does not provide such an
opinion or will provide such an opinion only for material additional cost;
provided, that all information contained in the foregoing report shall not be
made available by Lessor, the Mortgagee, the Owner Participant or the
Certificate Holders to anyone except (A) to prospective and permitted
transferees of Lessor's, the Mortgagee's, the Owner Participant's or a
Certificate Holder's interest or their respective counsel, independent certified
public accountants, independent insurance brokers or other agents, who agree to
hold such

                                     -42-

<PAGE>

information confidential, (B) to Lessor's, the Mortgagee's, the Owner
Participant's or a Certificate Holder's counsel or independent certified public
accountants, independent insurance brokers or other agents who agree to hold
such information confidential, (C) as may be required by any statute, court or
administrative order or decree or governmental ruling or regulation or (D) as
may be necessary for purposes of protecting the interests of any such Person or
for enforcement of this Lease by Lessor or the Mortgagee; provided, however,
that any and all disclosures permitted by clauses (C) and (D) above shall be
made only to the extent necessary to meet the specific requirements or needs of
the Persons to whom such disclosures are hereby permitted. Lessee will cause
such Insurance Brokers to agree to advise Lessor, the Mortgagee, the Owner
Participant and the Certificate Holders in writing of any default in the payment
of any premium and of any other act or omission on the part of Lessee of which
it has knowledge and which might invalidate or render unenforceable, in whole or
in part, any insurance on the Aircraft and to advise such persons in writing at
least 30 days (10 days in the case of lapse for non-payment of premium and 7
days in the case of war risk and allied perils coverage) prior to the
cancellation (but not scheduled expiration), lapse or material adverse change of
any insurance maintained pursuant to this Section 11, provided that if the
notice period specified above is not reasonably obtainable, the Insurance
Brokers shall provide for as long a period of prior notice as shall then be
reasonably obtainable. In addition, Lessee will also cause such Insurance
Brokers to deliver to Lessor, the Mortgagee, the Owner Participant and the
Certificate Holders, on or prior to the date of expiration of any insurance
policy referenced in a previously delivered certificate of insurance, a new
certificate of insurance, substantially in the same form as delivered by Lessee
to such parties on the Closing Date except for changes in the report or the
coverage consistent with the terms hereof. In the event that Lessee or any
Sublessee shall fail to maintain or cause to be maintained insurance as herein
provided, Lessor, Owner Participant or the Mortgagee may at its sole option, but
shall be under no duty to, provide such insurance and, in such event, Lessee
shall, upon demand, reimburse Lessor, Owner Participant or the Mortgagee, as
Supplemental Rent, for the cost thereof to Lessor, Owner Participant or the
Mortgagee, as the case may be, without waiver of any other rights Lessor may
have; provided, however, that no exercise by Lessor, Owner Participant or the
Mortgagee, as the case may be, of said option shall affect the provisions of
this Lease, including the provisions that failure by Lessee to maintain the
prescribed insurance shall constitute an Event of Default.

          (d) Self-Insurance. Lessee may self-insure the risks required to be
insured against pursuant to this Section 11 under a program applicable to all
aircraft owned, leased or operated by Lessee, but in no case shall the aggregate
amount of such self-insurance in regard to Section 11(a) and Section 11(b)
exceed for any calendar year, with respect to all of the aircraft in Lessee's
fleet (including, without limitation, the Aircraft) the lesser of (A) 50% of the
highest replacement value of any single aircraft in Lessee's fleet or (B) 1-1/2%
of the average aggregate insurable value (during the preceding calendar year) of
all aircraft (including, without limitation, the Aircraft) on which Lessee
carries insurance; provided, however, that nothing contained in this Section
11(d) limiting Lessee's right to self-insure shall be deemed to apply to any
applicable minimum per aircraft (or, if applicable, per annum or other period)
hull or liability insurance deductible imposed by the aircraft hull or liability
insurers.

                                      -43-
<PAGE>

          (e) Additional Insurance by Lessor and Lessee.  Lessee (and any
Sublessee) may at its own expense carry insurance with respect to its interest
in the Aircraft in amounts in excess of that required to be maintained by this
Section 11; the Lessor or the Owner Participant may carry for its own account at
its sole cost and expense insurance with respect to its interest in the
Aircraft, provided that such insurance does not prevent Lessee (or any
Sublessee) from carrying the insurance required by this Section 11 or adversely
affect such insurance or the cost thereof.

          (f) Indemnification by United States Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 11 requiring insurance, Lessor
agrees to accept, in lieu of insurance against any risk with respect to the
Aircraft, indemnification from, or insurance provided by, the United States
Government or any agency or instrumentality thereof, the obligations of which
are supported by the full faith and credit of the United States Government,
against such risk required to be maintained in an amount which, when added to
the amount of insurance against such risk required to be maintained by Lessee
(or any Sublessee) pursuant to this Section 11 (taking into account self-
insurance permitted by Section 11(d)) shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 11 (taking into
account self-insurance permitted by Section 11(d)).

          (g) Application of Payments During Existence of an Event of Default.
Any amount referred to in this Section 11 which is payable to or retainable by
Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or any
Sublessee) if at the time of such payment or retention a Default or an Event of
Default shall have occurred and be continuing, but shall be held by or paid over
to Lessor as security for the obligations of Lessee under this Lease and, if a
Default or an Event of Default shall have occurred and be continuing, applied
against Lessee's obligations hereunder as and when due. At such time as there
shall not be continuing any such Default or such Event of Default, such amount
shall be paid to Lessee to the extent not previously applied in accordance with
the preceding sentence.

          (h) Terms of Insurance Policies. Any policies carried in accordance
with Sections 11(a) and 11(b) covering the Aircraft, and any policies taken out
in substitution or replacement for any such policies, (A) shall name the
Additional Insureds as additional insureds, and, if appropriate, loss payees, as
their respective interests may appear (but without imposing on any such party
liability to pay premiums with respect to such insurance), (B) may provide for
self-insurance to the extent permitted in Section 11(d), (C) shall provide that
if the insurers cancel such insurance for any reason whatever, or if the same is
allowed to lapse for non-payment of premium or if any material change is made in
the insurance which adversely affects the interest of any Additional Insured,
such lapse, cancellation or change shall not be effective as to any Additional
Insured for thirty days (ten days in the case of lapse for non-payment of
premium and seven days in the case of war risk and allied perils coverage) after
receipt by such Additional Insured of written notice by such insurer of such
lapse, cancellation or change, provided, however, that if any notice period
specified above is not reasonably obtainable, such policies shall provide for as
long a period of prior notice as shall then be reasonably obtainable, (D) shall
provide that in respect of the

                                      -44-
<PAGE>

respective interests of each Additional Insured in such policies the insurance
shall not be invalidated by any action or inaction of Lessee (or any Sublessee)
and shall insure the respective interests of the Additional Insureds, as they
appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Lessee (or any Sublessee), (E) shall be
primary without any right of contribution from any other insurance which is
carried by any Additional Insured, (F) shall expressly provide that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each insured, (G) shall waive
any right of the insurers to set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of any
Additional Insured, and (H) shall provide that (i) in the event of a loss
involving the Aircraft Airframe, or an Engine for which proceeds are in excess
of $[_______] (or, if the Aircraft is then under a Sublease, in excess of
$[_______]), the proceeds in respect of such loss up to the amount of Stipulated
Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust
Indenture shall not have been discharged, the Mortgagee), it being understood
and agreed that in the case of any payment to Lessor (or the Mortgagee)
otherwise than in respect of an Event of Loss, Lessor (or the Mortgagee) shall,
upon receipt of evidence reasonably satisfactory to it that the damage giving
rise to such payment shall have been repaired or that such payment shall then be
required to pay for repairs then being made, pay the amount of such payment, and
any interest or income earned thereon in accordance with Section 22 hereof, to
Lessee or its order, and (ii) the entire amount of any such loss for which
proceeds are $[_______] (or, if the Aircraft is then under a Sublease, are
$[_______]) or less or the amount of any proceeds of any such loss in excess of
Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order
unless an Event of Default shall have occurred and be continuing and the
insurers have been notified thereof by Lessor or the Mortgagee.

     SECTION 12. Inspection. At reasonable times, and upon reasonable notice,
Lessor, the Owner Participant, a Certificate Holder or the Mortgagee, or their
respective authorized representatives, may inspect the Aircraft (provided,
however, such inspections shall be limited to one inspection of the Aircraft
during any consecutive twelve-month period except during the continuance of a
Default or an Event of Default or during the final twelve-month period of the
Term, in each case when such inspection right shall not be so limited) and
inspect and make copies of the books and records of Lessee and any Sublessee
required to be maintained by the FAA or the regulatory agency or body of another
jurisdiction in which the Aircraft is then registered relating to the
maintenance of the Aircraft (at Lessor's, the Owner Participant's, a Certificate
Holder's, or the Mortgagee's risk and expense, as the case may be) and shall
keep any information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to prospective and permitted
transferees of Lessor's, the Owner Participant's, a Certificate Holder's or the
Mortgagee's interest (and such prospective and permitted transferree's counsel,
independent insurance advisors or other agents) who agree to hold such
information confidential, (B) to Lessor's, the Owner Participant's, a
Certificate Holder's or the Mortgagee's counsel, independent insurance advisors
or other agents who agree to hold such information confidential (C) as may be
required by any statute, court or administrative order or decree or governmental
ruling or regulation, (D) as may be necessary for purposes of protecting the
interest of any such Person or for enforcement of this Lease by Lessor or the
Mortgagee; provided, however, that any and all disclosures permitted by clauses
(C) and (D) above

                                      -45-
<PAGE>

shall be made only to the extent necessary to meet the specific requirements or
needs of Persons for whom such disclosures are hereby permitted. Any such
inspection of the Aircraft shall be subject to Lessee's safety and security
rules applicable at the location of the Aircraft, shall be a visual, walk-around
inspection and shall not include opening any panels, bays or the like without
the express consent of Lessee (except in connection with a "C" check or heavy
maintenance visit when a panel, bay or the like is scheduled or required to be
opened), which consent Lessee may in its sole discretion withhold; provided that
no exercise of such inspection right shall interfere with the normal operation
of the Aircraft by, or the business of, Lessee (or any Sublessee). Upon receipt
by Lessee of a written request from the Owner Participant specifying that the
Owner Participant desires to have an authorized representative observe a "C"
check or scheduled heavy maintenance visit to be performed on the Aircraft (or
substantially equivalent successor type of maintenance work) during the Term,
Lessee shall cooperate with the Owner Participant to enable the Owner
Participant's representative to observe such "C" check or scheduled heavy
maintenance visit to be performed on the Aircraft during the Term, including
reasonable advance notification to the Owner Participant of the time and place
of such "C" check or scheduled heavy maintenance visit; provided that the Owner
Participant's authorized representative shall merely observe such "C" check or
scheduled heavy maintenance visit, shall not interfere with or extend in any
manner the normal conduct or duration of such "C" check or scheduled heavy
maintenance visit, and shall not be entitled to direct any of the work performed
in connection with such "C" check or scheduled heavy maintenance visit. None of
the Lessor, the Owner Participant, the Certificate Holders or the Mortgagee
shall have any duty to make any such inspection nor shall any of them incur any
liability of obligations by reason of not making any such inspection.

     SECTION 13.  Assignment. Except as provided in the Operative Documents,
Lessee will not, without the prior written consent of Lessor, assign any of its
rights hereunder. Lessor agrees that it will not assign or convey its right,
title and interest in and to this Lease or the Aircraft except as provided in
the Operative Documents. Subject to the foregoing, the terms and provisions of
this Lease shall be binding upon and inure to the benefit of Lessor and Lessee
and their respective successors and permitted assigns.

     SECTION 14. Events of Default. Each of the following events shall
constitute an Event of Default (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) and each such Event of
Default shall continue so long as, but only as long as, it shall not have been
remedied:

          (1) Lessee shall not have made a payment of Basic Rent, Stipulated
Loss Value, Termination Value, Special Termination Value or payments with
respect to the purchase price of the Aircraft pursuant to Section 9(b) or 19(b)
within ten (10) days after the same shall have become due; or

          (2) Lessee shall have failed to make a payment of Supplemental Rent
(other than Stipulated Loss Value, Termination Value and Special Termination
Value or payments with respect

                                      -46-
<PAGE>

to the purchase price of the Aircraft pursuant to Section 9(b) or 19(b)) after
the same shall have become due and such failure shall continue for fifteen (15)
days after Lessee's receipt of written demand therefor by the party entitled
thereto (provided that any failure to pay any amount owed by Lessee under the
Tax Indemnity Agreement or any failure of Lessee to pay to Lessor or the Owner
Participant when due any Excluded Payments shall not constitute an Event of
Default unless written notice is given by the Owner Participant to Lessee and
the Mortgagee that such failure shall constitute an Event of Default); or

          (3) Lessee shall fail to carry and maintain on or with respect to the
Aircraft (or cause to be carried and maintained) the property or liability
insurance required to be maintained in accordance with the provisions of Section
11 hereof; or

          (4) Lessee shall have failed to perform or observe (or caused to be
performed and observed) any other covenant or agreement to be performed or
observed by it under any Operative Document, and such failure shall continue
unremedied for a period of thirty (30) days after written notice thereof by
Lessor or the Mortgagee; provided, however, that if Lessee shall have undertaken
to cure any such failure which arises under clause (ii) of Section 7(a)(1), or
under the first sentence of Section 7(a)(2) as it relates to maintenance,
service, repair or overhaul, or under Section 8 and, notwithstanding the
reasonable diligence of Lessee in attempting to cure such failure, such failure
is not cured within said thirty-day period but is curable with future due
diligence, there shall exist no Event of Default under this Section 14 so long
as Lessee is proceeding with due diligence to cure such failure and such failure
is in fact cured within one hundred eighty (180) days; or

          (5) any representation or warranty made by Lessee herein or in the
Participation Agreement or any document or certificate furnished by Lessee in
connection herewith or therewith or pursuant hereto or thereto (except the
representations and warranties set forth in the Tax Indemnity Agreement and such
documents or certificates as are furnished to the Owner Participant solely in
connection with matters dealt with in the Tax Indemnity Agreement and for no
other purpose) shall prove to have been incorrect in any material respect at the
time made; provided, however, such incorrectness shall constitute a default
hereunder only if such incorrectness shall continue uncured for a period of
thirty (30) days after the receipt by Lessee of a written notice from Lessor or
the Mortgagee advising Lessee of the existence of such incorrectness; or

          (6) the commencement of an involuntary case or other proceeding in
respect of Lessee in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or seeking the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Lessee or for all or substantially all of
its property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed or unstayed for a
period of 60 consecutive days or an order for relief under Chapter 11 of the
Bankruptcy Code with respect to Lessee as debtor or any other order, judgment or
decree shall be entered in any proceeding by any court of competent jurisdiction
appointing, without the consent of Lessee, a receiver, trustee or liquidator of
Lessee, or for all or substantially all of its property, or

                                      -47-
<PAGE>

sequestering of all or substantially all of the property of Lessee and any such
order, judgment or decree or appointment or sequestration shall be final or
shall remain in force undismissed, unstayed or unvacated for a period of 60
consecutive days after the date of entry thereof; or

          (7) the commencement by Lessee of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law in the
United States, or the consent by Lessee to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of Lessee or for all or substantially all of its
property, or the making by Lessee of any assignment for the benefit of creditors
or Lessee shall take any corporate action to authorize any of the foregoing;

provided, however, that, notwithstanding anything to the contrary contained in
this Section 14, any failure of lessee to perform or observe any covenant,
condition or agreement, or any error in a representation or warranty, shall not
constitute an Event of Default if such failure or error is caused solely by
reason of any event that constitutes an Event of Loss so long as Lessee is
continuing to comply with all of the terms of Section 10 hereof.

     SECTION 15. Remedies.  Upon the occurrence of any Event of Default and at
any time thereafter so long as the same shall be continuing, Lessor may, at its
option, declare by written notice to Lessee this Lease Agreement to be in
default; and at any time thereafter, so long as any such Event of Default shall
not have been remedied, Lessor may do one or more of the following with respect
to all or any part of the Airframe and any or all of the Engines as Lessor in
its sole discretion shall elect, to the extent permitted by, and subject to
compliance with mandatory requirements of, applicable law then in effect;
provided, however, that during any period the Aircraft is subject to the Civil
Reserve Air Fleet Program in accordance with the provisions of Section 7(b)
hereof and in the possession of the United States Government or an
instrumentality or agency thereof, Lessor shall not, on account of any Event of
Default, be entitled to do any of the following in such manner as to limit
Lessee's control under this Lease (or any Sublessee's control under any
Sublease) of any Airframe or any Engines, unless at least 60 days' (or such
lesser period as may then be applicable under the Military Airlift Command
program of the United States Government) prior written notice of default
hereunder shall have been given by Lessor by registered or certified mail to
Lessee (and any Sublessee) with a copy addressed to the Contracting Office
Representative for the Military Airlift Command of the United States Air Force
under any contract with Lessee (or any Sublessee) relating to the Aircraft:

          (a) upon the written demand of Lessor and at Lessee's expense, cause
     Lessee's expense, cause Lessee to return promptly, and Lessee shall return
     promptly, the Airframe or any Engine as Lessor may so demand to Lessor or
     its order in the manner and condition required by, and otherwise in
     accordance with all the provisions of, Section 5 as if such Airframe or
     Engine were being returned at the end of the Term, or Lessor, at its
     option, may enter upon the premises where all or any part of the Airframe
     or any Engine is located and take immediate possession of and

                                     -48-

<PAGE>

     remove the same by summary proceedings or otherwise, all without liability
     accruing to Lessor, other than for gross negligence or willful misconduct,
     for or by reason of such entry or taking of possession or removing whether
     for the restoration of damage to property caused by such action or
     otherwise;

          (b) sell the Aircraft at public or private sale, as Lessor may
     determine, or otherwise dispose of, hold, use, operate, lease to others or
     keep idle the Aircraft as Lessor, in its sole discretion, may determine,
     all free and clear of any rights of Lessee, except as hereinafter set forth
     in this Section 15;

          (c) Lessor may hold, use, keep idle or lease to others the Aircraft,
     Airframe or any Engine or any part thereof, as Lessor, in its sole
     discretion, may determine, free and clear of any rights of Lessee and
     without any duty to account to Lessee with respect to such action or
     inaction or for any proceeds with respect thereto, except that Lessee's
     obligation to pay Basic Rent with respect to the Aircraft on Lease Period
     Dates subsequent to the date upon which Lessee shall have been deprived of
     use of the Aircraft pursuant to this Section shall be reduced by the net
     proceeds, if any, received by Lessor from leasing the Aircraft, Airframe or
     any Engine or any part thereof to any Person other than Lessee;

          (d) whether or not Lessor shall have exercised, or shall thereafter at
     any time exercise, any of its rights under paragraph (a), (b) or (c) above
     with respect to the Aircraft, Lessor, by written notice to Lessee
     specifying a payment date which shall be the Lease Period Date not earlier
     than ten days from the date of such notice, may demand that the Lessee pay
     to Lessor, and Lessee shall pay Lessor, on the payment date so specified,
     as liquidated damages for loss of a bargain and not as a penalty (in lieu
     of the installments of Basic Rent for the Aircraft due for Lease Periods
     commencing on or after the Lease Period Date specified as the payment date
     in such notice), any unpaid Basic Rent due on Lease Period Dates on or
     prior to the payment date so specified plus whichever of the following
     amounts Lessor, in its sole discretion, shall specify in such notice
     (together with interest, if any, on such amount at the Past Due Rate from
     such specified payment date until the date of actual payment of such
     amount): (i) an amount equal to the excess, if any, of the Stipulated Loss
     Value for the Aircraft, computed as of the Lease Period Date specified as
     the payment date in such notice, over (a) any unpaid Basic Rent with
     respect to the Aircraft for the remainder of the Term or (b) the aggregate
     fair market rental value (computed as hereafter in this Section 15
     provided) of such Aircraft for the remainder of the Term, after discounting
     such Basic Rent or aggregate fair market rental value to present value as
     of the Lease Period Date specified as the payment date in such notice at an
     annual rate equal to the Debt Rate; or (ii) an amount equal to the excess,
     if any, of the Stipulated Loss Value for such Aircraft, computed as of the
     Lease Period Date specified as the payment date in such notice, over the
     fair market sales

                                      -49-
<PAGE>

     value of such Aircraft (computed as hereafter in this Section 15 provided)
     as of the Lease Period Date specified as the payment date in such notice;

          (e) in the event Lessor, pursuant to paragraph (b) above, shall have
     sold the Aircraft, Lessor, in lieu of exercising its rights under paragraph
     (d) above with respect to such Aircraft, may, if it shall so elect, demand
     that Lessee pay Lessor, and Lessee shall pay to Lessor, on the date of such
     sale, as liquidated damages for loss of a bargain and not as a penalty, any
     unpaid Basic Rent with respect to the Aircraft due prior to such date plus
     the amount of any deficiency between the net proceeds of such sale (after
     deduction of all reasonable costs of sale) and the Stipulated Loss Value of
     such Aircraft, computed as of the Stipulated Loss Value Date on or
     immediately following the date of such sale together with interest, if any,
     on the amount of such deficiency, at the Past Due Rate, from the date of
     such sale to the date of actual payment of such amount; and/or

          (f) Lessor may terminate this Lease Agreement, and/or may exercise any
     other right or remedy which may be available to it under applicable law or
     proceed by appropriate court action to enforce the terms hereof or to
     recover damages for breach hereof.

          For purposes of paragraph (d) above, the "fair market rental value" or
     the "fair market sales value" of the Aircraft shall be the rental value or
     sales value, as the case may be, which would be obtained in an arm's-length
     transaction between an informed and willing lessee or purchaser, as the
     case may be, under no compulsion to lease or purchase, as the case may be,
     and an informed and willing lessor or seller in possession, as the case may
     be, in each case based upon the actual condition and location of the
     Aircraft, which value shall be determined by mutual agreement or, in the
     absence of mutual written agreement, pursuant to an appraisal prepared and
     delivered by a nationally recognized firm of independent aircraft
     appraisers nominated by Lessor, and Lessor shall promptly notify Lessee of
     such nomination.  The cost of such appraisal or appointment shall be borne
     by Lessee.

     In addition, Lessee shall be liable, except as otherwise provided above,
without duplication of amounts payable hereunder, for any and all unpaid Rent
due hereunder before or during the exercise of any of the foregoing remedies
and, for all reasonable and actual legal fees and other costs and expenses
incurred by Lessor, the Mortgagee, the Owner Participant and the Certificate
Holders in connection with the return of the Airframe or any Engine in
accordance with the terms of Section 5 or in placing such Airframe or Engine in
the condition and airworthiness required by such Section.

     At any sale of the Aircraft or any part thereof pursuant to this Section
15, Lessor, the Mortgagee, the Owner Participant or a Certificate Holder may bid
for and purchase such property.  Lessor agrees to give Lessee at least 10 days
written notice of the date fixed for any public sale of any Airframe or Engine
or of the date on or after which will occur the execution of any contract

                                      -50-
<PAGE>

providing for any private sale; provided, however, that Lessee may not bid at
any such public sale.  Except as otherwise expressly provided above, no remedy
referred to in this Section 15 is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity; and the exercise or beginning of
exercise by Lessor of any one or more of such remedies shall not preclude the
simultaneous or later exercise by Lessor of any or all of such other remedies.
No waiver by Lessor of any Event of Default shall in any way be, or be construed
to be, a waiver of any future or subsequent Event of Default.  To the extent
permitted by applicable law, Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise which may require Lessor to sell, lease or
otherwise use the Aircraft, the Airframe or any Engine or any part thereof, in
mitigation of Lessor's damages as set forth in this Section 15 or which may
otherwise limit or modify any of Lessor's rights and remedies in this Section
15.

     SECTION 16. Lessee's Cooperation Concerning Certain Matters.   (a)
Forthwith upon the execution and delivery of each Lease Supplement and Indenture
Supplement from time to time required by the terms hereof and upon the execution
and delivery of any amendment to this Lease or to the Trust Agreement or Trust
Indenture, Lessee at its expense (except as otherwise provided in the Operative
Documents) will cause such Lease Supplement, Indenture Supplement (and, in the
case of the initial Lease Supplement and initial Indenture Supplement, this
Lease, the Trust Agreement and the Trust Indenture as well) or amendment to be
duly filed and recorded, and maintained of record, in accordance with the
applicable laws of the government of registry of the Aircraft. In addition,
Lessee at its expense will promptly and duly execute and deliver to Lessor such
further documents and take such further action as Lessor may from time to time
reasonably request in order more effectively to carry out the intent and purpose
of this Lease and to establish and protect the rights and remedies created or
intended to be created in favor of Lessor and the Mortgagee hereunder,
including, without limitation, if requested by Lessor, at the expense of Lessee,
the execution and delivery of supplements or amendments hereto, each in
recordable form, subjecting to this Lease and the Trust Indenture, any airframe
or engine substituted for the Airframe or any Engine pursuant to the terms
thereof and the recording or filing of counterparts thereof, in accordance with
the laws of such jurisdictions as Lessor may from time to time reasonably
request.

          (1) The Lessee will furnish to the Lessor, the Mortgagee, the Owner
Participant and the Certificate Holders:

          (1) Quarterly Statements  -  Within sixty days after the end of the
     first, second, and third quarterly fiscal periods in each fiscal year of
     the Lessee duplicate copies of:

                         (1) a consolidated balance sheet of the Lessee as at
                    the end of such quarter setting forth in comparative form
                    the amount for the end of the corresponding period of the
                    preceding fiscal year,

                                      -51-
<PAGE>

                         (2) consolidated statements of income and retained
                    earnings of the Lessee for such quarterly period, setting
                    forth in comparative form the amount for the corresponding
                    period of the preceding fiscal year, and

                         (3) consolidated statements of cash flow of the Lessee
                    for the portion of the fiscal year ending with said quarter,
                    setting forth in comparative form the amount for the
                    corresponding period of the preceding fiscal year;

          (2) Annual Statements - Within 120 days after the end of each fiscal
     year, duplicate copies of:

                         (1) a consolidated balance sheet of the Lessee as at
                    the end of such year, and

                         (2) consolidated statements of income and retained
                    earnings and of cash flow of the Lessee for such year,

     setting forth in each case in comparative form the figures for the previous
     fiscal year and accompanied by an auditor's report of a firm of independent
     certified public accountants of recognized national standing (which report
     may be adverse, qualified or disclaim an opinion);

          (3) SEC Reports - Promptly upon their becoming available, one copy of
     each financial statement, report, or proxy statement sent by the Guarantor
     to its shareholders generally, and of each regular or periodic report and
     any prospectus (in the form in which it becomes effective) filed by the
     Lessee or the Guarantor or any successor thereto, with the Securities and
     Exchange Commission or any successor agency; and

          (4) Notice of Default or Claimed Default  -Immediately upon an officer
     of Lessee becoming aware of the existence of a Default or an Event of
     Default (or that the Lessor has given notice or taken any other action with
     respect to an Event of Default or a claimed default under this Lease), a
     written notice specifying the nature of the Default, Event of Default, or
     claimed default any such notice given or action taken by the Lessor and
     what action the Lessee is taking or proposes to take with respect thereto.

          (2) Commencing in 1993, on or before April 30/th/ of each year during
the Term, Lessee will deliver to Lessor and the Mortgagee a certificate of
Lessee, signed by the President, a Vice President, the Chief Financial Officer
or the principal accounting officer of Lessee to the effect

                                      -52-
<PAGE>

that the signer is familiar with or has reviewed the relevant terms of this
Lease and the signer does not have knowledge of the existence, as of the date of
such certificate, of any condition or event which constitutes a Default or an
Event of Default.

     SECTION 17.  Notices.  All notices required under the terms and provisions
hereof shall be in writing (including telex, telecopier or similar writing) and
shall be effective (a) if given by telecopier when transmitted and the
appropriate confirmation received, (b) if given by certified mail, three
Business Days after being deposited in the mails, (c) if given by telex, upon
receipt by the party transmitting the telex of such party's callback code at the
end of such telex (receipt of confirmation in writing not being necessary to the
effectiveness of any telex) and (d) if given by other means, when received or
personally delivered, addressed:

          (1) if to Lessee, at P.O. Box 66100, Chicago, Illinois 60666 (or, if
     given by overnight delivery service, 1200 Algonquin Road, Elk Grove
     Township, Illinois 60007), Attention: Senior Vice President - Corporate
     Finance, telecopier number (312) 952-5204, telex number 287419 (Answerback:
     UNITEDEXO ELGR), or to such other address or telex or telecopier number as
     Lessee shall from time to time designate in writing to Lessor;

          (2) if to Lessor, at 777 Main Street, Hartford, Connecticut 06115,
     Attention: Corporate Trust Administration (M.S.N.-238), telecopier number
     (203) 240-7920, telex number 9-9339 (Answerback: CONNATBANKTTNBUS33), or to
     such other address or telex or telecopier number as Lessor shall from time
     to time designate in writing to Lessee;

          (3) if to the Mortgagee or the Participants, addressed to the
     Mortgagee or the Participants at such address or telex or telecopier number
     as the Mortgagee or the Participants shall have furnished by notice to
     Lessor and to Lessee, and, until an address is so furnished, addressed to
     the Mortgagee or the Participants at its address or telecopier number set
     forth in Schedule I to the Participation Agreement; and

          (4) if to a Certificate Holder which is not a Loan Participant,
     addressed to the Certificate Holder at its address stated in the Loan
     Certificate Register maintained pursuant to the Trust Indenture.

A copy of each notice to Lessor shall be given concurrently by the sender
thereof to the Owner Participant.

     SECTION 18.  Net Lease, No Set-Off, Counterclaim, etc.  This Lease is a net
lease, and it is intended that the Lessee shall pay all costs and expenses of
every character, whether seen or unforeseen, ordinary or extraordinary or
structural or non-structural, in connection with the use, operation,
maintenance, repair and reconstruction of the Airframe and each Engine by the
Lessee, including the costs and expenses particularly set forth in this Lease.
All Rent shall be paid by Lessee to Lessor in funds of the type specified in
Section 3(e). Except as provided in Section 3(g) hereof, Lessee's

                                      -53-
<PAGE>

obligation to pay all Rent payable hereunder shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(i) any set-off, counterclaim, abatement, recoupment, deduction, defense or
other right which Lessee may have against Lessor (in its individual capacity or
as Owner Trustee under the Trust Agreement), the Mortgagee (in its individual
capacity or as Mortgagee), the Participants, the Certificate Holders, or anyone
else for any reason whatsoever (whether in connection with the transactions
contemplated hereby or any other transactions), including, without limitation,
any default, misrepresentation or breach by Lessor, the Owner Participant or the
Mortgagee of their respective warranties, agreements or covenants contained in
any of the Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or any
damage to or loss or destruction of, or the existence of any Liens or rights of
others whatsoever with respect to the Aircraft, or any interruption or cessation
in or prohibition of the use or possession thereof by Lessee (or any Sublessee)
for any reason whatsoever, (iii) any insolvency, bankruptcy, reorganization or
similar case or proceedings by or against Lessee (or any Sublessee) or any other
Person, (iv) any damage to, or the destruction or loss of, all or any portion of
the Airframe or any Engine from whatever cause, (v) the loss or theft of any
portion of the Airframe or any Engine, (vi) the taking of the Airframe or any
Engine or any portion thereof by condemnation, confiscation, requisition or
otherwise, (vii) any interruption or cessation in, or the prohibition,
limitation or restriction of Lessee's (or any Sublessee's), use of all or any
part of the Airframe or any Engine, or the interference with such use by any
Person for any reason whatsoever, (viii) the inadequacy or incorrectness of the
description of any portion of the Airframe or any Engine, or the failure of this
Lease to demise to Lessee the Airframe or any Engine or any portion thereof,
(ix) Lessee's acquisition or ownership of all or any part of the Airframe or any
Engine otherwise than pursuant to an express provision of this Lease, (x) any
defect in compliance with specifications, condition, merchantability, design,
airworthiness, quality, durability, operation or fitness for use of the Airframe
or any Engine or any portion thereof, or (xi) any other circumstance, happening
or event whatsoever, whether or not foreseen or similar to any of the foregoing.
If for any reason whatsoever this Lease shall be terminated in whole or in part
by operation of law or otherwise except as specifically provided herein, Lessee
nonetheless agrees, without limitation of the other rights or remedies of Lessor
hereunder, subject to the right of Lessee to setoff under Section 3(g) hereof,
to pay to Lessor an amount equal to each Rent payment at the time such payment
would have become due and payable in accordance with the terms hereof, had this
Lease not been terminated in whole or in part. Lessee hereby waives, to the
extent permitted by applicable law, any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or otherwise,
to terminate, cancel, quit or surrender this Lease or the Airframe or any Engine
or any Part thereof, or to any abatement, suspension, deferment, return or
reduction of any payment of Rent except in accordance with the express terms
hereof.

     Lessee hereby acknowledges that Lessor, as Lessor under this Lease, and the
Mortgagee, as assignee of the right, title and interest of Lessor under this
Lease pursuant to the Trust Indenture, are entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to the Aircraft and that this Lease is
a "lease" within the meaning of said Section 1110.  Lessee agrees not to take
any position in connection with any bankruptcy proceedings involving it that is
inconsistent with

                                      -54-
<PAGE>

Lessor's rights under Section 1110 of the Bankruptcy Code or any comparable or
successor provision affording protection to lessors of aircraft.

     SECTION 19.  Renewal Options; Purchase Options; Valuation.   (1) Renewal
Options. (a) Fixed Renewal Terms. Not less than 360 days nor more than 510 days
before the end of the Basic Term or any Fixed Renewal Term (as hereinafter
defined), as the case may be, Lessee may, so long as no Event of Default or
Section 14(a), (b), (f) or (g) Default has occurred and is continuing, deliver
to Lessor an irrevocable written notice (which at the option of Lessee made at
any time prior to 90 days prior to the end of the Basic Term or such Fixed
Renewal Term may be deemed a notice to exercise the applicable purchase option
in Section 19(b)) electing to renew this Lease (any such renewal term, a "Fixed
Renewal Term") for an additional period of either two years or four years, with
the first such period commencing at the end of the Basic Term and the second
such period, if any, running consecutively from the end of the first such Fixed
Renewal Term, for an annual Basic Rent equal to one-half of the average annual
Basic Rent during the Basic Term; provided that the aggregate of all Fixed
Renewal Terms shall not exceed four years.

          (b) Fair Market Renewal Term.  At the expiration of the Basic Term,
any Fixed Renewal Term, or any Fair Market Renewal Term (as hereinafter
defined), as the case may be, so long as no Event of Default or Section 14(a),
(b), (f), or (g) Default shall have occurred and be continuing, Lessee shall
have the option to renew this Lease for additional periods of at least two years
(any such period to be an integral multiple of one year) (or, if such period
would not be permitted pursuant to the conditions set forth in the fourth
sentence of this Section 19(a)(2) but would be permitted if the Fair Market
Renewal Term was less than two years, additional periods of at least one year
(any such period to be an integral multiple of six months)) each for a Basic
Rent equal to the Fair Market Rental Value of the Aircraft for such period (any
such renewal term, a "Fair Market Renewal Term").  As a condition to its
exercise of the option set forth in this Section 19(a)(2), Lessee shall at least
240 days prior to the commencement of any such Fair Market Renewal Term, notify
Lessor of its demand for an appraisal procedure pursuant to the appraisal
procedures of Section 19(c).  The appraiser(s) so appointed shall determine, as
evidenced by an appraisal reasonably satisfactory to the Owner Participant, the
total useful life, the remaining useful life and the future residual value of
the Aircraft on the expiration of such Fair Market Renewal Term.  Lessee shall
not be entitled to elect to renew this Lease for any Fair Market Renewal Term
if, based upon the appraisal delivered pursuant to the preceding sentence, at
the expiration of such Fair Market Renewal Term, (i) the remaining useful life
would be less than 20% of the total useful life of the Aircraft, as determined
by the appraiser(s), or (ii) the residual value of the Aircraft, as determined
by the appraiser(s), would be less than 20% of Lessor's Cost (without taking
into account inflation or deflation during the term).  Each such option to renew
shall be exercised upon delivery by Lessee to Lessor of irrevocable written
notice of Lessee's intent to renew the Lease at least 360 days (but not more
than 510 days) prior to the commencement of such Fair Market Renewal Term (which
at the option of Lessee made at any time prior to 90 days prior to the
anticipated commencement of such Fair Market Renewal Term may be deemed a notice
to exercise the applicable purchase option in Section 19(b)).

                                      -55-
<PAGE>

              (c)  Waiver. If no written notice is delivered by Lessee to Lessor
pursuant to Section 19(a)(1) or 19(a)(2) on or before the day specified
therefor, Lessee shall be deemed to have waived any right to renew this Lease.

              (d)  Conditions Precedent, Payment of Basic Rent. At the end of
the Basic Term or any Renewal Term, if Lessee has elected to renew this Lease as
aforesaid, and provided that there shall not then have occurred and be
continuing any Event of Default or a Section 14(a), (b), (f) or (g) Default and
that all necessary governmental authorizations and approvals shall have been
received and that Basic Rent for the Renewal Term has been determined as above
provided, (i) this Lease (other than Section 9 hereof) shall continue in full
force and effect during the Renewal Term, and (ii) Basic Rent for such Renewal
Term shall be payable in semi-annual installments in advance or arrears, as was
the basis of the Basic Rent being paid immediately prior to such Renewal Term,
each such installment being due and payable on each Lease Period Date occurring
during the Renewal Term.

              (e)  Termination Value; Stipulated Loss Value. The amounts which
are payable during any Renewal Term in respect of Termination Value and
Stipulated Loss Value with respect to the Aircraft shall be determined on the
basis of the Fair Market Sales Value of the Aircraft as of the commencement of
such Renewal Term, amortized on a straight-line basis over such Renewal Term to
the projected Fair Market Sales Value of the Aircraft as of the expiration of
such Renewal Term, as such Fair Market Sales Value in each case is determined
prior to the commencement of such Renewal Term.

          (1)  Purchase Options.  Lessee shall have the option, upon not more
than 510 days and not less than 360 days irrevocable prior written notice (which
at the option of the Lessee made at any time prior to 90 days prior to the
relevant purchase date may be deemed a notice of the applicable renewal option
pursuant to Section 19(a)(1) or 19(a)(2) as the Lessee may designate) (each
relevant purchase date being a "Purchase Option Date"), to terminate this Lease
and to purchase the Aircraft:

          (1) on the last Business Day of the Basic Term for a purchase price
     equal to that percentage of Lessor's Cost indicated on Exhibit H hereto as
     the FPO Percentage;

          (2) on the last Business Day of the Basic Term for a purchase price
     equal to the Fair Market Sales Value of the Aircraft on such date; and

          (3) on the last Business Day of any Renewal Term for a purchase price
     equal to the Fair Market Sales Value of the Aircraft on such date.

Notwithstanding the foregoing but subject to the last sentence of this
paragraph, the purchase price on any Purchase Option Date shall be sufficient,
together with all other amounts payable simultaneously by Lessee, to pay in full
the payments then required to be made on account of the

                                     -56-
<PAGE>

principal amount of and interest on the Loan Certificates then outstanding. Upon
payment to Lessor in immediately available funds of the full amount of the
purchase price and payment of any other amounts then due hereunder (including
all Rent (other than Basic Rent payable in advance and due on such Purchase
Option Date) and all reasonable costs or expenses of the Owner Participant in
connection with such purchase), Lessor will transfer to Lessee, without recourse
or warranty (except as to the absence of Lessor Liens (including for this
purpose Liens that would be Lessor Liens but for the proviso to the definition
of Lessor Liens)), all of Lessor's right, title and interest in and to the
Aircraft. Subject to compliance with Section 9(s) of the Participation Agreement
and Section 2.12 of the Trust Indenture, Lessee may on any Purchase Option Date
assume all the obligations of Lessor under the Trust Indenture and the Loan
Certificates, in which event Lessee shall receive a credit against the
aforementioned purchase price in an amount equal to the unpaid Original Amount
of all Loan Certificates so assumed.

          (2)  Valuation.  For all purposes of this Section 19, including the
appraisal referred to in this Section 19(c), in determining Fair Market Rental
Value or Fair Market Sales Value, the Aircraft shall be valued (i) as if in the
condition and otherwise in compliance with the terms of Section 5 upon a return
of the Aircraft in the United States and as if it had been maintained at all
times as required in accordance with Section 7(a)(1) and Section 8, (ii) on the
basis of the value which would obtain in an arm's-length transaction between an
informed and willing buyer-user or lessee (other than a lessee or an Affiliate
of a lessee currently in possession or a used equipment scrap dealer) under no
compulsion to buy or lease and an informed and willing seller or lessor
unaffiliated with such buyer-user or lessee and under no compulsion to sell or
lease and disregarding the purchase and renewal options of the Lessee provided
in this Lease, and (iii) in the case of such valuation for determining Fair
Market Rental Value, assuming such lessee would have substantially the same
obligations during the Fair Market Renewal Term as provided hereunder including
without limitation the obligations of Lessee to carry and maintain the insurance
required by Section 11 hereof.  Upon receipt of such notice Lessor and Lessee
shall confer in good faith with a view to reaching agreement on the Fair Market
Rental Value or Fair Market Sales Value of the Aircraft.  If the parties have
not so agreed by 300 days prior to the end of the Basic Term or the Renewal Term
in question, then the question shall be determined by an appraisal mutually
agreed to by two recognized independent aircraft appraisers, one of which
appraisers shall be chosen by Lessor and one by Lessee within five Business Days
after Lessor or Lessee shall have received written notice from the other party
of a demand that such an appraisal be made, which notice shall specify the
appraiser chosen by the party giving the notice or, if such appraisers cannot
agree on the amount of such appraisal within five Business Days after the end of
such five-day period, each shall render its own appraisal and shall by mutual
consent choose another appraiser within five Business Days after the end of such
five Business Day period.  If, within such five-day period, such two appraisers
fail to appoint a third appraiser, then either Lessor or Lessee, on behalf of
both, may apply to the American Arbitration Association (or any successor
organization thereto) in Chicago, Illinois for the appointment of such third
appraiser.  The decision of the third appraiser so appointed shall be given
within five Business Days after the appointment of such third appraiser. As soon
as the third appraiser has delivered his appraisal, that appraisal shall be
compared with the appraisals given by the other two appraisers.  If the
determination of one appraiser is more disparate from the average

                                     -57-
<PAGE>

of all three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and binding
upon the parties hereto; otherwise the average of all three determinations shall
be final and binding upon the parties thereto. Lessee and Lessor shall share
equally all expenses relating to such appraisal procedure.

     SECTION 20.  Security for Lessor's Obligation to Holders of Loan
Certificates.  In order to secure the indebtedness evidenced by the Loan
Certificates, Lessor has agreed in the Trust Indenture, among other things, to
assign to the Mortgagee this Lease and to mortgage the Aircraft in favor of the
Mortgagee, subject to the reservations and conditions therein set forth. To the
extent, if any, that this Lease constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease may be created through the
transfer or possession of any counterpart other than the original counterpart,
which shall be identified as the counterpart containing the receipt therefor
executed by the Mortgagee as mortgagee under the Trust Indenture on the
signature page thereof. Lessee hereby accepts and consents to the assignment of
all Lessor's right, title and interest in and to this Lease pursuant to the
terms of the Trust Indenture. Lessee agrees to pay directly to the Mortgagee
(or, after receipt by Lessee of notice from the Mortgagee of the discharge of
the Trust Indenture, to Lessor), all amounts of Rent (other than Excluded
Payments) due or to become due hereunder and assigned to the Mortgagee and
Lessee agrees that the Mortgagee's right to such payments hereunder shall be
absolute and unconditional and, except as provided in Section 3(g), shall not be
affected by any circumstance, including, without limitation, the circumstances
set forth in clauses (i) through (iii) of Section 18 hereof. Notwithstanding the
foregoing assignment of this Lease, the obligations of Lessor to Lessee to
perform the terms and conditions of this Lease shall remain in full force and
effect. Lessee further acknowledges that the Trust Indenture provides that so
long as the Loan Certificates are outstanding the Lessor may not consent to any
amendment, modification or waiver to this Lease without the prior consent of the
Mortgagee (except as provided in Section 9.1(a) of the Trust Indenture) and the
Lessee agrees to provide to the Mortgagee a copy of all notices, consents,
certificates or other information provided hereunder to the Lessor.

     SECTION 21.  Lessor's Right to Perform for Lessee.  If Lessee fails to make
any payment of Rent required to be made by it hereunder or fails to perform or
comply with any of its agreements contained herein, then (but in each case,
except in the case of failure to pay Rent or in the case of failure to maintain
insurance as required hereunder, no earlier than five days after written notice
as to the occurrence of such failure, whether or not it shall yet constitute an
Event of Default hereunder) Lessor may itself make such payment or perform or
comply with such agreement but shall not be obligated hereunder to do so, and
the amount of such payment and the amount of the reasonable expenses of Lessor
incurred in connection with such payment or the performance of or compliance
with such agreement, as the case may be, together with interest thereon at the
Past Due Rate, shall be deemed Supplemental Rent, payable by Lessee upon demand.

     SECTION 22.  Investment of Security Funds; Liability of Lessor Limited.
(a) Investment of Security Funds. Any moneys held by Lessor as security
hereunder for future payments to Lessee

                                      -58-

<PAGE>

shall, until paid to Lessee, be invested by Lessor or, if the Trust Indenture
shall not have been discharged, by the Mortgagee, as the case may be, as Lessee
may from time to time direct in writing (and in absence of a written direction
by Lessee, there shall be no obligation to invest such moneys) in (i)
obligations of, or guaranteed by, the United States Government or agencies
thereof, (ii) open market commercial paper of any corporation incorporated under
the laws of the United States of America or any State thereof rated at least P-1
or its equivalent by Moody's Investors Service, Inc. or at least A-1 or its
equivalent by Standard & Poor's Corporation, (iii) certificates of deposit
issued by commercial banks organized under the laws of the United States or of
any political subdivision thereof having a combined capital and surplus in
excess of $750,000,000 which banks or their holding companies have a rating of A
or its equivalent by Moody's Investors Service, Inc. or Standard & Poor's
Corporation; provided, however, that the aggregate amount at any one time so
invested in certificates of deposit issued by any one bank shall not exceed 5%
of such bank's capital and surplus, and (iv) U.S. dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (iii) or any subsidiary thereof and (iv) overnight
repurchase agreements with any financial institution having combined capital and
surplus of at least $750,000,000 and a rating of AA or its equivalent by Moody's
Investors Service, Inc. or Standard & Poor's Corporation with any of the
obligations described in clause (i) through (iv) as collateral. There shall be
promptly remitted to Lessee or its order (but no more frequently than monthly)
any gain (including interest received) realized as a result of any such
investment (net of any fees, commissions and other expenses, if any, incurred in
connection with such investment) unless a Default or an Event of Default shall
have occurred and be continuing. Lessee shall be responsible for any net loss
realized as a result of any such investment and shall reimburse Lessor (or the
Mortgagee, as the case may be) therefor on demand.

          (b) Liability of Lessor Limited.  It is expressly agreed and
understood that all representations, warranties and undertakings of Lessor
hereunder shall be binding upon Lessor only in its capacity as trustee under the
Trust Agreement, and the institution acting as Lessor shall not be liable in its
individual capacity for any breach thereof except for its gross negligence or
willful misconduct or for breach of its covenants, representations and
warranties contained herein, to the extent covenanted or made in its individual
capacity.

     SECTION 23.  Miscellaneous.  Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. No term or provision of
this Lease may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by Lessor, Lessee and any assignee of Lessor's
rights hereunder. This Lease shall constitute an agreement of lease, and nothing
contained herein shall be construed as conveying to Lessee any right, title or
interest in the Aircraft except as a lessee only. Neither Lessee nor any
Affiliate of Lessee will file any tax returns in a manner inconsistent with the
foregoing fact or with Lessor's ownership of the Aircraft. The section and
paragraph headings in this Lease and the table of contents are for convenience
of reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof and all references
                                      -59-
<PAGE>

herein to numbered sections, unless otherwise indicated, are to sections of this
Lease. This Lease shall in all respects be governed by and construed in
accordance with, the internal laws of the State of New York including all
matters of construction, validity and performance. This Lease may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     SECTION 24.  Successor Trustee.  Lessee agrees that in the case of the
appointment of any successor Owner Trustee pursuant to the terms of the Trust
Agreement, such successor Owner Trustee shall, upon written notice by such
successor Owner Trustee, succeed to all the rights, powers and title of Lessor
hereunder and shall be deemed to be Lessor and the owner of the Aircraft for all
purposes hereof without in any way altering the terms of this Lease or Lessee's
obligations hereunder. One such appointment and designation of a successor Owner
Trustee shall not exhaust the right to appoint and designate further successor
Owner Trustees pursuant to the Trust Agreement, but such right may be executed
repeatedly as long as this Lease shall be in effect.

                              *        *        *

                                      -60-
<PAGE>

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

                                       THE CONNECTICUT NATIONAL BANK, not in its
                                       individual capacity, except expressly
                                       provided in Section 22(b) hereof, but
                                       solely as Owner Trustee,

                                            Lessor

                                       By:
                                            _______________________________

                                       UNITED AIR LINES, INC.,

                                            Lessee

                                       By:
                                           _______________________________

                                     -61-
<PAGE>

                                                                       EXHIBIT A
                                                                              to
                                                                 Lease Agreement

                    LEASE SUPPLEMENT NO. 1 (1992 757 [__])
                    --------------------------------------

     LEASE SUPPLEMENT No. 1 (1992 757 [__]), dated December [__], 1992 between
THE CONNECTICUT NATIONAL BANK, not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement (1992 757 [__]), dated as of December
[__], 1992, between General Foods Credit Corporation, as Owner Participant, and
such Owner Trustee (such Owner Trustee, in its capacity as such Owner Trustee
being herein called "Lessor"), and UNITED AIR LINES, INC. ("Lessee").

     Lessor and Lessee have heretofore entered into that certain Lease Agreement
(1992 757 [__]), dated as of December 1, 1992, relating to one Boeing Model 757-
222 aircraft (herein called the "Lease" and the defined terms therein being
hereinafter used with the same meanings). The Lease provides for the execution
and delivery from time to time of Lease Supplement for the purpose of leasing
the Airframe and Engines under the Lease as and when delivered by Lessor to
Lessee in accordance with the terms thereof.

     /1/[The Lease relates to the Airframe and Engines described below, and a
counterpart of the Lease is attached hereto, and made a part hereof, and this
Lease Supplement together with such attachment, is being filed for recordation
on the date hereof with the Federal Aviation Administration as one document.]

     /2/[The Lease relates to the Airframe and Engines described below, and a
counterpart of the Lease, attached and made a part of Lease Supplement No. 1
dated December [__], 1992, to the Lease Agreement, has been recorded by the
Federal Aviation Administration on _______________, as one document and assigned
Conveyance No. __________________.]

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

          1.   Lessor hereby delivers and leases to Lessee under the Lease and
     Lessee hereby accepts and leases from Lessor under the Lease the following
     described Boeing

------------------------
     1  This language for Lease Supplement No. 1.
     2  This language for other lease Supplements.

                                     -62-
<PAGE>

     Model 757-222 Aircraft as of the date hereof, which Aircraft consists of
     the following companies:

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

               (ii) Engines: two (2) Pratt & Whitney Model PW2037 engines
          bearing, respectively, manufacturer's serial nos. _____ and _____
          (each of which engines has 750 or more rated takeoff horsepower or the
          equivalent of such horsepower).

          2.   The Closing Date of the Aircraft is the date of this Lease
     Supplement set forth in the opening paragraph hereof. Except as otherwise
     provided in the Lease, the Term for the Aircraft shall commence on the
     Closing Date and end on December 1, 2014.

          3.   The Stipulated Loss Value Date shall mean the 1st calendar day of
     each calendar month during the Interim Term, the Basic Term and any Renewal
     Term.

          4.   Lessee hereby confirms its agreement to pay Lessor Basic Rent for
     the Aircraft throughout the Term therefor in accordance with Section 3 of
     the Lease.

          5.   Lessee hereby confirms to Lessor that Lessee has accepted the
     Aircraft for all purposes hereof and of the Lease as being airworthy, in
     good working order and repair and with defect or inherent vice in title,
     condition, design, operation or fitness for use; provided, however, that
     nothing contained herein or in the Lease shall in any way diminish or
     otherwise affect any right Lessee or Lessor may have with respect to the
     Aircraft against The Boeing Company, or any subcontractor or supplier of
     The Boeing Company under the Purchase Agreement or otherwise.

          6.   The Commencement Date is July 1, 1993.

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

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

                     *                *                 *

                                      -63-
<PAGE>

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

                                       THE CONNECTICUT NATIONAL BANK, not in its
                                       individual capacity, but solely as Owner
                                       Trustee,

                                       Lessor

                                       By:_________________________________
                                       Title:

                                       UNITED AIR LINES, INC.,

                                       Lessee

                                       By:_________________________________
                                       Title:

     /3/[Receipt of this original counterpart of the foregoing Lease Supplement
is hereby acknowledged on this ___ day of December, 1992.

                                       STATE STREET BANK AND TRUST COMPANY OF
                                       CONNECTICUT, NATIONAL ASSOCIATION, as
                                       Mortgagee

                                       By:_________________________________
                                            (Authorized Officer)

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

  /3/  This language contained in the original counterpart only.

                                     A-64
<PAGE>

                                               Closing Date: December [__], 1992
                                                                        N[_____]

                                   Exhibit B

                              Schedule of Rentals

                       (As a percentage of Lessor's Cost)

Payment Date        Advance Rent        Arrears Rent        Excess Amount

<PAGE>

                                               Closing Date: December [__], 1992
                                                                        N[_____]

                                   Exhibit C

                         Stipulated Loss Value Schedule

                       (As a percentage of Lessor's Cost)

          Payment Date           Stipulated Loss Value

<PAGE>

                                               Closing Date: December [__], 1992
                                                                        N[_____]

                                   Exhibit D

                           Termination Value Schedule

                       (As a percentage of Lessor's Cost)

          Payment Date           Termination Value

<PAGE>

                                                                       EXHIBIT E
                                                                              to
                                                                 Lease Agreement

                             RENT RECALCULATION AND
                          INDEMNIFICATION VERIFICATION
                          ----------------------------

     Any recalculation of Basic Rent, Excess Amount, Stipulated Loss Value
percentages, Termination Value percentages and Special Termination Value
percentages pursuant to the Lease and any calculation of any payment to the
Owner Participant or Lessee under the Tax Indemnity Agreement or Section 7(b) of
the Participation Agreement shall be determined by the Owner Participant,
computed on the basis of the same methodology and assumptions used by the Owner
Participant in determining the Basic Rent, Excess Amount, Stipulated Loss Value
percentages, Termination Value percentages and Special Termination Value
percentages as of the Closing Date except as such assumptions have been modified
pursuant to Section 3 of the Lease, or the Tax Indemnity Agreement, and shall be
effective upon such determination; provided, however, Lessee may request (A)
Capstar Partners, Inc. or any other financial advisor to Lessee to verify such
calculations but without any requirement that the Owner Participant disclose to
such advisor such methodology and assumptions or its tax returns and (B) if
Lessee believes that such calculations by the Owner Participant are in error
then a nationally recognized firm of accountants selected by the Owner
Participant and reasonably acceptable to Lessee (which may be the Owner
Participant's independent public accountants) shall be permitted to verify such
calculations and the Owner Participant will make available to such firm (subject
to the execution by such firm of a confidentiality agreement reasonably
acceptable to the Owner Participant), but in no event to the Lessee, such
methodology and assumptions and any changes made therein pursuant to Section 3
of the Lease and any other information reasonably necessary for such
verification requested by such firm; provided, however, that, with respect to
verification of indemnities not based upon actual Taxes, in no event shall Owner
Participant be obligated to disclose its tax returns to such firm. In the event
of a verification under clause (B) of this Exhibit E the determination by such
firm of accountants shall be final. Lessee will pay the reasonable costs and
expenses of the verification under clause (B) of this Exhibit E; provided,
however, if as a result of such verification process the Basic Rent is adjusted
and such adjustment causes the Net Present Value of Rents to decline by 10 or
more basis points or there is a material error in the computation of the Excess
Amount, Stipulated Loss Values, Termination Values, Special Termination Values
or indemnity payment in the Owner Participant's original statement in the Owner
Participant's favor, the Owner Participant shall pay the reasonable costs and
expenses of such verification process.  Such recalculated Basic Rent, Excess
Amount, Stipulated Loss Value percentages, Termination Value percentages and
Special Termination Value percentages shall be set forth in an amendment to the
Lease.  The parties hereby agree that the sole responsibility of Capstar
Partners, Inc. or such other financial advisor or accounting firm shall be to
verify the computation of any amounts hereunder and that matters of
interpretation of the Operative Documents shall not be within the scope of such
Person's responsibilities.
<PAGE>

                                                                       EXHIBIT F
                                                                              to
                                                                 Lease Agreement

                      SCHEDULE OF COUNTRIES AUTHORIZED
                    FOR DOMICILE OF PERMITTED SUBLESSEES
                    ------------------------------------

               Australia             Malaysia
               Austria               Mexico
               Belgium               Netherlands
               Brazil                New Zealand
               Canada                Norway
               Denmark               Portugal
               Finland               Republic of China (Taiwan)
               France                Singapore
               Germany               South Korea
               Greece                Spain
               Iceland               Sweden
               Indonesia             Switzerland
               Ireland               Thailand
               Italy                 United Kingdom
               Japan                 Venezuela
               Luxembourg
<PAGE>

                                                                       EXHIBIT G
                                                                              to
                                                                 Lease Agreement

                        SCHEDULE OF COUNTRIES AUTHORIZED
                           FOR AIRCRAFT REGISTRATION
                           -------------------------

                      Australia              Italy
                      Austria                Japan
                      Belgium                Netherlands
                      Canada                 New Zealand
                      Denmark                Spain
                      France                 Sweden
                      Germany                Switzerland
                      Greece                 United Kingdom
<PAGE>

                                   EXHIBIT H

LESSOR'S COST, SPECIAL TERMINATION VALUES AND FPO PERCENTAGE

Lessor's cost:                 $46,000,000
Special Termination Values:    July 1, 2005:    /*/
                               July 1, 2009:    /*/
FPO Percentage:                50.0%

----------------------
     /*/    Each Special Termination Value shall be an amount determined by the
            Owner Participant in its sole discretion without any obligation to
            act in good faith.<PAGE>

                                                                    Exhibit 4.21

                         TRUST INDENTURE AND MORTGAGE

                                (1992 757 [__])

                        Dated as of December [__], 1992

                                    Between

                        THE CONNECTICUT NATIONAL BANK,
                        not in its individual capacity
                      except as expressly stated herein,
                          but solely as Owner Trustee

                                 Owner Trustee

                                      and

              STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                             NATIONAL ASSOCIATION,

                                   Mortgagee

                          LOAN CERTIFICATES COVERING
                      ONE BOEING MODEL 757-222 AIRCRAFT,
                M.S.N. [_____], U.S. REGISTRATION NO. N[_____]

                       LEASED BY UNITED AIR LINES, INC.

<PAGE>

                     TABLE OF CONTENTS TO TRUST INDENTURE

                                                                            Page
                                                                            ----

TRUST INDENTURE AND MORTGAGE (1992 757 [__]).................................  1

GRANTING CLAUSE..............................................................  1

ARTICLE I  DEFINITIONS.......................................................  7
  SECTION  1.1   Special Definitions.........................................  7
  SECTION  1.2   Reference to Other Documents................................ 11
  SECTION  2.1   Form of Loan Certificates................................... 12
  SECTION  2.2   Issuance and Terms of Loan Certificates..................... 25
  SECTION  2.3   Payments from Indenture Estate Only......................... 26
  SECTION  2.4   Method of Payment........................................... 28
  SECTION  2.5   Application of Payments..................................... 30
  SECTION  2.6   Termination of Interest in Trust Indenture Estate........... 30
  SECTION  2.7   Registration, Transfer and Exchange of Loan Certificates.... 30
  SECTION  2.8   Mutilated, Destroyed, Lost or Stolen Loan Certificates...... 32
  SECTION  2.9   Payment of Expenses on Transfer............................. 32
  SECTION  2.10  Optional and Mandatory Prepayment........................... 32
  SECTION  2.11  Optimization................................................ 33
  SECTION  2.12  Assumption of Loan Certificates by Lessee................... 34
  SECTION  2.13  Funding Costs; Increased Cost; Illegality Events............ 34
  SECTION  2.14  Option to Purchase Loan Certificates........................ 35

ARTICLE III  RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
             TRUST INDENTURE ESTATE.......................................... 36
  SECTION  3.1   Basic Rent Distribution..................................... 36
  SECTION  3.2   Event of Loss and Replacement; Termination.................. 37
  SECTION  3.3   Payment After Indenture Event of Default, etc............... 38
  SECTION  3.4   Certain Payments............................................ 39
  SECTION  3.5   Other Payments.............................................. 40
  SECTION  3.6   Payments to Owner Trustee................................... 40
  SECTION  3.7   Investment of Amounts Held by Mortgagee..................... 40

ARTICLE IV  COVENANTS OF THE BANK AND THE OWNER TRUSTEE; EVENTS OF
            DEFAULT; REMEDIES OF MORTGAGEE................................... 41

                                       i
<PAGE>

  SECTION  4.1   Covenants of the Bank and the Owner Trustee................. 41
  SECTION  4.2   Indenture Event of Default.................................. 43
  SECTION  4.3   Certain Rights.............................................. 45
  SECTION  4.4   Remedies.................................................... 47
  SECTION  4.5   Return of Aircraft.......................................... 49
  SECTION  4.6   Remedies Cumulative......................................... 50
  SECTION  4.7   Discontinuance of Proceedings............................... 51
  SECTION  4.8   Waiver of Past Defaults..................................... 51

ARTICLE V  DUTIES OF THE MORTGAGEE........................................... 51
  SECTION  5.1   Notice of Indenture Event of Default........................ 51
  SECTION  5.2   Action Upon Instructions; Certain Rights of Owner Trustee... 53
  SECTION  5.3   Indemnification............................................. 55
  SECTION  5.4   No Duties Except as Specified in Indenture or Instructions.. 56
  SECTION  5.5   No Action Except Under Lease, Indenture or Instructions..... 56
  SECTION  5.6   Replacement Airframes and Replacement Engines............... 56
  SECTION  5.7   Indenture Supplements for Replacements...................... 62
  SECTION  5.8   Effect of Replacement....................................... 62

ARTICLE VI  THE OWNER TRUSTEE AND THE MORTGAGEE.............................. 63
  SECTION  6.1   Acceptance of Trusts and Duties............................. 63
  SECTION  6.2   Absence of Duties........................................... 63
  SECTION  6.3   No Representations or Warranties as to Aircraft or
                 Documents................................................... 64
  SECTION  6.4   No Segregation of Monies; No Interest....................... 64
  SECTION  6.5   Reliance; Agents; Advice of Counsel......................... 65
  SECTION  6.6   Capacity in Which Acting.................................... 66
  SECTION  6.7   Compensation................................................ 66

ARTICLE VII  INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE................... 66
  SECTION  7.1   Scope of Indemnification.................................... 66

ARTICLE VIII  SUCCESSOR TRUSTEE.............................................. 67
  SECTION  8.1   Notice of Successor Owner Trustee........................... 67
  SECTION  8.2   Resignation of Mortgage; Appointment of
                 Successor................................................... 67

ARTICLE IX  SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND
            OTHER DOCUMENTS.................................................. 69
  SECTION  9.1   Instructions of Certificate Holders; Limitations............ 69
  SECTION  9.2   Trustees Protected.......................................... 71
  SECTION  9.3   Documents Mailed to Certificate Holders..................... 71

                                       ii
<PAGE>

ARTICLE X  MISCELLANEOUS..................................................... 72
  SECTION  10.1   Termination of Trust Indenture............................. 72
  SECTION  10.2   No Legal Title to Trust Indenture Estate in
                  Certificate Holders........................................ 72
  SECTION  10.3   Sale of Aircraft by Mortgagee is Binding................... 73
  SECTION  10.4   Trust Indenture for Benefit of Owner Trustee, Mortgagee,
                  Owner Participant and Holders of Loan Certificates......... 73
  SECTION  10.5   No Action Contrary to Lessee's Rights Under the Lease...... 73
  SECTION  10.6   Notices.................................................... 73
  SECTION  10.7   Severability............................................... 74
  SECTION  10.8   No Oral Modification or Continuing Waivers................. 74
  SECTION  10.9   Successors and Assigns..................................... 75
  SECTION  10.10  Headings................................................... 75
  SECTION  10.11  Normal Commercial Relations................................ 75
  SECTION  10.12  Governing Law; Counterpart Form............................ 76

  EXHIBIT A       Form of Indenture Supplement

                                      iii
<PAGE>

                 TRUST INDENTURE AND MORTGAGE (1992 757 [__])

     THIS TRUST INDENTURE AND MORTGAGE (1992 757 [__]) dated as of December
[__], 1992, between THE CONNECTICUT NATIONAL BANK, a national banking
association, not in its individual capacity, except as expressly stated herein
(in which case it is referred to herein as the "Bank"), but solely as Owner
Trustee under the Trust Agreement referred to below (the "Owner Trustee"), and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as the Mortgagee hereunder (the "Mortgagee").

     WHEREAS, the Owner Trustee desires by this Trust Indenture, among other
things, (i) to provide for the issue by the Owner Trustee to the Loan
Participants of Loan Certificates evidencing the participation of the Loan
Participants in the payment of Lessor's Cost, as provided in the Participation
Agreement, and (ii) to provide for the assignment, mortgage and pledge by the
Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate hereunder,
among other things, of all of the Owner Trustee's right, title and interest in
and to the Aircraft, and, except as hereinafter expressly provided as to
Excluded Payments, all of the Owner Trustee's right, title and interest in, to
and under the Lease and all payments and other amounts received hereunder or
thereunder in accordance with the terms hereof or thereof, as security for the
Owner Trustee's obligations to the holders of the Loan Certificates and for the
benefit and security of such holders;

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

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

                                GRANTING CLAUSE

     NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the principal amount of, and interest on, and all
other amounts due with respect to, all Loan Certificates from time to time
outstanding hereunder (including, without limitation, amounts payable as Funding
Costs and Increased Cost) and the performance and observance by the Owner
Trustee of all the agreements, covenants and provisions herein and in the Loan
Certificates contained, for the benefit of the holders of the Loan Certificates
and the Loan Participants and for the uses and

<PAGE>

purposes and subject to the terms and provisions hereof, and in consideration of
the premises and of the covenants herein contained, and of the acceptance of the
Loan Certificates by the holders thereof, and for other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner Trustee has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Mortgagee, its
successors and assigns, for the security and benefit of the Loan Participants
and the holders from time to time of the Loan Certificates, a first priority
security interest in and mortgage lien on all right, title and interest of the
Owner Trustee in, to and under the following described property, rights and
privileges, other than Excluded Payments (which collectively, excluding Excluded
Payments but including all property hereafter specifically subjected to the lien
of this Trust Indenture by any mortgage supplemental hereto, are included within
the Trust Indenture Estate), to wit:

          1.   The Aircraft (including the Airframe, the Engines and Parts and
     all replacements thereof and substitutions therefor to which the Owner
     Trustee shall from time to time acquire title as provided in the Lease),
     all as may be more particularly described in the Indenture Supplement
     executed and delivered with respect to the Aircraft or any such replacement
     or substitutions therefor, as provided in this Trust Indenture;

          2.   The Lease and any Lease Supplement and all Rent thereunder,
     including, without limitation, all amounts of Basic Rent, Supplemental
     Rent, and payments of any kind thereunder, and all amendments or
     supplements to the Lease;

          3.   The Purchase Agreement (to the extent specified in the Owner
     Trustee's Purchase Agreement), the Consent and Agreement, and the Owner
     Trustee's Bill of Sale;

          4.   All rents, issues, profits, revenues and other income of the
     property subjected or required to be subjected to the lien of this Trust
     Indenture;

          5.   All insurance and requisition proceeds with respect to the
     Aircraft, including but not limited to the insurance required under Section
     11 of the Lease;

                                       2
<PAGE>

          6.   All rights of the Owner Trustee to amounts paid or payable by
     Lessee to the Owner Trustee under the Participation Agreement and all
     rights of the Owner Trustee to enforce payments of any such amounts
     thereunder;

          7.   All monies and securities from time to time deposited or required
     to be deposited with the Mortgagee pursuant to any terms of this Trust
     Indenture or the Lease or required hereby or by the Lease to be held by the
     Mortgagee hereunder as security for the obligations of the Lessee under the
     Lease and of the Owner Trustee hereunder; and

          8.   All proceeds of the foregoing.

     Concurrently with the delivery hereof, the Owner Trustee is delivering to
the Mortgagee the original executed counterpart of the Lease and Lease
Supplement (to which a chattel paper receipt is attached), and executed copies
of the Owner Trustee's Purchase Agreement and the Consent and Agreement.

                                HABENDUM CLAUSE

     TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the benefit and security
of the Loan Participants and the holders from time to time of the Loan
Certificates, without any priority of any one Loan Certificate over any other,
and for the uses and purposes and subject to the terms and provisions set forth
in this Trust Indenture.

     It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner Trustee shall remain liable under the Lease, the
Purchase Agreement, the Owner Trustee's Purchase Agreement and the Consent and
Agreement to perform all of the obligations assumed by it thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the
Mortgagee, the Loan Participants and the Certificate Holders shall have no
obligation or liability under the Lease by reason of or arising out of the
assignment hereunder, nor shall the Mortgagee, the Loan Participants or the
Certificate Holders be required or obligated in any manner to perform or fulfill
any obligations of the Owner Trustee under or pursuant to the Lease, the
Purchase Agreement, the Owner Trustee's Purchase Agreement, the Consent and
Agreement or, except as herein expressly provided, to make any payment, or to
make any inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim, or take

                                       3
<PAGE>

any action to collect or enforce the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

     The Owner Trustee does hereby constitute the Mortgagee the true and lawful
attorney of the Owner Trustee, irrevocably, with full power (in the name of the
Owner Trustee or otherwise) to ask for, require, demand, and receive, any and
all monies and claims for monies (in each case including insurance and
requisition proceeds but in all cases excluding Excluded Payments) due and to
become due under or arising out of the Lease, the Participation Agreement, the
Purchase Agreement, the Owner Trustee's Purchase Agreement, the Consent and
Agreement and all other property which now or hereafter constitutes part of the
Trust Indenture Estate, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or to
institute any proceedings which the Mortgagee may deem to be necessary or
advisable in the premises. Under the Lease, the Lessee is directed, so long as
this Trust Indenture shall not have been fully discharged, to make all payments
of Rent (other than Excluded Payments) and all other amounts which are required
to be paid to or deposited with the Owner Trustee pursuant to the Lease (other
than Excluded Payments) directly to, or as directed by, the Mortgagee at such
address or addresses as the Mortgagee shall specify, for application as provided
in this Trust Indenture. The Owner Trustee agrees that promptly on receipt
thereof, it will transfer to the Mortgagee any and all monies from time to time
received by it constituting part of the Trust Indenture Estate, for distribution
by the Mortgagee pursuant to this Trust Indenture, except that the Owner Trustee
shall accept for distribution pursuant to the Trust Agreement any amounts
distributed to it by the Mortgagee under this Trust Indenture.

     The Owner Trustee agrees that at any time and from time to time, upon the
written request of the Mortgagee, the Owner Trustee will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents as the Mortgagee may reasonably deem desirable
in obtaining the full benefits of the assignment hereunder and of the rights and
powers herein granted.

     The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as the assignment hereunder shall remain in effect, any of its right, title
or interest hereby assigned to anyone other than the Mortgagee, and that it will
not, except as

                                       4
<PAGE>

provided in this Trust Indenture and except with respect to Excluded Payments,
accept any payment from Lessee, enter into any agreement amending or
supplementing the Lease, the Participation Agreement, the Purchase Agreement,
the Owner Trustee's Purchase Agreement or the Consent and Agreement, execute any
waiver or modification of, or consent under, the terms of, or exercise any
rights, powers or privileges under, the Lease, the Participation Agreement, the
Purchase Agreement, the Owner Trustee's Purchase Agreement or the Consent and
Agreement, settle or compromise any claim arising under the Lease, the
Participation Agreement, the Purchase Agreement, the Owner Trustee's Purchase
Agreement or the Consent and Agreement, or submit or consent to the submission
of any dispute, difference or other matter arising under or in respect of the
Lease, the Participation Agreement, the Purchase Agreement, the Owner Trustee's
Purchase Agreement or the Consent and Agreement to arbitration thereunder.

     The Owner Trustee does hereby ratify and confirm the Lease and does hereby
agree that it will not violate any covenant or agreement made by it herein or
therein or in any Operative Document to which the Owner Trustee is a party which
results in an alteration or impairment of any such agreement or of any of the
rights created by any such document or the assignment hereunder.

     Notwithstanding the Granting Clause or any of the preceding paragraphs,
there is hereby excluded from the foregoing sale, transfer, assignment, grant,
pledge and security interest all Excluded Payments.

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

                                       5
<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

     SECTION 1.1  Special Definitions.

     For all purposes of this Trust Indenture the following terms shall have the
following meanings (such definitions to be equally applicable to both the
singular and plural forms of the terms defined). Any agreement referred to below
shall mean such agreement as amended, supplemented and modified from time to
time in accordance with the applicable provisions thereof and of other Operative
Documents.

     "Actual Knowledge" shall mean, (i) as it applies to the Owner Trustee or
Mortgagee, as the case may be, actual knowledge of a responsible officer in the
Corporate Trust Department or the Corporate Trust Office, as the case may be,
and (ii) as it applies to the Owner Participant, actual knowledge of a vice
president or more senior officer of the Owner Participant or other officer of
the Owner Participant in each case having responsibility for the transactions
contemplated by the Operative Documents; provided that each of the Owner
Trustee, the Mortgagee and the Owner Participant shall be deemed to have "Actual
Knowledge" of any matter as to which it has been given notice by any of Lessee,
the Owner Participant, any Certificate Holder, the Owner Trustee or the
Mortgagee, such notice having been given pursuant to Section 14 of the
Participation Agreement.

     "Amortization Schedule" shall mean the amortization schedule for the Loan
Certificates delivered pursuant to Section 2.2 hereof or, if a revised
amortization schedule shall be established pursuant to Sections 18 or 19 of the
Participation Agreement, the amortization schedule so established.

     "Bankruptcy Code" or "United States Bankruptcy Code" means the Bankruptcy
Reform Act of 1978, as amended (i) from time to time, for the purposes of
Section 4.2, or (ii) through the Closing Date, for all other purposes.

     "Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in Chicago, Illinois;
New York City, New York; London, England; the city and state in which the
principal place of business of the Owner Trustee is located; and, so long as any
Loan Certificate is outstanding, the city and state in which the

                                       6
<PAGE>

principal place of business of the Mortgagee is located and the city and state
in which the Mortgagee receives and disburses funds.

     "Certificate Holder" or "Holder" shall mean, at any time, each holder of
one or more Loan Certificates at such time.

     "Certificates" or "Loan Certificates" shall mean and include the Loan
Certificates Due July 1, 2011, each to be substantially in the form therefor set
forth in Section 2.1 hereof, issued by the Owner Trustee to the Certificate
Holders, bearing interest at the rates and payable as provided therein, and any
Certificate issued in exchange therefor or replacement thereof pursuant to
Sections 2.7 or 2.8 hereof.

     "Commitment" shall mean the commitment of each of the Loan Participants or
of the Owner Participant, as the case may be, to finance the Owner Trustee's
payment of Lessor's Cost for the Aircraft.

     "Corporate Trust Department" or "Trust Office" shall mean the principal
corporate trust office of the Owner Trustee located at 777 Main Street,
Hartford, Connecticut 06115, Attention: Corporate Trust Administration (M.S.N.-
238), or at such other office at which the Owner Trustee's corporate trust
business shall be administered which the Owner Trustee shall have specified by
notice in writing to Lessee, the Mortgagee and each holder of a Loan
Certificate.

     "Corporate Trust Office" shall mean the principal office of the Mortgagee
located at 750 Main Street, Suite 1114, Hartford, Connecticut 06103, Attention:
Corporate Trust Department, or such other office at which the Mortgagee's
corporate trust business shall be administered which the Mortgagee shall have
specified by notice in writing to Lessee, the Owner Trustee and each holder of a
Loan Certificate.

     "Dollars" and "$" mean the lawful currency of the United States of America.

     "Event of Default" shall mean any Indenture Event of Default.

     "Excluded Payments" shall have the meaning set forth in the Lease.

     "Funding Costs" means all reasonable out-of-pocket costs, expenses and
losses which are incurred by a Holder, upon the payment or prepayment of any
principal portion of any Loan

                                       7
<PAGE>

Certificate by such Holder on a date other than an Interest Payment Date, as a
result of (i) the breaking of any deposit obtained to fund such Loan Certificate
prior to the maturity thereof, or (ii) the re-employment of such principal
amount during the remaining term of the then applicable Interest Period at a
rate lower than the Eurodollar Rate.

     "Funding Profits" means all cash profits which are realized by a Holder
upon the payment or prepayment of any principal portion of any Loan Certificate
on a date other than an Interest Payment Date, as the result of (i) the breaking
of any deposit obtained to fund such Loan Certificate prior to the maturity
thereof or (ii) the re- employment of such principal amount during the remaining
term of the then applicable Interest Period at a rate higher than the Eurodollar
Rate.

     "Illegality Event" shall have the meaning set forth in the Lease.

     "Increased Cost" shall have the meaning set forth in the Lease.

     "Indenture", "this Indenture", and the "the Trust Indenture" means this
Trust Indenture and Mortgage.

     "Indenture Default" means any Indenture Event of Default or any event or
condition which, with notice or lapse of time or both, would constitute an
Indenture Event of Default.

     "Indenture Estate" or "Trust Indenture Estate" means all estate, right,
title and interest of the Mortgagee in and to any of and all the properties,
rights and interests referred to in the Granting Clause of this Indenture,
excluding, however, Excluded Payments.

     "Indenture Event of Default" has the meaning specified in Section 4.2.

     "Indenture Supplement" means a supplement to this Indenture, substantially
in the form of Exhibit A, which shall particularly describe the Aircraft, or any
Replacement Airframe or Replacement Engine, included in the property of the
Owner Trustee covered by this Indenture.

     "Lease" shall mean that certain Lease Agreement (1992 757 [__]) dated as of
the date hereof, entered into by the Owner

                                       8
<PAGE>

Trustee and Lessee concurrently with the execution and delivery of this Trust
Indenture, as said Lease Agreement may from time to time be supplemented or
amended, or the terms thereof waived or modified to the extent permitted by, and
in accordance with, the terms of this Trust Indenture. The term "Lease" shall
also include each Lease Supplement from time to time entered into pursuant to
the terms of the Lease.

     "Lease Event of Default" shall mean an "Event of Default" as defined in the
Lease.

     "Lessee" shall mean United Air Lines, Inc., a Delaware Corporation.

     "Lessor" shall mean the Owner Trustee not in its individual capacity as
lessor under the Lease.

     "Loan Certificate Register" has the meaning specified in Section 2.7.

     "Loan Certificate Registrar" has the meaning specified in Section 2.7.

     "Majority in Interest of Certificate Holders" or "Requisite Holders" as of
a particular date of determination shall mean the holders of more than 66-2/3%
of the aggregate unpaid original principal amount of all Loan Certificates
outstanding as of such date (excluding any Loan Certificates held by the Owner
Trustee or the Owner Participant or any interests of the Owner Participant
therein by reason of subrogation pursuant to Section 4.3 hereof (unless all Loan
Certificates then outstanding and not held by Lessee or any Affiliate thereof
shall be held by the Owner Trustee or the Owner Participant) or Lessee or any
affiliate of any thereof).

     "Manufacturer" means The Boeing Company, a Delaware corporation.

     "Overdue Rate" shall have the meaning set forth in the Loan Certificates.

     "Owner Trust Advance" means with respect to any Loan Participant, at any
time, the amount advanced to the Owner Trustee by such Loan Participant pursuant
to the Participation Agreement, or, where the context may require, the then
outstanding principal amount of such Owner Trust Advance.

                                       9
<PAGE>

     "Owner Trust Loan" means, at any time, the aggregate amount advanced to the
Owner Trustee by the Loan Participants pursuant to the Participation Agreement,
or, where the context may require, the then outstanding principal amount of the
Owner Trust Loan.

     "Permitted Investments" means investments of the type described in clauses
(i) through (v) of Section 22(a) of the Lease.

     "Replacement Airframe" shall mean any airframe substituted for the Airframe
in accordance with Section 5.6 hereof.

     "Replacement Engine" shall mean any engine substituted for an Engine in
accordance with Section 5.6 hereof.

     "Requisite Holders" means Loan Participants (or their transferees) holding
Loan Certificates evidencing 66 2/3% or more of the aggregate principal amount
of the Owner Trust Loan, or, if the Closing Date has not occurred, Loan
Participants having 66 2/3% or more of the aggregate commitments of all Loan
Participants.

     "Secured Obligations" shall have the meaning specified in Section 2.6.

     SECTION 1.2  Reference to Other Documents.

     For all purposes of this Indenture the terms "Owner Trustee" and
"Mortgagee" have the further meanings attributed thereto in the Lease and other
terms used herein in capitalized form but not defined herein are used as defined
in the Lease.

                                  ARTICLE II

                             THE LOAN CERTIFICATES

     SECTION 2.1  Form of Loan Certificates. The Certificates and the
Mortgagee's form of certificate of authentication to appear on the Certificates
shall each be substantially in the form set forth below, with the appropriate
insertions.

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

                                       10
<PAGE>

                        THE CONNECTICUT NATIONAL BANK,

     Not in its Individual Capacity but Solely as Owner Trustee

          Loan Certificate (1992 757 [__]) Due July 1, 2011

No. ___                                                       New York, New York
$___________________                                         December [__], 1992

     1.   THE CONNECTICUT NATIONAL BANK, not in its individual capacity but
solely as owner trustee under the Trust Agreement (herein in such capacity
called the "Owner Trustee") hereby promises to pay to [NAME OF LOAN
PARTICIPANT], or registered transferees, the principal sum of
_________________________ DOLLARS ($_________), in instalments as set forth in
Annex A hereto, together with interest on the unpaid principal amount hereof
from time to time outstanding from and including the date hereof until such
principal amount is paid in full. Interest shall accrue with respect to each
Interest Period at the Adjusted Eurodollar Rate plus the Margin and shall be
payable in arrears on each Interest Payment Date and on the date this
Certificate is paid in full.

     2.   Unless otherwise defined herein, capitalized terms shall have the
meanings set forth in the Indenture. In addition, in this Certificate the
following terms shall have the meanings set forth below:

     "Adjusted Eurodollar Rate" means, for any Interest Period, a rate per annum
equal to the quotient of (i) the Eurodollar Rate for such Interest Period
divided by (ii) 1.00 minus the then applicable Eurodollar Rate Reserve
Requirement, if any.

     "Affected Holder" has the meaning assigned to that term in paragraph 4
hereof.

     "Affected Loan Certificate" has the meaning assigned to that term in
paragraph 4 hereof.

     "Depository Institution" has the meaning assigned to that term in
Regulation D.

     "Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D.

                                       11
<PAGE>

     "Eurodollar Rate" means, for any Interest Period, the arithmetic average
(rounded upwards to the nearest 1/16 of 1%) of the offered quotation, if any, to
first class banks in the London interbank Eurodollar market by each Reference
Bank (as notified by such Reference Bank to the Mortgagee) for Dollar deposits
of amounts in same day funds comparable to the outstanding principal amount of
the Loan Certificate(s) held by such Reference Bank with maturities comparable
to the Interest Period for which such Eurodollar Rate will apply as of
approximately 11:00 a.m. (London time) on the date two Business Days prior to
such Interest Period. If any Reference Bank fails to notify the Mortgagee of any
such offered quotation, the Eurodollar Rate shall be determined on the basis of
the offered quotations by the other Reference Banks.

     "Eurodollar Rate Reserve Requirement" means, for any Interest Period, the
reserve percentage (expressed as a decimal) applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) equal to the stated maximum rate of
all reserves required to be maintained by Depository Institutions and United
States branches and agencies of foreign banks against Eurocurrency Liabilities
(or against any other category of liabilities which includes deposits by
reference to which the interest rate on Loan Certificates is determined or any
category of extensions of credit or other assets which includes loans by a non-
United States office of a Depository Institution to United States residents).

     "Funding Costs" means all reasonable out-of-pocket costs, expenses and
losses which are incurred by a Holder, upon the payment or prepayment of any
principal portion of this Certificate on a date other than an Interest Payment
Date, as the result of (i) the breaking of any deposit obtained to fund this
Certificate prior to the maturity thereof or (ii) the re-employment of such
principal amount during the remaining term of the then applicable Interest
Period at a rate lower than the Eurodollar Rate.

     "Funding Date" means the date of issuance of this Loan Certificate.

     "Funding Profits" means all cash profits which are realized by a Holder
upon the payment or prepayment of any principal portion of this Certificate on a
date other than an Interest Payment Date, as the result of (i) the breaking of
any deposit obtained to fund this

                                       12
<PAGE>
Certificate prior to the maturity thereof or (ii) the re-employment of such
principal amount during the remaining term of the then applicable Interest
Period at a rate higher than the Eurodollar Rate.

      "Indenture" means the Trust Indenture and Mortgage (1992 757 [__]) dated
as of December [__], 1992 between the Owner Trustee and the Mortgagee, as
supplemented, amended or modified from time to time.

      "Interest Payment Date" means the last day of each Interest Period.

      "Interest Period" means the period commencing on December [__], 1992 and
ending on July 1, 1993 and each successive period thereafter commencing on the
Interest Payment Date for the then expiring Interest Period and ending on the
date six months thereafter; provided that:

                 (1) if an Interest Period would otherwise expire on a day which
           is not a Business Day, such Interest Period shall instead expire on
           the next succeeding Business Day; provided that if any Interest
           Period would otherwise expire on a day which is not a Business Day
           but is a day of the month after which no further Business Day occurs
           in such month, such Interest Period shall instead expire on the next
           preceding Business Day;

                 (2) any Interest Period which begins on the last Business Day
           of a calendar month (or on a day for which there is no numerically
           corresponding day in the calendar month at the end of such Interest
           Period) shall, subject to clauses (3) and (4) below, end on the last
           Business Day of a calendar month

                 (3) any Interest Period which ends in the same calendar month
           as a Principal Payment Date shall end on such Principal Payment Date;
           and

                 (4) if any Interest Period would otherwise extend beyond a
           Principal Payment Date, such Interest Period shall instead end on
           such Principal Payment Date.

           "Maturity Date" means July 1, 2011 (or, if such date is not a
Business Day, the immediately preceding Business Day).

                                       13
<PAGE>

     "Margin" means ninety one-hundredths of one percent (0.90%) per annum.

     "Overdue Rate" means, with respect to any past due payment obligation, a
rate per annum which is two percent (2%) per annum over the offered quotation to
first class banks in the London interbank market by National Westminster Bank
PLC at its principal office in London for Dollar deposits of amounts in same day
funds comparable to the amount of such obligation for consecutive one-day
periods, commencing on the due date of such obligation.

     "Principal Payment Date" means each January 1 and July 1 commencing July 1,
1993 and prior to the Maturity Date and also the Maturity Date, provided that if
any Principal Payment Date would otherwise occur on a day which is not a
Business Day, such Principal Payment Date shall instead be the immediately
succeeding Business Day, unless such next succeeding Business Day shall be in
the next calendar month, in which case such Principal Payment Date shall be the
next preceding Business Day.

     "Reference Banks" means National Westminster Bank PLC, The Mitsubishi Trust
and Banking Corporation and ABN AMRO Bank N.V.

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, or any successor regulation.

     3. Interest shall be payable with respect to the first but not the last day
of each Interest Period. All computations of interest shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. This
Certificate shall bear interest at the Overdue Rate on any principal hereof,
and, to the extent permitted by applicable law, interest and other amounts due
hereunder not paid when due (whether at stated maturity, by acceleration or
otherwise and after as well as before judgment), for any period during which the
same shall be overdue, and such interest shall be payable on demand by the
Holder hereof or the Mortgagee.

     4. In the event that not later than two Business Days prior to the first
day of any Interest Period, the Holder shall have determined (which
determination shall be final, conclusive and binding upon all parties but, with
respect to the following clauses (1) and (2)(B), shall be made only after
consultation with the Lessee, the Owner Trustee and the Mortgagee) that:

                                       14
<PAGE>

          (1) by reason of any changes arising after December 20, 1988 affecting
     the Eurodollar market or affecting the position of that Holder in such
     market, adequate and fair means do not exist for ascertaining the
     applicable interest rate by reference to the Eurodollar Rate with respect
     to the principal amount of the Loan Certificate (or portion thereof) as to
     which an interest rate determination is then being made; or

          (2) by reason of (A) any change after the date hereof in any
     applicable law or any governmental rule, regulation or order (or any
     interpretation thereof and including the introduction of any new law or
     governmental rule, regulation or order) or (B) other circumstances
     affecting that Holder or the Eurodollar market or the position of that
     Holder in such market (including, without limitation, official reserve
     requirements required by Regulation D to the extent not given effect in the
     Eurodollar Rate Reserve Percentage), the costs incurred by such Holder do
     not represent the effective cost to such Holder for Dollar deposits of
     amounts comparable to the outstanding principal amount of this Loan
     Certificate for the relevant period;

then, and in any such event, such Holder shall be an "Affected Holder" and its
Loan Certificate shall be an "Affected Loan Certificate" and it shall promptly
give notice (by telephone confirmed in writing) to the Lessee, the Owner Trustee
and the Mortgagee of such determination. Thereafter, the Owner Trustee shall pay
to the Affected Holder, upon written demand therefor, in addition to (but
without duplication of) any amounts owing to such Holder under Section 20(b) of
the Participation Agreement, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as the Affected Holder shall reasonably determine) as shall be required to cause
the Affected Holder to receive interest with respect to such Affected Loan
Certificate for the Interest Period next following at a rate per annum equal to
the sum of the Margin plus the effective pricing to the Affected Holder for
Dollar deposits to make or maintain such Affected Loan Certificate. A
certificate as to additional amounts owed to the Affected Holder, showing in
reasonable detail the basis for the calculation thereof, submitted in good faith
to the Lessee, the Owner Trustee and the Mortgagee by the Affected Holder shall,
absent manifest error, be final, conclusive and binding upon the parties hereto.

     5. The Holder agrees that, as promptly as practicable after it becomes
aware of the occurrence of an event or the existence of

                                       15
<PAGE>

a condition that would cause it to be an Affected Holder under paragraph 4 if
the additional moneys which would otherwise be required to be paid in respect of
this Loan Certificate pursuant to paragraph 4 would be reduced by transferring
this Loan Certificate to another branch or lending office of such Holder without
resulting in an Illegality Event or incurring any material adverse regulatory
consequences or costs for which the Owner Trustee or the Lessee is not willing
to indemnify such Holder, such Holder will effect such transfer, and if such
transfer cannot be effected, to transfer this Loan Certificate to such
transferee as the Lessee may nominate for an amount equal to the principal
amount of this Loan Certificate plus accrued interest and accrued fees, in which
event the Owner Trustee shall pay to the Mortgagee for the account of the
Affected Holder any Funding Costs or the Affected Holder shall pay to the
Mortgagee, for refund to the Owner Trustee, any Funding Profits, as the case may
be, resulting from such transfer (without duplication for other amounts, if any,
payable pursuant to any other provision of the Operative Documents); provided
that (x) the Holder shall not be obligated to pay the Mortgagee any Funding
Profits during the continuance of a Lease Event of Default and (y) subject to
the foregoing, such Holder shall remain entitled to compensation for amounts
payable under paragraph 4 in connection with costs incurred prior to the date of
any such transfer. The Owner Trustee hereby agrees to pay all reasonable
expenses incurred by any Holder in utilizing another lending office of such
Holder pursuant to this paragraph 5.

     6. By its acceptance of this Loan Certificate, the Holder represents and
warrants to the Mortgagee, Lessee and the Owner Trustee that under applicable
law and treaties in effect on the date of this Loan Certificate no taxes are
required to be withheld by the Mortgagee or the Owner Trustee with respect to
any payments to be made to such Holder hereunder. If such Holder is organized
under the laws of any jurisdiction other than the United States or any State
thereof (including the District of Columbia), it agrees to furnish to the
Mortgagee, the Owner Trustee and the Lessee, two copies of either U.S. Internal
Revenue Services Form 4224 or U.S. Internal Revenue Service Form 1001 and/or
Form W-8 or any successor forms thereto (wherein such Holder claims entitlement
to complete exemption from U.S. federal withholding tax on all interest payments
hereunder) and to provide to the Mortgagee, Lessee and the Owner Trustee a new
Form 4224 or Form 1001 and/or Form W-8 or any successor forms thereto if any
previously delivered form is found to be incomplete or incorrect or upon the
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly

                                       16
<PAGE>

executed and completed by the Holder, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption. The undertakings of the Holder hereunder shall not limit the rights
or obligations of such Holder under Sections 7 and 9(z) of the Participation
Agreement.

     7. Under certain circumstances set forth in the Participation Agreement,
the Holder of this Certificate may be required to sell this Certificate to a
Person designated by the Lessee or to the Owner Trustee or the Owner
Participant.

     8. To the extent of funds received from or for the account of Lessee, the
Owner Trustee shall prepay the outstanding principal amount of this Certificate,
together with interest accrued and unpaid thereon to the date of prepayment and
Funding Costs to the extent specified in the Participation Agreement:

          (i) upon the occurrence of an Event of Loss with respect to the
     Aircraft (unless, pursuant to Sections 10(a)(ii) of the Lease and Section
     5.6 of the Indenture, a replacement aircraft shall have been substituted
     for the Aircraft subject to such Event of Loss) on the date specified for
     payment with respect to such Event of Loss in Section 10(a)(i) of the
     Lease; or

          (ii) upon the Lessee's election to terminate the Lease as provided in
     Section 9 or 19(b) of the Lease, on the Termination Date of the Lease as
     provided in Section 9 or 19(b) of the Lease; or

          (iii) upon an optional redemption of all Certificates pursuant to
     Section 18 of the Participation Agreement.

     9. Upon the occurrence and during the continuance of any Indenture Event of
Default, the Mortgagee may declare the entire principal amount of the
Certificates, interest thereon and certain other amounts accrued under the
Indenture to be forthwith due and payable (which acceleration may thereafter be
rescinded as provided in the Indenture), or the foregoing amounts may become
automatically due and payable pursuant to Section 4.3 of the Indenture,
whereupon the Certificates, both as to principal and interest, and such other
amounts shall be forthwith due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Owner Trustee.

                                       17
<PAGE>

     10. Principal, interest and other amounts due hereunder shall be payable in
U.S. dollars in same day funds not later than 11:00 A.M. (New York time) on the
due date thereof, to the account of the Mortgagee designated in writing to the
Owner Trustee. All such payments by the Owner Trustee shall be free and clear of
and without reduction for or on account of any set off, counterclaim or wire or
other similar charges.

     11. The Holder hereof, by its acceptance of this Certificate, agrees that
each payment received by it hereunder shall be applied: first, to the payment of
interest on this Certificate (as well as any interest on overdue principal or,
to the extent permitted by law, interest and other amounts here under) due and
payable to the date of such payment as hereinabove provided, second, to the
payment of any other amount (other than the principal of or interest on this
Certificate) due hereunder or under the Indenture, third, to the payment of the
principal of this Certificate then due, and fourth, the balance, if any,
remaining thereafter, to the payment of instalments of principal of this
Certificate remaining unpaid in the inverse order of the maturity of such
instalments.

     12. This Certificate is one of the Loan Certificates Due July 1, 2011,
referred to in the Indenture and is entitled to the benefits thereof. The
Indenture Estate is held by the Mortgagee as security, in part, for the
Certificates. Reference is hereby made to the Indenture for a statement of the
rights and obligations of the Holder hereof and the nature and extent of the
security for this Certificate, and of the rights and obligations of the other
Certificate Holders and the nature and extent of the security for the other
Certificates, as well as a statement of the terms and conditions of the trusts
created by the Indenture, to all of which terms and conditions in the Indenture
each Holder hereof agrees by its acceptances of this Certificate.

     13. There shall be maintained a Certificate Register for the purpose of
registering transfers and exchanges of Certificates at the Corporate Trust
Office of the Mortgagee or at the office of any successor indenture trustee in
the manner provided in Section 2.7 of the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth, the Certificates
may be assigned, and the Certificates are exchangeable for a like aggregate
original principal amount of Certificates of different authorized denominations,
as requested by the Certificate Holder surrendering the same.

                                       18
<PAGE>

     14. Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee and the Mortgagee shall treat the Person in whose
name this Certificate is registered as the absolute owner hereof for all
purposes, whether or not this Certificate is overdue, and shall not be affected
by notice to the contrary.

     15. Except as otherwise expressly provided in the next sentence, all
payments to be made by the Owner Trustee under the Indenture and this
Certificate shall be made only from the income and proceeds from the Indenture
Estate and only to the extent that the Owner Trustee shall have sufficient
income or proceeds from the Indenture Estate to the extent included in the
Indenture Estate to enable the Mortgagee to make payments in accordance with the
terms hereof. The Holder hereof, by its acceptance of this Certificate, agrees
that it will look solely to the income and proceeds from the Indenture Estate to
the extent available for distribution to it as in the Indenture provided and
that neither the Owner Trustee nor the Mortgagee is personally liable to it for
any amounts payable under the Indenture or this Certificate or for any amounts
payable or liability under any other Certificate or for the failure to perform
any of its covenants in the Operative Documents. The foregoing shall not be
construed as a waiver by the Mortgagee or any Certificate Holder of any rights
which it may otherwise have against the Owner Trustee.

     16. This Loan Certificate shall not be secured by or be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Mortgagee as evidenced by the manual signature of one of
its authorized signatories on the certificate below.

     17. This Certificate shall be governed by and construed in accordance with
the law of the State of New York.

                               *    *    *    *

                                       19
<PAGE>

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

                                               THE CONNECTICUT NATIONAL BANK,
                                               not in its individual capacity,
                                               but solely as owner trustee under
                                               the Trust Agreement

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

                             [FORM OF MORTGAGEE'S
                        CERTIFICATE OF AUTHENTICATION]

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

                                               STATE STREET BANK AND TRUST
                                               COMPANY OF CONNECTICUT, NATIONAL
                                               ASSOCIATION, as Mortgagee

                                                       By
                                                         -----------------------
                                                         Authorized Signatory

                                       20
<PAGE>

                                                                         ANNEX A
                                                                              TO
                                                                LOAN CERTIFICATE

                        SCHEDULE OF PRINCIPAL PAYMENTS

                                                                 Percentage of
                                                                    Original
           Payment Date                                         Principal Amount
           Occurring on                                           To Be Paid
           ------------                                         ----------------

                                       21
<PAGE>

     SECTION 2.2 Issuance and Terms of Loan Certificates.

     On the Closing Date for the Aircraft, there shall be issued to each Loan
Participant or its designee a Loan Certificate or Certificates dated such
Closing Date, designated as having been issued in connection with such Aircraft,
and payable to such Loan Participant, in an original principal amount equal to
the amount of such Loan Participant's Owner Trust Advance.

     Each Loan Certificate shall bear interest at the rate provided therein
(calculated on the basis of a year of 360 days for the actual number of elapsed
days) on the unpaid original principal amount thereof from time to time
outstanding, payable in arrears as specified in such Certificate. The principal
amount of each Loan Certificate shall be payable on the dates and in the
installments equal to the corresponding percentage of the principal amount as
set out in Annex A to such Loan Certificate. Each Loan Certificate shall bear
interest at the Overdue Rate (calculated on the basis of a year of 360 days and
the actual number of days elapsed) on any part of the original principal amount
and, to the extent permitted by applicable law, interest and any other amounts
payable thereunder not paid when due for any period during which the same shall
be overdue.

     The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.4 of this Trust Indenture any and all indemnity
amounts received by the Owner Trustee which are payable by the Lessee in respect
of the Holders of the Loan Certificates pursuant to Section 7 of the
Participation Agreement.

     Before the Closing Date each Loan Participant shall be furnished as Annex A
to the Loan Certificate issued to such Loan Participant an Amortization Schedule
showing the portion of the principal amount payable on such Loan Certificate
with respect to each installment payable on its Loan Certificate.

     The Loan Certificates shall be executed on behalf of the Owner Trustee by
its Chairman of the Board, its President or one of its Vice Presidents,
Assistant Vice Presidents or Assistant Secretaries or other authorized officer.
Loan Certificates bearing the signatures of individuals who were at any time the
proper officers of the Owner Trustee shall bind the Owner Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Loan Certificates or
did not hold such offices at the respective dates of such Loan Certificates. The
Owner Trustee may from time to time

                                       22
<PAGE>

execute and deliver Loan Certificates with respect to the Aircraft to the
Mortgagee for authentication upon original issue and such Loan Certificates
shall thereupon be authenticated and delivered by the Mortgagee upon the written
request of the Owner Trustee signed by a Vice President or Assistant Vice
President or other authorized officer of the Owner Trustee, provided that each
such request shall specify the aggregate principal amount of all Loan
Certificates to be authenticated hereunder on original issue with respect to the
Aircraft. Each Loan Certificate shall be dated the date of its authentication,
which shall be the Closing Date in the case of the original issuance of Loan
Certificates. No Loan Certificate shall be secured by or entitled to any benefit
under this Trust Indenture or be valid or obligatory for any purposes, unless
there appears on such Loan Certificate a certificate of authentication in the
form provided for herein executed by the Mortgagee by the manual signature of
one of its authorized officers and such certificate upon any Loan Certificates
shall be conclusive evidence, and the only evidence, that such Loan Certificate
has been duly authenticated and delivered hereunder.

     SECTION 2.3 Payments from Indenture Estate Only.

     Without impairing any of the other rights, powers, privileges, liens or
security interests of the holders of the Loan Certificates under this Indenture,
each holder of a Loan Certificate, by its acceptance of a Loan Certificate,
agrees that as between it and the Owner Trustee, (i) the obligation to make all
payments of principal amount and interest on the Loan Certificates, Funding
Costs and Increased Cost and the performance by the Owner Trustee of every
obligation or covenant contained in this Indenture and in the Participation
Agreement or any of the other Operative Documents, shall be payable only from
the income and proceeds from the Trust Estate to the extent included in the
Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Indenture Estate to enable the Mortgagee to make such payments in accordance
with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Indenture and any agreement referred to
herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this
Indenture or such other agreements to the contrary notwithstanding (except for
any express provisions or

                                       23
<PAGE>

representations that the Owner Trustee is responsible for, or is making, in its
individual capacity, for which there would be personal liability of the Owner
Trustee), no recourse shall be had with respect to this Indenture or such other
agreements against the Owner Trustee in its individual capacity or against any
institution or person which becomes a successor trustee or co-trustee or any
officer, director, trustee, servant or direct or indirect parent or controlling
person or persons of any of them; and (ii) none of the Owner Trustee, in its
individual capacity, the Owner Participant, and the Mortgagee and any officer,
director, trustee, servant or direct or indirect parent or controlling person or
persons of any of them shall have any personal liability for any amounts payable
hereunder, under the Participation Agreement or any of the other Operative
Documents or under the Loan Certificates; provided, that nothing contained in
this Section 2.3 shall be construed to limit the exercise and enforcement in
accordance with the terms of this Indenture or such other agreements of rights
and remedies against the Trust Estate. These provisions are not intended as any
release or discharge of the indebtedness represented by the Loan Certificates
and this Indenture, but are intended only as a covenant not to sue or otherwise
make or attempt to enforce any claim against the Owner Participant or the Owner
Trustee or the Mortgagee in their individual capacities or any officer,
director, trustee, servant or direct or indirect parent or controlling person or
persons of any of them for a deficiency, the indebtedness represented by this
Indenture and the Loan Certificates to remain in full force and effect as fully
as though these provisions were not contained in this Indenture. The Owner
Trustee hereby acknowledges that the holders of the Loan Certificates have
expressly reserved all their legal rights and remedies against the Trust
Indenture Estate, including, without limitation of the generality of the
foregoing, the right, in the event of a default in the payment of all or part of
the original principal amount or interest on any Loan Certificates, or upon the
occurrence and continuation of any other Event of Default under this Trust
Indenture, to foreclose upon this Trust Indenture, and/or to receive the
proceeds from the Trust Indenture Estate and otherwise to enforce any other
right under this Indenture. Nothing in this Section 2.3 shall release the Owner
Participant from personal liability, or constitute a covenant not to sue the
Owner Participant in its individual capacity, for any breach by it of any of its
covenants contained in Sections 9 or 11 of the Participation Agreement or for
any of the payments it has agreed to make pursuant to Sections 9 or 17 of the
Participation Agreement. In addition, nothing in this Section 2.3 shall release
the Owner Trustee, in its capacity as Owner Trustee under the Trust Agreement or
in its

                                       24
<PAGE>

individual capacity, as the case may be, from personal liability, or constitute
a covenant not to sue the Owner Trustee in its capacity as Owner Trustee or in
its individual capacity, as the case may be, for any breach by it of any
representations, warranties or covenants of the Owner Trustee in its capacity as
Owner Trustee or in its individual capacity, as the case may be, contained in
the Operative Documents.

     SECTION 2.4 Method of Payment.

     (a) The principal amount of and interest on and other amounts due under
each Loan Certificate will be payable in Dollars in immediately available funds
not later than 11:00 a.m., New York time, on the due date of payment to the
Mortgagee at the Corporate Trust Office for distribution among the holders of
the Loan Certificates. The Owner Trustee shall not have any responsibility for
the distribution of such payment to any holders of the Loan Certificates.
Notwithstanding the foregoing or any provision in any Loan Certificate to the
contrary, the Mortgagee will pay or cause to be paid, if so directed in writing
by the holder of a Loan Certificate or the Owner Participant (with a copy to the
Owner Trustee and the Lessee), all such amounts payable by the Owner Trustee
hereunder, and under such holder's Loan Certificate or Loan Certificates to such
holder or a nominee therefor (including all amounts distributed pursuant to
Article III of this Indenture or to the Owner Participant hereunder) by
transferring by wire in immediately available funds in Dollars, prior to 2:00
p.m. New York time on the due date of payment, to an account maintained by such
holder or the Owner Participant, as the case may be, with a bank located in the
continental United States the amount to be distributed to such holder, for
credit to the account of such holder or the Owner Participant, as the case may
be, maintained at such bank. In the event the Mortgagee shall fail to make any
such payment as provided in the immediately foregoing sentence after its receipt
of funds at the place and prior to the time specified above, the Mortgagee, in
its individual capacity and not as trustee, agrees to compensate the holders of
the Loan Certificates and the Owner Participant for loss of use of funds. Any
payment made hereunder shall be made without any presentment or surrender of any
Loan Certificate, except that, in the case of the final payment in respect of
any Loan Certificate, such Loan Certificate shall be surrendered to the
Mortgagee. Notwithstanding any other provision of this Indenture to the
contrary, the Mortgagee shall not be required to make wire transfers as
aforesaid prior to the first Business Day on which it is practicable for the
Mortgagee to do so in view of the time of day when the funds to be so

                                       25
<PAGE>

transferred were received by it if such funds were received after 11:00 a.m.,
New York time at the place of payment. Prior to the due presentment for
registration of transfer of any Loan Certificate, the Owner Trustee and the
Mortgagee may deem and treat the person in whose name any Loan Certificate is
registered on the Loan Certificate Register as the absolute owner and holder of
such Loan Certificate for the purpose of receiving payment of all amounts
payable with respect to such Loan Certificate and for all other purposes, and
neither the Owner Trustee nor the Mortgagee shall be affected by any notice to
the contrary. So long as any signatory to the Participation Agreement or nominee
thereof shall be a registered holder of a Loan Certificate, all payments to it
shall be made in the manner provided in or pursuant to the Participation
Agreement unless it shall have specified some other manner of payment by notice
to the Mortgagee in accordance with this Section 2.4.

     (b) The Mortgagee, as agent for the Owner Trustee, shall exclude and
withhold from each payment of principal amount and interest or other amounts due
hereunder or under Loan Certificates any and all withholding taxes applicable
thereto as required by law. The Mortgagee agrees to act as such withholding
agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect of the Loan Certificates, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the holders of
the Loan Certificates, that it will file any necessary withholding tax returns
or statements when due, and that as promptly as possible after the payment
thereof it will deliver to each holder of the Loan Certificates (with a copy to
the Owner Trustee and the Lessee) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as such holder may
reasonably request from time to time.

     SECTION 2.5 Application of Payments.

     In the case of each Loan Certificate, each payment of original principal
amount and interest or other amounts due thereon shall be applied, first, to the
payment of accrued interest on such Loan Certificate to the date of such payment
(as well as any interest on any overdue principal amount, and to the extent
permitted by law, interest and other amounts thereunder), second, to the payment
of any other amount (other than the principal amount of such Loan Certificate)
due hereunder or under such Loan Certificate, third, to the payment of the
unpaid principal amount of such Loan

                                       26
<PAGE>

Certificate then due thereunder and fourth, the balance, if any, remaining
thereafter, to the payment of the original principal amount of such Loan
Certificate remaining unpaid (provided that such Loan Certificate shall not be
subject to prepayment except as provided therein). The amounts paid pursuant to
clause fourth above shall be applied to the installments of principal amount of
such Loan Certificate in the reverse order of their normal maturity.

     SECTION 2.6 Termination of Interest in Trust Indenture Estate.

     A holder of a Loan Certificate shall not, as such, have any further
interest in, or other right with respect to, the Trust Indenture Estate when and
if the principal amount of, Funding Costs, if any, Increased Cost, if any, and
interest on and other amounts due under all Loan Certificates held by such
holder and all other sums payable out of the Trust Indenture Estate to such
holder hereunder and under the Participation Agreement (collectively, the
"Secured Obligations") shall have been paid in full.

     SECTION 2.7 Registration, Transfer and Exchange of Loan Certificates.

     The Mortgagee shall keep a register (herein sometimes referred to as the
"Loan Certificate Register") in which the Mortgagee shall provide for the
registration of Loan Certificates and the registration of transfers of Loan
Certificates. The Loan Certificate Register shall be kept at the Corporate Trust
Office of the Mortgagee, and the Mortgagee is hereby appointed "Loan Certificate
Registrar" for the purpose of registering Loan Certificates, and transfers of
Loan Certificates as herein provided. Upon surrender for registration of
transfer of any Loan Certificate at the Corporate Trust Office of the Mortgagee,
the Owner Trustee shall execute, and the Mortgagee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Loan Certificates of a like aggregate principal amount. At the option of the
holder, Loan Certificates may be exchanged for other Loan Certificates of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Loan Certificates to be exchanged at the Corporate Trust Office. Whenever
any Loan Certificates are so surrendered for exchange, the Owner Trustee shall
execute, and the Mortgagee shall authenticate and deliver, the Loan Certificates
which the holder making the exchange is entitled to receive. All Loan
Certificates issued upon any registration of transfer or exchange of Loan

                                       27
<PAGE>

Certificates shall be the valid obligations of the Owner Trustee evidencing the
same respective obligations, and entitled to the same security and benefits
under this Trust Indenture, as the Loan Certificates surrendered upon such
registration of transfer or exchange. Every Loan Certificate presented or
surrendered for registration of transfer, shall (if so required by the
Mortgagee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Mortgagee duly executed by the holder
thereof or his attorney duly authorized in writing, and the Mortgagee shall
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act of 1933, as amended and the securities laws of any
state. The Mortgagee shall make a notation on each new Loan Certificate of the
amount of all payments of principal amount previously made on the old Loan
Certificate or Loan Certificates with respect to which such new Loan Certificate
is issued and the date to which interest on such old Loan Certificate or Loan
Certificates has been paid. The Owner Trustee shall not be required to exchange
any surrendered Loan Certificates as provided above during the ten-day period
preceding the due date of any payment on such Loan Certificate. The Owner
Trustee may deem the person in whose name any Loan Certificate shall have been
issued and registered as the absolute owner and holder of such Loan Certificate
for the purpose of receiving payment of all amounts payable by the Owner Trustee
with respect to such Loan Certificate and for all purposes until a notice
stating otherwise is received from the Mortgagee. The Mortgagee will promptly
notify the Owner Trustee and the Lessee of each registration of a transfer of a
Loan Certificate. Any such transferee of a Loan Certificate, by its acceptance
of a Loan Certificate, agrees to the provisions of the Participation Agreement
applicable to Certificate Holders, and shall be deemed to have represented,
warranted and covenanted to the parties to the Participation Agreement as to the
matters set forth in the Participation Agreement.

     SECTION 2.8 Mutilated, Destroyed, Lost or Stolen Loan Certificates.

     If any Loan Certificate shall become mutilated, destroyed, lost or stolen,
the Owner Trustee shall, upon the written request of the holder of such Loan
Certificate, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Loan Certificate, payable in the same principal
amount, dated the same date and designated as issued in connection with the
Aircraft. If the Loan Certificate being replaced has become mutilated, such Loan
Certificate shall be surrendered to the Mortgagee and a photocopy

                                       28
<PAGE>

thereof shall be furnished to the Owner Trustee. If the Loan Certificate being
replaced has been destroyed, lost or stolen the holder of such Loan Certificate
shall furnish to the Owner Trustee and the Mortgagee such security or indemnity
as may be required by them to save the Owner Trustee and the Mortgagee harmless
and evidence satisfactory to the Owner Trustee and the Mortgagee of the
destruction, loss or theft of such Loan Certificate and of the ownership
thereof.

     SECTION 2.9 Payment of Expenses on Transfer.

     Upon the issuance of a new Loan Certificate or Loan Certificates pursuant
to Section 2.7 or 2.8 hereof, the Owner Trustee and/or the Mortgagee may require
from the party requesting such new Loan Certificate or Loan Certificates payment
of a sum to reimburse the Owner Trustee and the Mortgagee for, or to provide
funds for, the payment of any tax or other governmental charge in connection
therewith or any charges and expenses connected with such tax or other
governmental charge paid or payable by the Owner Trustee or the Mortgagee.

     SECTION 2.10 Optional and Mandatory Prepayment.

     On any date fixed for prepayment under the Certificates, same day funds in
Dollars shall be deposited by the Owner Trustee in the account of the Mortgagee
at the place and by the time and otherwise in the manner provided in the
Certificates, in an amount equal to the principal amount of Certificates to be
prepaid together with accrued and unpaid interest thereon to the date fixed for
such prepayment and all other sums then due and payable hereunder and
thereunder.

     SECTION 2.11 Optimization.

     If pursuant to Section 19 of the Participation Agreement the Lessee elects
to optimize the rent and debt payment structures by revising the Amortization
Schedule (subject to the limitations and conditions set forth in Section 19 of
the Participation Agreement), then the terms and conditions of such revised
Amortization Schedule shall be set forth in a supplement to this Indenture
executed by the Owner Trustee and the Mortgagee. The Mortgagee shall execute and
deliver any such supplement upon receipt by the Mortgagee and each holder of
Loan Certificates of the following, each in form and substance satisfactory to
the Mortgagee and each holder of Loan Certificates:

                                       29
<PAGE>

     (a) a copy of such supplemental indenture together with a written request
of the Owner Trustee and the Owner Participant that the Mortgagee execute such
supplemental indenture;

     (b) a certificate of the Owner Trustee stating that it has been instructed
by the Owner Participant to enter into such supplemental indenture and that no
Indenture Event of Default as to the Owner Trustee referred to in subsection
(b), (c), (d) or (e) of Section 4.2 hereof, or any event which, with notice or
passage of time or both, will constitute such Indenture Event of Default, has
occurred and is continuing;

     (c) a certificate of the Owner Participant stating that the new
Amortization Schedule complies with Section 19 of the Participation Agreement
and that it has instructed the Owner Trustee to enter into such supplemental
indenture and that no Indenture Event of Default as to the Owner Participant
referred to in subsection (c), (d), (e), (f) or (g) of Section 4.2 hereof, or
any event which, with notice or passage of time or both, will constitute such
Indenture Event of Default, has occurred and is continuing;

     (d) a certificate of the Lessee stating that no Lease Event of Default, or
any event which, with notice or passage of time or both, will constitute a Lease
Event of Default has occurred and is continuing; and

     (e) such other documents, certificates and opinions as the Mortgagee and
the Certificate Holders may reasonably request.

     Each Certificate Holder shall exchange the Loan Certificates held by it
immediately prior to such optimization for new Loan Certificates containing new
Amortization Schedules provided that the failure of any Certificate Holder to
surrender its Loan Certificate for exchange shall not affect or prevent such
optimization and any Loan Certificate not so surrendered shall be deemed to have
been modified in accordance with such Indenture Supplement.

     SECTION 2.12 Assumption of Loan Certificates by Lessee.

     If, in accordance with Section 9(b) or 19(b) of the Lease, and subject to
the provisions of Section 9(b) or 19(b), as the case may be, thereof, Lessee
shall assume (on a full recourse basis) all of the obligations of the Owner
Trustee hereunder, under the Loan Certificates and all other Operative Documents
by supplemental

                                       30
<PAGE>

indenture satisfactory to the Mortgagee, the Owner Trustee and the Certificate
Holders, then upon delivery of such supplemental indenture, payment by Lessee of
all expenses (including reasonable fees and expenses of counsel) of the Owner
Trustee, the Owner Participant, the Certificate Holders and the Mortgagee and
delivery of an opinion (in form, scope and substance satisfactory to such
Persons) of counsel for Lessee (which may be Lessee's General Counsel) to the
effect that such assumption has been duly and validly effected, the Owner
Trustee and the Owner Participant shall be released and discharged from any
further obligations hereunder and under the Loan Certificates and all other
Operative Documents.

     SECTION 2.13 Funding Costs; Increased Cost; Illegality Events.

     The Loan Certificates are subject to the provisions of Sections 18, 19 and
20 of the Participation Agreement. Amounts payable by the Owner Trustee
thereunder as Funding Costs and Increased Cost shall constitute amounts payable
under the Loan Certificates and pursuant to this Indenture for all purposes
hereof, shall be obligations secured by the Lien of this Indenture, and shall be
subject to the provisions hereof, including without limitation Section 2.3
hereof. Each Certificate Holder, by its acceptance of a Loan Certificate, agrees
(i) to pay to the Owner Trustee any amount which may be payable by it as Funding
Profits as and when due under the terms of the Participation Agreement, (ii) to
perform its obligations with respect to an Increased Cost or Illegality Event as
provided in the Participation Agreement and (iii) to perform its obligations set
forth in paragraphs 4 and 5 of its Loan Certificate.

     SECTION 2.14 Option to Purchase Loan Certificates.

     Each Certificate Holder, by accepting a Loan Certificate, agrees that if
(a) (i) an Indenture Event of Default under this Indenture shall have occurred
and be continuing and the Mortgagee shall have either given the notice referred
to in Section 4.4 or declared the principal amount of the Loan Certificates to
be due and payable as provided in Section 4.4(b) or (c) hereof or (ii) the
Lessee shall be in default (in whole or in part) in the payment, when due, of
Basic Rent, or a Lease Event of Default shall have occurred and be continuing
and (b) the Owner Trustee or the Owner Participant, within 90 days after
receiving the notice from the Mortgagee pursuant to Section 4.4 hereof or within
90 days after receiving written notice from any Certificate Holder or any other
source of such failure to pay Basic Rent or any such Lease Event of

                                       31
<PAGE>

Default, shall have given written notice to the Mortgagee and all Certificate
Holders of its intention to purchase all outstanding Loan Certificates in
accordance with this Section 2.14, then, upon receipt within five Business Days
(during which five Business Days period the Mortgagee and Certificate Holders
shall suspend the exercise of remedies under this Trust Indenture and the Lease)
after such notice from the Owner Trustee or the Owner Participant of an amount
equal to the sum of (1) the aggregate unpaid principal amount of all Loan
Certificates held by such Certificate Holders, together with accrued but unpaid
interest thereon to the date of such receipt, plus (2) the aggregate amount, if
any, of all other Secured Obligations payable to the Certificate Holders but
with the Funding Costs, if any, such Certificate Holders will forthwith sell,
assign, transfer and convey to the Owner Trustee or the Owner Participant, as
the case may be (without representation, recourse or warranty of any kind other
than of title to the Loan Certificates so conveyed), all the right, title and
interest of such Certificate Holders in and to the Trust Indenture Estate, this
Indenture, all Loan Certificates held by such Certificate Holders and such
Certificate Holders' rights under the Participation Agreement (except that such
Certificate Holders shall retain such Certificate Holders' rights under Section
7 of the Participation Agreement with respect to any claim for which such
Certificate Holders shall be entitled to reimbursement or indemnification
thereunder whether before or after such conveyance) and the Owner Trustee or the
Owner Participant, as the case may be, shall thereupon assume all of such
Certificate Holders' rights and obligations under such documents; provided,
however, that no Certificate Holder shall be required to convey the Loan
Certificates held by it unless (aa) all other Loan Certificates at the time
outstanding shall be simultaneously purchased by the Owner Trustee or the Owner
Participant pursuant to this Section 2.14 and (bb) no such conveyance shall be
in violation of any applicable laws and (cc) all charges and expenses required
to be paid pursuant to Section 2.9 in connection with the issuance of any new
Loan Certificates shall have been paid by the Owner Participant or the Owner
Participant shall have agreed to pay the same.

                                  ARTICLE III

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

     SECTION 3.1 Basic Rent Distribution.

                                       32
<PAGE>

     Except as otherwise provided in Section 3.3 hereof, each installment of
Basic Rent, any payment of interest on overdue installments of Basic Rent and
any payment received by the Mortgagee as contemplated by Section 4.3 hereof or
as payment of the Excess Amount or Prepaid Rent referred to in Section 3(c) and
3(g), respectively, of the Lease shall be promptly distributed in the following
order of priority: first, so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments of
principal and interest and other amounts (as well as any interest on overdue
principal and, to the extent permitted by law, on premium, if any, interest and
other amounts) then due under all Loan Certificates shall be distributed to the
holders of such Loan Certificates ratably, without priority of one over the
other, in the proportion that the amount of such payment or payments then due
under each such Loan Certificate bears to the aggregate amount of the payments
then due under all such Loan Certificates; and, second, the balance, if any, of
such installment remaining thereafter shall be distributed to the Owner Trustee;
provided, however, that if a Lease Event of Default or any other Event of
Default shall have occurred and be continuing, then such balance shall not be
distributed as provided in this clause "second" but shall be held by the
Mortgagee as part of the Trust Indenture Estate and invested, as directed by (or
in the absence of same, in investments of the type described in Section 22 of
the Lease) the Owner Trustee (the loss on any such investment to be at the risk
of the Certificate Holders) until whichever of the following shall first occur:
(i) all Events of Default shall have been cured or waived, in which event such
balance shall be distributed as provided in this clause "second", or (ii)
Section 3.3 hereof shall be applicable, in which event such balance shall be
distributed in accordance with the provisions of said Section 3.3, or (iii) the
first Principal Payment Date (as defined in the Loan Certificates) occurring 180
days after the receipt of such payment in which case such payment shall be
distributed as provided in this clause "second".

     SECTION 3.2 Event of Loss and Replacement; Termination.

     Except as otherwise provided in Section 3.3, any payment received by the
Mortgagee with respect to the Aircraft or any component thereof pursuant to
Section 9, 10 or 19 of the Lease or Section 18 of the Participation Agreement
shall be applied to prepayment of the Certificates and to all other amounts
payable thereunder and hereunder by applying such funds: first, to reimburse the
Mortgagee and the Certificate Holders for any Expenses reasonably incurred in
connection with such prepayment

                                       33
<PAGE>

(other than Funding Costs), second, as provided in clause "second" of Section
3.3, third, as provided in clause "third" of Section 3.3, fourth, as provided in
clause "fourth" of Section 3.3 and fifth the balance of any such payments or
amounts remaining thereafter shall be distributed to the Owner Trustee; provided
that if a Replacement Airframe or Replacement Engine(s) is to be substituted for
an Airframe or Engine subject to an Event of Loss as provided in Section 10 of
the Lease and Section 5.6 hereof, any proceeds which result from such Event of
Loss and are paid to the Mortgagee shall be held by the Mortgagee as part of the
Indenture Estate and, unless otherwise applied pursuant to Section 3.3, shall be
released to the Owner Trustee or the Lessee, pursuant to the terms of the Lease,
at the Owner Trustee's written request upon the release of the Airframe or
Engine subject to such Event of Loss and the replacement thereof as provided in
the Lease.

     SECTION 3.3 Payment After Indenture Event of Default, etc.

     Except as otherwise provided in Sections 3.4(b), 3.4(c) and 3.5(ii), all
payments received and amounts held or realized by the Mortgagee after an
Indenture Event of Default shall have occurred and be continuing or after the
Certificates shall have become due and payable as provided in Section 4.4(b) or
(c), as well as all payments or amounts then held by the Mortgagee as part of
the Indenture Estate, shall be promptly distributed by the Mortgagee in the
following order of priority:

          first, so much of such payments or amounts as shall be required to
     reimburse the Mortgagee for any Expenses (including, without limitation,
     the expenses of, any sale, taking or other proceeding, reasonable
     attorneys' fees and expenses, court costs, and any other expenditures
     incurred or expenditures or advances made by the Mortgagee in the
     protection, exercise or enforcement of any right, power or remedy or any
     damages sustained by the Mortgagee, liquidated or otherwise, upon such
     Indenture Event of Default) shall be applied by the Mortgagee in
     reimbursement of such Expenses;

          second so much of such payments or amounts remaining as shall be
     required to reimburse the then existing or prior Certificate Holders for
     payments made pursuant to Section 5.3 (to the extent not previously
     reimbursed) shall be distributed to such Certificate Holders ratably,
     without priority of one over any other, in accordance with the amount of
     the payment or payments made by each such then existing or prior
     Certificate Holder pursuant to Section 5.3 and applicable (in

                                       34
<PAGE>

     the case of each such then existing Certificate Holder) as provided in
     Section 5.3 to the Certificates held by such existing Certificate Holder at
     the time of distribution by the Mortgagee;

          third, so much of such payments or amounts remaining as shall be
     required to pay in full any Funding Costs payable to the Certificate
     Holders hereunder or under the Participation Agreement but not previously
     distributed to them shall be distributed to those Certificate Holders
     entitled thereto; and

          fourth, so much of such payments or amounts remaining as shall be
     required to pay to the Certificate Holders all principal, interest and
     other amounts then due and payable pursuant to the Certificates and this
     Indenture and remaining unpaid shall be distributed to the Certificate
     Holders;

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

     SECTION 3.4 Certain Payments.

     (a) Except as otherwise provided in this Indenture, any payments received
by the Mortgagee for which provision as to the application thereof is made in
the Lease, the Participation Agreement or any other Operative Document shall be
applied forthwith to the purpose for which such payment was made in accordance
with the terms of the Lease, the Participation Agreement or such other Operative
Document, as the case may be.

     (b) The Mortgagee will distribute promptly upon receipt any indemnity
payment received by it from the Owner Trustee or the Lessee in respect of the
Mortgagee in its individual capacity or any Certificate Holder pursuant to
Sections 7, 17 or 20 of the Participation Agreement or Section 2.3 hereof or as
Supplemental Rent, directly to the Person entitled thereto.

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

     (d) The Mortgagee will distribute promptly to the Owner Trustee any amount
received by the Mortgagee from any Certificate

                                       35
<PAGE>

Holder in respect of any Funding Profits required to be paid by such Certificate
Holder to the Owner Trustee pursuant to the Certificate held by such Holder.

     SECTION 3.5 Other Payments.

     Any payments received by the Mortgagee for which no provision as to the
application thereof is made in the Lease, the Participation Agreement, elsewhere
in this Indenture or in any other Operative Document shall be distributed by the
Mortgagee (i) to the extent received or realized at any time prior to the
payment in full of all obligations to the Certificate Holders secured by the
lien of this Indenture, in the order of priority specified in Section 3.1 and
(ii) to the extent received or realized at any time after payment in full of all
obligations to the Certificate Holders secured by the lien of this Indenture, in
the following order of priority: first, in the manner provided in clause "first"
of Section 3.3 and second, in the manner provided in clause "fifth" of Section
3.3.

     SECTION 3.6 Payments to Owner Trustee.

     Any amounts distributed hereunder by the Mortgagee to the Owner Trustee
shall be paid to the Owner Trustee by wire transfer of funds of the type
received by the Mortgagee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from the Owner Trustee to
the Mortgagee from time to time. The Owner Trustee hereby notifies the Mortgagee
that unless and until the Mortgagee receives notice to the contrary from the
Owner Trustee all amounts to be distributed to the Owner Trustee pursuant to
clause "second" of Section 3.1 shall be distributed by wire transfer of funds of
the type received by the Mortgagee to such account of the Owner Participant as
the Owner Trustee may specify by notice to the Mortgagee.

     SECTION 3.7 Investment of Amounts Held by Mortgagee.

     Any amounts held by the Mortgagee pursuant to the provisos to the first
sentence of Section 3.1, pursuant to Section 3.2, or pursuant to any provision
of any other Operative Document providing for amounts to be held by the
Mortgagee which are not distributed pursuant to the other provisions of this
Article III shall be invested by the Mortgagee from time to time in Permitted
Investments selected by the Owner Trustee. Unless otherwise expressly provided
in this Indenture, any income realized as a result of any such investment, net
of the Mortgagee's reasonable

                                       36
<PAGE>

fees and expenses in making such investment, shall be held and applied by the
Mortgagee in the same manner as the principal amount of such investment is to be
applied and any losses, net of earnings and such reasonable fees and expenses,
shall be charged against the principal amount invested. The Mortgagee shall not
be liable for any loss resulting from any investment required to be made by it
under this Indenture other than by reason of its wilful misconduct or gross
negligence, and any such investment may be sold (without regard to its maturity)
by the Mortgagee without instructions whenever such sale is necessary to make a
distribution required by this Indenture.

                                  ARTICLE IV

            COVENANTS OF THE BANK AND THE OWNER TRUSTEE; EVENTS OF
                        DEFAULT; REMEDIES OF MORTGAGEE

     SECTION 4.1 Covenants of the Bank and the Owner Trustee.

     (a) The Bank hereby covenants and agrees that it will not directly or
indirectly create, incur, assume or suffer to exist any Lessor Liens
attributable to it with respect to any of the properties or assets of the
Indenture Estate and will not, without the consent of the Mortgagee, permit the
termination or modification of the Trust Agreement.

     (b) The Owner Trustee hereby covenants and agrees as follows:

          (i) the Owner Trustee will duly and punctually perform its obligations
     under the Lease, will duly and punctually pay the principal of and interest
     on, and all other amounts due under, the Certificates and hereunder in
     accordance with the terms of the Certificates and this Indenture and all
     amounts payable by it to the Certificate Holders under the Participation
     Agreement;

          (ii) the Owner Trustee (x) will not cause or permit to exist a Lessor
     Lien attributable to or caused by it or the Owner Participant with respect
     to the Aircraft or any other portion of the Indenture Estate, (y) will
     promptly, at its own expense, take such action as may be necessary duly to
     discharge any Lessor Lien attributable to or caused by it or the Owner
     Participant and (z) will make restitution to the Indenture Estate for any
     actual diminution of the assets of the Indenture Estate resulting from such
     Lessor Liens attributable to or caused by it or the Owner Participant;

                                       37
<PAGE>

          (iii) in the event a responsible officer in the Corporate Trust
     Department of the Owner Trustee shall have Actual Knowledge of an Indenture
     Default or an Event of Loss, the Owner Trustee will, to the extent notice
     is not otherwise given by Lessee, give prompt written notice of such
     Indenture Default or Event of Loss to the Mortgagee, the Lessee and each
     Certificate Holder;

          (iv) the Owner Trustee will furnish to the Holder of each Certificate
     at the time outstanding and to the Mortgagee, promptly upon receipt
     thereof, duplicates or copies of all reports, notices, requests, demands,
     certificates, financial statements and other instruments furnished to the
     Owner Trustee under the Lease, to the extent that the Owner Trustee shall
     have received notice that the same shall not have been furnished to such
     Certificate Holder or the Mortgagee pursuant to the Lease;

          (v) except as contemplated by this Indenture or any other Operative
     Document, the Owner Trustee will not, without the consent of the Mortgagee,
     contract for, create, incur, assume or suffer to exist any indebtedness and
     will not guarantee (directly or indirectly or by, an instrument having the
     effect of assuring another's payment or performance or any obligation or
     capability of doing so or otherwise), endorse or otherwise be or become
     contingently liable, directly or indirectly, in connection with the
     indebtedness of any other Person;

          (vi) the Owner Trustee will not, without the consent of the Mortgagee,
     enter into any business or other activity other than the business of owning
     the Aircraft, the leasing thereof to the Lessee and the carrying out of the
     transactions contemplated hereby and by the Lease, the Participation
     Agreement, the Trust Agreement and the other Operative Documents; and

          (vii) the Owner Trustee will not, without the prior written consent of
     the Mortgagee acting at the direction of all Certificate Holders,
     terminate, amend, supplement or otherwise modify any provision of the Trust
     Agreement in a manner adversely affecting the Certificate Holders.

     SECTION 4.2 Indenture Event of Default.

                                       38
<PAGE>

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

     (a) any Lease Event of Default (other than a Lease Event of Default arising
solely by reason of the failure to make an Excluded Payment);

     (b) (i) other than by reason of a Lease Event of Default or a failure by
the Mortgagee to pay monies over received by it, (x) the failure of the Owner
Trustee to pay when due any payment of principal of or interest on any
Certificate and such failure shall have continued unremedied for 10 calendar
days, or (y) the failure of the Owner Trustee to pay when due any other amount
due and payable hereunder or under any Certificate and such failure shall have
continued unremedied for 15 days after notice thereof to the Owner Trustee from
the Mortgagee, or (ii) the failure of the Lessee or the Owner Participant to pay
when due any amount payable to the Mortgagee or Certificate Holders pursuant to
the Participation Agreement (including, without limitation, Section 7 thereof)
and such failure shall have continued unremedied for 30 days after notice
thereof to the Owner Trustee and the Lessee from the Mortgagee;

     (c) any representation or warranty made by the Owner Participant, the Owner
Trustee or the Bank herein or in the Participation Agreement shall prove to have
been false or incorrect when made in any respect material to the Certificate
Holders and such falseness or incorrectness shall be material at the time when
notice thereof shall have been given by the Mortgagee to the Owner Participant,
the Owner Trustee or the Bank, as the case may be, and if curable shall not have
been cured (such that such representation or warranty is true and correct on and
as of the date of such cure) within 30 days after such notice;

     (d) any failure by the Owner Trustee to observe any of its covenants in
Section 4.1(b)(ii) or (iii) hereof or Section 9(g) of the Participation
Agreement and such default shall continue for a period of 30 days after a
responsible officer in the Corporate Trust Department of the Owner Trustee shall
have Actual Knowledge of such default or any failure by the Owner Participant to
observe any of its covenants in Section 9(b) or 9(g) of the Participation
Agreement;

                                       39
<PAGE>

     (e) any failure by the Owner Participant, the Owner Trustee or the Bank to
observe or perform any other covenant or obligation of such Owner Participant,
the Owner Trustee or the Bank, as the case may be, contained in this Indenture
or in the Participation Agreement which, in any case, is not remedied within a
period of 30 calendar days after notice thereof has been given by the Mortgagee
to both the Owner Participant and the Bank;

     (f) the Trust Estate or the Owner Trustee with respect thereto (and not in
its individual capacity) or the Owner Participant or the party, if any,
guaranteeing its obligations under any Operative Document to which it is a party
shall (i) be generally not paying its debts as they become due within the
meaning of the United States Bankruptcy Code, (ii) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, (iii) make an
assignment for the benefit of its creditors, (iv) consent to the appointment of
a custodian, receiver, trustee or other officer with similar powers of itself or
of any substantial part of its property or (v) take corporate or comparable
action for the purpose of any of the foregoing;

     (g) a court or governmental authority of competent jurisdiction shall enter
an order appointing, without consent by the Owner Participant, a custodian,
receiver, trustee or other officer with similar powers with respect to the Owner
Participant, or any guarantor, as aforesaid, or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Owner Participant, or any guarantor, as aforesaid, or if any petition for any
such relief shall be filed against the Owner Participant, or any guarantor, as
aforesaid, and such petition shall not be dismissed within, or the order shall
be unstayed and remain in effect for a period of, 60 days; or

     (h) any failure by the Owner Participant or the Owner Trustee to observe or
perform any of its covenants set forth in Section 9(b) of the Participation
Agreement.

     SECTION 4.3 Certain Rights.

                                       40
<PAGE>

     In the event of a Lease Event of Default arising from any default by Lessee
in the payment of any installment of Basic Rent due under the Lease, the Owner
Participant may on or before the tenth day following receipt by the Owner
Participant of notice from the Mortgagee or any Certificate Holder of such Lease
Event of Default (prior to the expiration of which ten-day period the Mortgagee
shall not, without the consent of the Owner Participant, declare the Lease in
default pursuant to Section 15 thereof or exercise any of the rights, powers or
remedies pursuant to Section 15 thereof or Article IV hereof), without the
consent or concurrence of any Certificate Holder and as long as no Indenture
Event of Default other than such Lease Event of Default shall be continuing,
pay, as provided in Section 2.4 hereof, for application in accordance with
Section 3.1 hereof a sum equal to the amount of all (but not less than all) such
overdue Basic Rent, including all such original principal amount and interest as
shall then (without regard to any acceleration pursuant to Section 4.4(c)
hereof) be due and payable on the Loan Certificates. In the event of a Lease
Event of Default arising from any default by Lessee in any obligation under the
Lease other than the payment of Basic Rent, Stipulated Loss Value or Termination
Value, the Owner Participant may on or before the tenth day following receipt by
the Owner Participant of notice from the Mortgagee of any Certificate Holder of
such Lease Event of Default (prior to the expiration of which ten-day period the
Mortgagee shall not, without the consent of the Owner Participant, declare the
Lease in default pursuant to Section 15 thereof or exercise any of the rights,
power or remedies pursuant to Section 15 thereof or Article IV hereof), without
the consent or concurrence of any Certificate Holder and so long as no Indenture
Event of Default other than such Lease Event of Default shall be continuing,
instruct the Owner Trustee to exercise the Owner Trustee's rights under Section
21 of the Lease to perform such obligation on behalf of Lessee provided that the
Owner Participant shall have provided the Owner Trustee with al funds required
to remedy such default. Solely for the purpose of determining whether there
exists an Indenture Event of Default, (a) any payment by the Owner Participant
pursuant to, and in compliance with, the first sentence of this Section 4.3
shall be deemed to remedy any default by Lessee in the payments of installments
of Basic Rent theretofore due and payable and to remedy any default by the Owner
Trustee in the payment of any amount due and payable under the Loan Certificates
or hereunder, and (b) any performance by the Owner Trustee of any obligation of
Lessee under the Lease pursuant to, and in compliance with, the second sentence
of this Section 4.3 shall be deemed to remedy any Lease Event of Default to

                                       41
<PAGE>

the same extent that like performance by Lessee itself would have remedied such
Lease Event of Default (but such payment or performance shall not relieve Lessee
of its duty to pay all Rent and perform all its obligations pursuant to the
Lease). If, on the basis specified in the preceding sentence, any Lease Event of
Default shall have been remedied, then any declaration pursuant to Section 15 of
the Lease that the Lease is in default, and any declaration pursuant to this
Indenture that the Loan Certificates are due and payable or that an Event of
Default exists hereunder, based upon such Lease Event of Default, shall be
deemed to be rescinded, and the Owner Participant shall (to the extent of any
such payments made by it) be subrogated to the rights of the Certificate Holders
hereunder to receive such payment of Rent from the Mortgagee, and the payment of
interest on account of such Rent being overdue, and shall be entitled to receive
such payment upon receipt thereof by the Mortgagee; provided that no such amount
shall be paid to the Owner Participant if an Event of Default shall have
occurred and be continuing and until all amounts then due and payable to each
Certificate Holder hereunder and thereunder shall have been paid in full; and
provided, further, so long as any Secured Obligations are outstanding neither
the Owner Participant nor the Owner Trustee shall attempt to recover any such
amount paid by it on behalf of the Lessee pursuant to this Section 4.3 except by
demanding of the Lessee payment of such amount or by an action against the
Lessee to require the payment of such amount; and further, provided, that:

          (x) this Section 4.3 shall not apply with respect to any default in
     the payment of Basic Rent due under the Lease, if Lessee itself shall have
     failed to pay Basic Rent in the manner required under the Lease with
     respect to (i) the third Basic Rent payment date immediately preceding the
     date of such default or (ii) more than six Basic Rent payment dates, and

          (y) the second sentence of this Section 4.3 shall cease to apply, and
     no payment by the Owner Participant or performance of any obligation of
     Lessee under the Lease by the Owner Trustee shall be deemed to remedy or to
     have remedied any Lease Event of Default for purposes of this Trust
     Indenture if during the twelve-month period immediately preceding the
     relevant default by Lessee there shall have been expended by the Owner
     Participant pursuant to the second sentence of this Section 4.3 (and there
     shall not have been reimbursed by Lessee itself to the Owner Trustee for
     distribution to the Owner Participant) an amount in excess of $4,000,000.

                                       42
<PAGE>

     SECTION 4.4 Remedies.

     (a) If an Indenture Event of Default shall have occurred and be continuing
and so long as the same shall be continuing unremedied, then and in every such
case, the Mortgagee may, consistent with the last two sentences of this Section
4.4(a), exercise any or all of the rights and powers and pursue any and all of
the remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial Code
and, in the event such Indenture Event of Default is an Indenture Event of
Default referred to in paragraph (a) of Section 4.2, any and all of the remedies
pursuant to Section 15 of the Lease and may take possession of all or any part
of the properties covered or intended to be covered by the lien and security
interest created hereby or pursuant hereto and may exclude the Owner Trustee and
the Lessee and all Persons claiming by, through or under any of them wholly or
partly therefrom, provided, that the Mortgagee shall give the Owner Trustee 20
days' prior written notice of its intention to sell the Aircraft. Without
limiting any of the foregoing, it is understood and agreed that the Mortgagee
may exercise any right of sale of the Aircraft available to it (it being
understood that the Owner Trustee and the Owner Participant shall have the right
to bid for and purchase the Aircraft on the same terms as other Persons), even
though it shall not have taken possession of the Aircraft and shall not have
possession thereof at the time of such sale. It is further understood and agreed
that if the Mortgagee shall proceed to foreclose the lien of this Indenture on
the basis of an Indenture Event of Default which is also a Lease Event of
Default (or an event that would be a Lease Event of Default but for the failure
to Mortgagee to give the notice required under the Lease) (in either case not of
the type referred to in clause (f) or (g) of Section 4.2), the Mortgagee shall,
to the extent that it is then entitled to do so hereunder and under the Lease
and is not then stayed or otherwise prevented from doing so by operation of law
or otherwise, proceed (to the extent it has not already done so) to exercise one
or more of the remedies referred to in Section 15 of the Lease (as it shall
determine in its sole good faith discretion). In addition, if so stayed or
prevented by operation of law, the Mortgagee will not foreclose the lien of this
Indenture until the earlier of: (a) the 61st day following the imposition of
such stay or such other order, or such later date (x) not exceeding 60 days
occurring consecutively thereafter by which the 60-day period specified in
Section 1110 of the Bankruptcy Code is extended by order of a court of competent
jurisdiction with respect to the entire fleet of aircraft then leased by the
Lessee or (y) as the

                                       43
<PAGE>

Mortgagee may agree (provided, however, that neither the Mortgagee nor
Certificate Holders shall have any obligation to agree to any such extension),
or (b) actual repossession of the Aircraft.

     (b) If an Indenture Event of Default referred to in clause (f) or (g) of
Section 4.2 shall have occurred, or a Lease Event of Default of the type
referred to in Section 14(f) or (g) of the Lease shall have occurred and be
continuing, then and in every such case the unpaid principal of all Certificates
then outstanding, together with interest accrued but unpaid thereon, and all
other amounts due thereunder and hereunder, shall immediately and without
further act become due and payable, without presentment, demand, protest or
notice, all of which are hereby waived.

     (c) If any other Indenture Event of Default shall have occurred and be
continuing, then and in every such case, the Mortgagee may at any time, by
delivery of 10 days written notice or notices to the Owner Trustee, declare all
the Certificates to be due and payable, whereupon the unpaid principal of all
Certificates then outstanding, together with accrued but unpaid interest thereon
and all other amounts due hereunder and thereunder, shall immediately and
without further act become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.

     (d) Each Certificate Holder shall be entitled, at any sale pursuant to
Section 15 of the Lease, to credit against any purchase price bid at such sale
by such Certificate Holder all or any part of the unpaid obligations owing to
such Certificate Holder and secured by lien of this Indenture.

     SECTION 4.5 Return of Aircraft.

     (a) Subject to Section 4.4 hereof, if an Indenture Event of Default shall
have occurred and be continuing, at the request of the Mortgagee the Owner
Trustee shall promptly execute and deliver to the Mortgagee such instruments of
title and other documents as the Mortgagee may deem necessary or advisable to
enable the Mortgagee or an agent or representative designated by the Mortgagee,
at such time or times and place or places as the Mortgagee may specify, to
obtain possession of all or any part of the Indenture Estate to which the
Mortgagee shall at the time be entitled hereunder. If the Owner Trustee shall
for any reason fail to execute and deliver such instruments and documents after
such request by the Mortgagee, the Mortgagee may (i) obtain a judgment
conferring on the Mortgagee the right to immediate possession and

                                       44
<PAGE>

requiring the Owner Trustee to execute and deliver such instruments and
documents to the Mortgagee, to the entry of which judgment the Owner Trustee
hereby specifically consents, and (ii) pursue all or part of the Indenture
Estate wherever such Indenture Estate may be found and may, in the event that a
Lease Event of Default has occurred and is continuing, enter any of the premises
of the Lessee wherever it may be or be supposed to be and search for and take
possession of and remove the same. All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the lien of this Indenture.

     (b) Upon every such taking of possession, the Mortgagee may, from time to
time, at the expense of the Indenture Estate, make all such expenditures for
maintenance, insurance, use, operation, storage, leasing, control, management,
repairs, replacements, alterations, additions, improvements or dispositions to
and of the Indenture Estate as it may deem proper. In each such case, the
Mortgagee shall have the right to maintain, use, operate, store, lease, control
or manage the Indenture Estate and to carry on the business and, without
limiting the express provisions of Section 5.9, to exercise all rights and
powers of the Owner Trustee relating to the Indenture Estate, as the Mortgagee
shall deem best, including the right to enter into any and all such agreements
with respect to the maintenance, insurance, use, operation, storage, leasing,
control, management, repairs, replacements, alterations, additions, improvements
or disposition of the Indenture Estate or any part thereof as the Mortgagee may
determine; and, except for Excluded Payments, the Mortgagee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Indenture Estate and every part
thereof. Such tolls, rents (including Rent), revenues, issues, income, products
and profits shall be applied (i) to pay the expenses of the use, operation,
storage, leasing, control, management, repairs, replacements, alterations,
additions, improvements or disposition of the Indenture Estate, of conducting
the business thereof and of all maintenance, repairs, replacements, alterations,
additions and improvements, (ii) to make all payments which the Mortgagee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Indenture Estate or any part thereof (including
the employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of the Owner Trustee), (iii) to make
all other payments which the Mortgagee may be required or authorized to make
under any provision of this Indenture and (iv) to pay just and reasonable
compensation for the services of the

                                       45
<PAGE>

Mortgagee and of all Persons properly engaged and employed by the Mortgagee.

     SECTION 4.6 Remedies Cumulative.

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

     SECTION 4.7 Discontinuance of Proceedings.

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

     SECTION 4.8 Waiver of Past Defaults.

     Upon written instructions from the Requisite Holders, the Mortgagee shall
waive any past Indenture Default and its consequences, and upon any such waiver
such Indenture Default shall cease to exist and shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Indenture Default or impair any right consequent
thereon.

                                   ARTICLE V

                                       46
<PAGE>

                            DUTIES OF THE MORTGAGEE

     SECTION 5.1 Notice of Indenture Event of Default.

     In the event the Mortgagee shall have knowledge of an Indenture Event of
Default, the Mortgagee shall give prompt written notice thereof to the Owner
Trustee, the Owner Participant, the Lessee and each holder of a Loan
Certificate. Subject to the terms of Sections 4.8 and 5.3 hereof, the Mortgagee
shall take such action, or refrain from taking such action, with respect to such
Indenture Event of Default (including with respect to the exercise of any rights
or remedies hereunder) as the Mortgagee shall be instructed in writing by the
Requisite Holders. Subject to the provisions of Section 5.3, if the Mortgagee
shall not have received instructions as above provided within 20 calendar days
after mailing notice of such Indenture Event of Default to the holders of the
Loan Certificates, the Mortgagee may, subject to instructions thereafter
received pursuant to the preceding provisions of this Section 5.1, take such
action, or refrain from taking such action, but shall be under no duty to take
or refrain from taking any action, with respect to such Indenture Event of
Default as it shall determine advisable in the best interests of the holders of
the Loan Certificates. In the event the Mortgagee shall at any time declare the
Lease to be in default pursuant to Section 15 thereof or shall elect to
foreclose or otherwise enforce this Indenture, the Mortgagee in its discretion
may, or upon receipt of a written demand therefor from the Requisite Holders,
shall, declare the unpaid principal of all Loan Certificates then outstanding
with accrued interest thereon and other amounts due thereunder to be immediately
due and payable, upon which declaration such principal and such accrued interest
and other amounts due thereunder shall immediately become due and payable
without further act or notice of any kind. In the event the Mortgagee shall at
any time declare the Lease to be in default pursuant to Section 15 thereof or
shall elect to foreclose, or otherwise enforce this Indenture, the Mortgagee
shall forthwith notify the Owner Participant, the holders of the Loan
Certificates, the Owner Trustee and Lessee. For all purposes of this Indenture,
in the absence of Actual Knowledge on the part of the Mortgagee, the Owner
Trustee or the Owner Participant, the Mortgagee, the Owner Trustee or the Owner
Participant, as the case may be, shall not be deemed to have knowledge of an
Indenture Event of Default (except, in the case of the Mortgagee, the failure of
Lessee to pay any installment of Basic Rent within one Business Day after the
same shall become due, if any portion of such installment was then required to
be paid to the Mortgagee, which failure shall constitute knowledge of an Event

                                       47
<PAGE>

of Default) unless notified in writing by Lessee, the Owner Trustee, the Owner
Participant or one or more holders of Loan Certificates. This Section 5.1,
however, is subject to the condition that, if at any time after the principal of
the Loan Certificates shall have become so due and payable, and before any
judgment or decree for the payment of the money so due, or any part thereof,
shall be entered, all overdue payments of interest upon the Loan Certificates
and all other amounts payable under the Loan Certificates or constituting
Secured Obligations (except the principal of the Loan Certificates which by such
declaration shall have become payable) shall have been duly paid, and every
other default and Indenture Event of Default with respect to any covenant or
provision of this Indenture shall have been cured, then and in every such case
the Requisite Holders may (but shall not be obligated to), by written instrument
filed with the Mortgagee, rescind and annul the Mortgagee's declaration and its
consequences; but no such rescission or annulment shall extend to or affect any
subsequent default or Indenture Event of Default or impair any right consequent
thereon.

     SECTION 5.2 Action Upon Instructions; Certain Rights of Owner Trustee.

     (a) Subject to the terms of Sections 4.8, 5.1, 5.3 and 10.5 hereof, upon
the written instructions at any time and from time to time of the Requisite
Holders, the Mortgagee shall take such of the following actions as may be
specified in such instruction: (i) give such notice or direction or exercise
such right, remedy or power hereunder as shall be specified in such
instructions; (ii) after the occurrence and during the continuance of an
Indenture Event of Default hereunder, give such notice or direction or exercise
such right, remedy or power under the Lease, the Participation Agreement, the
Purchase Agreement, the Owner Trustee's Purchase Agreement, or any other part of
the Trust Indenture Estate as shall be specified in such instructions; and (iii)
after the occurrence and during the continuance of an Indenture Event of
Default, approve as satisfactory to the Mortgagee all matters required by the
terms of the Lease to be satisfactory to the Owner Trustee, it being understood
that without the written instructions of the Requisite Holders, the Mortgagee
shall not approve any such matter as satisfactory to the Mortgagee, and it being
further understood, anything contained in this Indenture, the Lease or the other
Operative Documents to the contrary notwithstanding, that (1) the Owner Trustee
shall have the right (together with the Mortgagee but without the consent of the
Mortgagee) (i) to receive financial information supplied pursuant to Section 16
of the Lease, (ii) to

                                       48
<PAGE>

exercise its rights under Section 11(a) (as supplemented by Section 11(h)),
11(c) and 11(e) of the Lease, (iii) to receive from the Lessee all notices,
certificates, reports, filings, opinions of counsel and other documents and all
information which any thereof is permitted or required to give or furnish to the
Owner Trustee or the Lessor pursuant to any Operative Document, and (iv) to
exercise, solely to the extent (x) necessary to enable it to exercise its rights
under Section 4.3 hereof and (y) such rights are then available under Section
4.3 hereof, the rights of the Lessor under Section 21 of the Lease; and (2) so
long as no Indenture Event of Default shall have occurred and be continuing (A)
the exercise of all rights, powers and privileges of the Lessor (as defined in
the Lease) under the Lease (other than the right to give any notice contemplated
by Section 14(b), 14(d) or Section 14(e) of the Lease, any of which notices may
be given by either the Mortgagee or the Owner Trustee) including, without
limitation, entering into any amendment or granting any waiver under the Lease,
or except as specifically contemplated by the Lease consenting to any
termination thereof shall except as provided in clause (D) below only be
exercised jointly by the Mortgagee, acting only upon receipt of instructions as
aforesaid, and by the Owner Trustee, (B) any matter referred to in the Lease, as
requiring or being subject to the consent or approval of, or satisfactory to,
the Owner Trustee or to Lessor (as defined in the Lease) shall be consented to,
approved by or satisfactory to both the Mortgagee, acting upon instructions as
aforesaid, and the Owner Trustee, (C) the Owner Trustee shall have the right to
exercise inspection rights pursuant to Section 12 of the Lease, and (D) the
Owner Trustee and the Owner Participant may, without the consent of the
Mortgagee, exercise rights under (x) the Lease (i) to make adjustments pursuant
to Section 3(c) of the Lease, (ii) to issue redelivery instructions pursuant to
Section 5 of the Lease, (iii) to exercise the rights of the Lessor under Section
9(c) or 19 of the Lease, and (iv) the Owner Trustee and the Owner Participant
shall have the right to exercise any election or option to make any decision or
determination or to give or receive any notice, consent or approval in respect
of, and to demand payment of and enforce the obligation to pay, any Excluded
Payments and (y) Section 9(e) of the Participation Agreement to require the
elimination of countries from Exhibit G to the Lease; provided, however, that
from and after the occurrence of an Indenture Event of Default and so long as
such or any other Event of Default shall be continuing, the Mortgagee, to the
exclusion of the Owner Trustee shall be entitled, acting alone, to exercise the
rights, powers and privileges referred to in clause (A), and give consents or
approvals referred to in clause (B), of this Section 5.2(a). The Mortgagee will
execute and the

                                       49
<PAGE>

Owner Trustee will file or cause to be filed such continuation statements with
respect to financing statements relating to the security interest created
hereunder in the Trust Indenture Estate as may be specified from time to time in
written instructions of the Requisite Holders (which instructions may by their
terms, be operative only at a future date and which shall be accompanied by the
form of such continuation statement so to be filed). The Mortgagee will furnish
to each Certificate Holder, promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates and other instruments
furnished to the Mortgagee under the Lease or hereunder, including, without
limitation, a copy of any Termination Notice and a copy of each report or notice
received pursuant to Sections 9(a) and 11(c) of the Lease, respectively, to the
extent that the same shall not have been furnished to such holder pursuant
hereto or to the Lease.

     (b) If any Lease Event of Default shall have occurred and be continuing and
Section 4.3 hereof shall not apply thereto, on request of the Requisite Holders,
the Mortgagee shall declare the Lease to be in default pursuant to Section 15
thereof. The Mortgagee agrees to provide to the holders of the Loan
Certificates, the Owner Trustee and the Owner Participant concurrently with such
declaration by the Mortgagee, notice of such declaration by the Mortgagee,
provided that the failure to give any such notice to such holders, the Owner
Trustee or the Owner Participant does not affect the validity of such
declaration.

     SECTION 5.3 Indemnification.

     The Mortgagee shall not be required to take any action or refrain from
taking any action under Section 5.1 (other than the first sentence thereof), 5.2
or Article IV hereof unless the Mortgagee shall have been indemnified against
any liability, cost or expense (including counsel fees) which may be incurred in
connection therewith. The Mortgagee agrees that it shall look solely to the
holders of Loan Certificates for the satisfaction of any indemnity owed to it
pursuant to this Section 5.3. The Mortgagee shall not be under any obligation to
take any action under this Indenture and nothing in this Indenture contained
shall require the Mortgagee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. The Mortgagee shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or 5.2 or Article IV hereof, nor

                                       50
<PAGE>

shall any other provision of this Indenture be deemed to impose a duty on the
Mortgagee to take any action, if the Mortgagee shall have been advised by
counsel that such action is contrary to the terms hereof or of the Lease or is
otherwise contrary to law.

     SECTION 5.4 No Duties Except as Specified in Indenture or Instructions.

     The Mortgagee shall not have any duty or obligation to use, operate, store,
lease, control, manage, sell, dispose of or otherwise deal with the Aircraft or
any other part of the Trust Indenture Estate, or to otherwise take or refrain
from taking any action under, or in connection with, this Indenture or any part
of the Trust Indenture Estate, except as expressly provided by the terms of this
Indenture or as expressly provided in written instructions from holders of Loan
Certificates as provided in this Indenture; and no implied duties or obligations
shall be read into this Indenture against the Mortgagee. The Mortgagee agrees
that it in its individual capacity will at its own cost and expense (but without
any right of indemnity in respect of any such cost or expense under Section 7.1
hereof) promptly take such action as may be necessary duly to discharge all
liens and encumbrances on any part of the Trust Indenture Estate which result
from claims against it in its individual capacity not related to the ownership
of the Aircraft or the administration of the Trust Indenture Estate or any other
transaction pursuant to this Indenture or any document included in the Trust
Indenture Estate.

     SECTION 5.5 No Action Except Under Lease, Indenture or Instructions.

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

     SECTION 5.6 Replacement Airframes and Replacement Engines.

     At any time an Airframe or Engine which has been subject to an Event of
Loss is to be replaced under Sections 9(d), 10(a) or 10(b) of the Lease by a
Replacement Airframe or Replacement Engine, the Owner Trustee shall direct the
Mortgagee to execute and deliver to the Owner Trustee an appropriate instrument
releasing such Airframe

                                       51
<PAGE>

and/or Engine as appropriate from the lien of this Indenture and the Mortgagee
shall execute and deliver such instrument as aforesaid, but only upon receipt by
or deposit with the Mortgagee of the following:

          (1) A written request from the Owner Trustee, requesting such release
     and specifically describing the Airframe and/or Engine(s) so to be
     released.

          (2) A certificate signed by a duly authorized officer of Lessee
     stating the following:

               A.   With respect to the replacement of any Airframe:

                    (i) a description of the Airframe which shall be identified
               by manufacturer, model, FAA registration number (or other
               applicable registration information) and manufacturer's serial
               number;

                    (ii) a description of the Replacement Airframe to be
               received (including the manufacturer, model, FAA registration
               number (or other applicable registration information) and
               manufacturer's serial number) as considered for the Airframe to
               be released;

                    (iii) that on the date of the Lease Supplement and Indenture
               Supplement relating to the Replacement Airframe the Owner Trustee
               will be the legal owner of such Replacement Airframe, free and
               clear of all Liens except as are permitted by Section 6 of the
               Lease, that such Replacement Airframe will on such date be in
               good working order and condition, and that such Replacement
               Airframe has been or, substantially concurrently with such
               withdrawal, will be duly registered in the name of the Owner
               Trustee

                                       52
<PAGE>

               under the Federal Aviation Act, or in the name of the Owner
               Trustee or a lessee as "lessee" or "sublessee" under the law then
               applicable to the registration of the Airframe and that an
               airworthiness certificate has been duly issued under such Act (or
               such other applicable law) with respect to such Replacement
               Airframe, and that such registration and certificate is in full
               force and effect, and that Lessee will have the full right and
               authority to use such Replacement Airframe;

                    (iv) the existence of the insurance (or self-insurance)
               required by Section 11 of the Lease with respect to such
               Replacement Airframe and the payment of all premiums then due on
               any such insurance;

                    (v) that the Replacement Airframe is of the same or an
               improved model as the Airframe requested to be released from this
               Trust Indenture and the year of its manufacture is not more than
               one year prior to the year of manufacture of the Airframe
               initially leased pursuant to the Lease;

                    (vi) that the fair market value in the judgment of the
               Lessee of the Replacement Airframe as of the date of such
               certificate (which value shall be confirmed by a nationally
               recognized firm of independent aircraft appraisers acceptable to
               the Requisite Holders and the Owner Participant) is not less than
               the fair market value of the Airframe requested to be released
               immediately prior to the Event of Loss with

                                       53
<PAGE>

               respect thereto (assuming such Airframe was in the condition and
               repair required to be maintained under the Lease);

                    (vii) the fair market value of the Airframe immediately
               prior to the date the Airframe suffered an Event of Loss; and

                    (viii) that no Lease Event of Default and no event which,
               with lapse of time or notice, or both, would become a Lease Event
               of Default, has occurred which has not been remedied or waived,
               and that Lessee will not be in default, by the making and
               granting of the request for release and the addition of a
               Replacement Airframe, in the performance of any of the terms and
               covenants of the Lease; or

               B. With respect to the replacement of any Engine;

                    (i) a description of the Engine which shall be identified by
               manufacturer's serial number;

                    (ii) a description of the Replacement Engine to be received,
               (including the manufacturer's name and serial number) as
               consideration for the Engine to be released;

                    (iii) that on the date of the Lease Supplement and Indenture
               Supplement relating to the Replacement Engine the Owner Trustee
               will be the legal owner of such Replacement Engine free and clear
               of all Liens except as are permitted by Section 6 of the Lease,
               that such Replacement Engine will be on such date in good working
               order and condition and that such Replacement

                                       54
<PAGE>

               Engine is substantially the same or an improved model as the
               Engine to be released;

                    (iv) the fair market value of the Replacement Engine as of
               the date of such certificate which value shall not be less than
               the then fair market value of the Engine to be released
               immediately prior to any Event of Loss suffered by such Engine
               (assuming such Engine was in the condition and repair required to
               be maintained under the Lease));

                    (v) the fair market value of the Engine to be released
               (immediately prior to any Event of Loss suffered by such Engine);

                    (vi) that each of the conditions specified in Section 10(b)
               of the Lease with respect to such Replacement Engine have been
               satisfied and that Lessee will not be in default, by the making
               and granting of the request for release and the addition of the
               Replacement Engine, in the performance of any of the terms and
               covenants of the Lease; and

                    (vii) that, with respect to the replacement of an Engine
               pursuant to Section 10(b) of the Lease, no Lease Event of Default
               and no event which, with lapse of time or notice, or both, would
               become a Lease Event of Default, has occurred which has not been
               remedied or waived.

          (3) The appropriate instruments (i) transferring to the Owner Trustee
     title to the Replacement Airframe or Replacement Engine to be received as
     consideration for the Airframe or Engine to be released and (ii) assigning
     to the Owner Trustee

                                       55
<PAGE>

     the benefit of all manufacturer's and vendor's warranties generally
     available with respect to such Replacement Airframe or Replacement Engine,
     and a Lease Supplement and Indenture Supplement subjecting such Replacement
     Airframe or Replacement Engine to the Lease and, together with any related
     warranty rights, to the lien of this Indenture.

          (4) A certificate from a firm of independent aircraft appraisers
     satisfactory to the Requisite Holders and the Owner Participant confirming
     the accuracy of the information set forth in clause (2)(A)(vi) of this
     Section 5.6.

          (5) An opinion of counsel to Lessee reasonably satisfactory to
     Mortgagee (which counsel, in any event, may be Lessee's General Counsel),
     to the effect that:

          (i) the certificates, opinion and other instruments and/or property
     which have been or are therewith delivered to an deposited with the
     Mortgagee conform to the requirements of this Section 5.6 and the Lease
     (including, without limitation, Section 10(a) of the Lease); and

          (ii) the instruments referred to in clause (3) of this Section 5.6
     have been duly authorized and delivered, the Replacement Airframe or
     Replacement Engine is free and clear of all liens other than Permitted
     Liens, the Replacement Airframe or Replacement Engine has been validly
     subjected to the lien of this Indenture and covered by the Lease, the
     instruments subjecting such Replacement Airframe or Replacement Engine to
     the Lease and to the lien of this Indenture, as the case may be, have been
     duly filed for recordation pursuant to the Federal Aviation Act or any
     other law then applicable to the registration of the Aircraft, and no
     further action, filing or recording of any document is necessary or
     advisable in order to establish and perfect the title of the Owner Trustee
     to and the lien of this Indenture on such Replacement Airframe or
     Replacement Engine.

     SECTION 5.7 Indenture Supplements for Replacements.

     In the event of a Replacement Airframe or Replacement Engine being
substituted as contemplated by Section 10(a) or Section 10(b) of the Lease, the
Owner Trustee and the Mortgagee agree for the benefit of the holders of Loan
Certificates and Lessee, subject to fulfillment of the conditions precedent and
compliance by Lessee with its obligations set forth in Section 10(a) or 10(b) of
the

                                       56
<PAGE>

Lease and the requirements of Section 5.6 hereof with respect to such
Replacement Airframe or Replacement Engine, to execute and deliver a Lease
Supplement and Indenture Supplement as contemplated by Section 5.6(3) hereof
and, provided no Lease Event of Default or event which, with the lapse of time
or giving of notice, or both, would constitute a Lease Event of Default shall
have occurred and be continuing, execute and deliver to Lessee an appropriate
instrument releasing the Airframe or Engine being replaced from the lien of this
Indenture.

     SECTION 5.8 Effect of Replacement.

     In the event of the substitution of a Replacement Airframe as contemplated
by Section 10(a) or of a Replacement Engine pursuant to Sections 9(d) or Section
10(b) of the Lease and, in each case, Section 5.6 hereof, all provisions of this
Indenture relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines with
the same force and effect as if such Replacement Airframe or Replacement Engine
or Engines were the same airframe or engine or engines, as the case may be, as
the Airframe or Engine or Engines being replaced but for the Event of Loss with
respect to the Airframe or Engine or Engines being replaced.

                                  ARTICLE VI

                      THE OWNER TRUSTEE AND THE MORTGAGEE

     SECTION 6.1 Acceptance of Trusts and Duties.

     The Mortgagee accepts the duties hereby created and applicable to it and
agrees to perform the same but only upon the terms of this Indenture and agrees
to receive and disburse all monies constituting part of the Trust Indenture
Estate in accordance with the terms hereof. The Owner Trustee and the Mortgagee
shall not be answerable or accountable under any circumstances, except for their
own willful misconduct or gross negligence, except, in the case of the
Mortgagee, as provided in the last sentence of Section 5.4 of this Indenture,
and except for liabilities that may result, in the case of the Owner Trustee,
from the inaccuracy of any representation or warranty of the Owner Trustee
expressly made in its individual capacity in Sections 9(b), 9(c) or 9(q) of the
Participation Agreement or in Section 6.3 of this Trust Indenture or, in the
case of the Mortgagee, from the inaccuracy of any representations or warranty of
the Mortgagee in Section 9 of the Participation Agreement or expressly made
hereunder. Neither the

                                       57
<PAGE>

Owner Trustee nor the Mortgagee shall be liable for any action or inaction of
the other or of the Owner Participant.

     SECTION 6.2 Absence of Duties.

     In the case of the Mortgagee, except in accordance with written
instructions furnished pursuant to Section 5.1 or 5.2 hereof, and except s
provided in, and without limiting the generality of, Sections 5.3 and 5.4 hereof
and, in the case of the Owner Trustee, except as provided in Section 4.1(b)
hereof, the Owner Trustee and the Mortgagee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of this
Indenture or any other document, or to see to the maintenance of any such
registration, recording or filing, (ii) to see to any insurance on the Aircraft
or to effect or maintain any such insurance, whether or not Lessee shall be in
default with respect thereto, (iii) to see to the payment or discharge of any
lien or encumbrance of any kind against any part of the Trust Estate or the
Trust Indenture Estate, (iv) to confirm, verify or inquire into the failure to
receive any financial statements for Lessee or (v) to inspect the Aircraft at
any time or ascertain or inquire as to the performance or observance of any
Lessee's covenants under the Lease with respect to the Aircraft. The Owner
Participant shall not have any duty or responsibility hereunder, including,
without limitation, any of the duties mentioned in clauses (i) through (v)
above.

     SECTION 6.3 No Representations or Warranties as to Aircraft or Documents.

     NEITHER THE MORTGAGEE NOR THE OWNER TRUSTEE, IN ITS INDIVIDUAL CAPACITY OR
AS OWNER TRUSTEE UNDER THE TRUST AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE
MADE AND EACH HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH
SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR
ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR
ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, except the Owner Trustee in its
individual capacity warrants that on the Closing Date (i) the Owner Trustee
shall have received whatever title was conveyed to it by Lessee and (ii) the
Aircraft shall be free and clear of Lessor Liens (including for this purpose
Liens that would be Lessor Liens but

                                       58
<PAGE>

for the proviso to the definition of Lessor Liens) attributable to the Owner
Trustee in its individual capacity. Neither the Owner Trustee, in its individual
capacity or as Owner Trustee under the Trust Agreement, nor the Mortgagee makes
or shall be deemed to have made any representations or warranty as to the
validity, legality or enforceability of this Indenture, the Trust Agreement, the
Participation Agreement, the Loan Certificates, the Lease, the Owner Trustee's
Purchase Agreement, the Consent and Agreement, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Mortgagee, in each case expressly made in
this Trust Indenture or in Section 9 of the Participation Agreement. The holders
of the Loan Certificates and the Owner Participant make no representation or
warranty hereunder whatsoever.

     SECTION 6.4 No Segregation of Monies; No Interest.

     Any monies paid to or retained by he Mortgagee pursuant to any provision
hereof and not then required to be distributed to the holders of the Loan
Certificates, Lessee or the Owner Trustee as provided in Article III hereof need
to be segregated in any manner except to the extent required by law, and may be
deposited under such general conditions as may be prescribed by law, and the
Mortgagee shall not be liable for any interest thereon (except that the
Mortgagee shall invest all moneys held pursuant to Section 22 of the Lease as
directed by Lessee (or in the absence of such direction, by the Requisite
Holders) in investments of the type described in Section 22 of the Lease),
provided that any payments received, or applied hereunder by the Mortgagee shall
be accounted for by the Mortgagee so that any portion of thereof paid or applied
pursuant hereto shall be identifiable as to the source thereof.

     SECTION 6.5 Reliance; Agents; Advice of Counsel.

     Neither the Owner Trustee nor the Mortgagee shall incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper party
or parties. The Owner Trustee and the Mortgagee may accept copy of a resolution
of the Board of Directors (or Executive Committee thereof) of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force

                                       59
<PAGE>

and effect. As to the aggregate unpaid principal amount of Loan Certificates
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Mortgagee. As to any fact or matter relating to Lessee the
manner of ascertainment of which is not specifically described herein, the Owner
Trustee and the Mortgagee may for all purposes hereof rely on a certificate,
signed by a duly authorized officer of Lessee, as to such fact or matter, and
such certificate shall constitute full protection to the Owner Trustee and the
Mortgagee for any action taken or omitted to be taken by them in good faith in
reliance thereon. The Mortgage shall assume, and shall be fully protected in
assuming, that the Owner Trustee is authorized by the Trust Agreement to enter
into this Indenture and to take all action to be taken by it pursuant to the
provisions hereof, and shall not inquire into the authorization of the Owner
Trustee with respect thereto. In the administration of the trusts hereunder, the
Owner Trustee and the Mortgagee each may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through agents or
attorneys and may, at the expense of the Trust Indenture Estate, consult with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Owner Trustee and the Mortgagee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the written
advice or written opinion of any such counsel, accountants or other skilled
persons.

     SECTION 6.6 Capacity in Which Acting.

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

     SECTION 6.7 Compensation.

     The Mortgagee shall be entitled to reasonable compensation, including
expenses and disbursements, for all services rendered hereunder and shall have a
priority claim on the Trust Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by Lessee,
and shall have the right to use or apply any monies held by it hereunder in the
Trust Indenture Estate toward such payments. The Mortgagee agrees that it shall
have no right against the holders of the Loan Certificates, the Owner Trustee,
or the Owner Participant for any

                                       60
<PAGE>

fee as compensation for its services as trustee under this Indenture.

                                  ARTICLE VII

                 INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE

     SECTION 7.1 Scope of Indemnification.

     The Mortgagee shall be entitled to such indemnification from the parties to
the Operative Documents as is set forth in the Participation Agreement.

                                 ARTICLE VIII

                               SUCCESSOR TRUSTEE

     SECTION 8.1 Notice of Successor Owner Trustee.

     In the case of any appointment of a successor to the Owner Trustee pursuant
to the Trust Agreement upon any merger, conversion, consolidation or sale of
substantially all of the corporate trust business of the Owner Trustee pursuant
to the Trust Agreement, the successor Owner Trustee shall give prompt written
notice thereof to the Mortgagee, the Lessee and to the holders of al Loan
Certificates at the time outstanding.

     SECTION 8.2 Resignation of Mortgage; Appointment of Successor.

                                   ARTICLE I

     The Mortgagee or any successor thereto may resign at any time without cause
by giving at least 30 calendar days prior written notice to the Lessee, the
Owner Trustee, the Owner Participant and each holder of a Loan Certificate, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Mortgagee. In addition, the Requisite Holders may at any time remove
the Mortgagee without cause by an instrument in writing delivered to the Owner
Trustee, the Lessee, the Owner Participant and the Mortgagee, and the Mortgagee
shall promptly notify each holder of a Loan Certificate thereof in writing, such
removal to be effective upon the acceptance of the trusteeship by a successor
Mortgagee. In the case of the resignation or removal of the Mortgagee, the
Requisite Holders may appoint a successor Mortgagee by an instrument signed by
such holders, which successor shall be subject

                                       61
<PAGE>

to Lessee's reasonable approval. If a successor Mortgagee shall not have been
appointed within 30 calendar days after such notice of resignation or removal,
the Mortgagee, the Owner Trustee, the Owner Participant or any holder of a Loan
Certificate may apply to any court of competent jurisdiction to appoint a
successor Mortgagee to act until such time, if any, as a successor shall have
been appointed as above provided. The successor Mortgagee so appointed by such
court shall immediately and without further act be superseded by any successor
Mortgagee appointed as above provided.

                                  ARTICLE II

     Any successor Mortgagee, however appointed, shall execute and deliver to
the Owner Trustee and to the predecessor Mortgagee an instrument accepting such
appointment, and thereupon such successor Mortgagee, without further act, shall
become vested with all the estates, properties, rights, powers and duties of the
predecessor Mortgagee hereunder in the trust hereunder applicable to it with
like effect as if originally named the Mortgagee herein; but nevertheless upon
the writing request of such successor Mortgagee, such predecessor Mortgagee
shall execute and deliver an instrument transferring to such successor
Mortgagee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Mortgagee, and such
predecessor Mortgagee shall duly assign, transfer, deliver and pay over to such
successor Mortgagee all monies or other property then held by such predecessor
Mortgagee hereunder.

                                  ARTICLE III

     Any successor Mortgagee, however appointed, shall be a bank or trust
company having its principal place of business in the Borough of Manhattan, City
and State of New York, Chicago, Illinois, Boston, Massachusetts or Hartford,
Connecticut and having a combined capital and surplus of at least $100,000,000,
if there be such an institution willing, able and legally qualified to perform
the duties of the Mortgagee hereunder upon reasonable or customary terms.

                                  ARTICLE IV

     Any corporation into which the Mortgagee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Mortgagee shall be a party, or any
corporation to which

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<PAGE>

substantially all the corporate trust business of the Mortgagee may be
transferred, shall, subject to the term of paragraph (c) of this Section, be the
Mortgagee under this Indenture without further act.

                                  ARTICLE IX

              SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
                              AND OTHER DOCUMENTS

     SECTION 9.1  Instructions of Certificate Holders; Limitations.

                                   ARTICLE X

     Subject to Section 5.2(a) hereof, Owner Trustee agrees it shall not enter
into any written amendment of or supplement to the Lease, the Purchase
Agreement, the Owner Trustee's Purchase Agreement, or the Consent and Agreement,
or execute and deliver any written waiver or modification of, or consent under,
the terms of the Lease, the Purchase Agreement, the Owner Trustee's Purchase
Agreement or the Consent and Agreement, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Mortgagee.
Anything to the contrary contained herein notwithstanding without the necessity
of the consent of any of the holders of Loan Certificates or the Mortgagee, (i)
any indemnities solely in favor of the Owner Participant or other Excluded
Payments may be modified, amended, changed or waived in such manner as shall be
agreed to by the Owner Participant and Lessee, (ii) the Owner Trustee and Lessee
may enter into amendments of or additions to the Lease to modify Section 5
(except to the extent that such amendment would affect the rights or exercise of
remedies under Section 15 of the Lease), 9 or 19 of the Lease so long as such
amendments, modifications and changes do not and would not affect the time of,
or reduce the amount of, Rent payments until after the payment in full of all
Secured Obligations or otherwise adversely affect the Certificate Holders, and
(iii) the Owner Trustee may make an election under Section 9(c) of the Lease.

                                  ARTICLE XI

     Without limiting the provisions of Section 9.1(a) hereof, the Mortgagee
agrees with the Certificate Holders that it shall not enter into any written
amendment, waiver or modification of, supplement or consent to this Indenture,
the Lease, the Purchase Agreement, the Owner Trustee's Purchase Agreement or the
Consent and Agreement, unless such supplement, amendment, waiver,

                                       63
<PAGE>

modification or consent is consented to in writing by the Requisite Holders, but
upon the written request of the Requisite Holders the Mortgagee shall from time
to time enter into any such supplement or amendment, or execute and deliver any
such waiver, modification or consent, as may be specified in such request and as
may be (in the case of any such amendment, supplement of modification) agreed to
by the Owner Trustee and Lessee or, as may be appropriate, the Manufacturer;
provided, however, that, without the consent of each holder of a Loan
Certificate then outstanding, no such amendment of or supplement to this
Indenture, the Lease, the Purchase Agreement, the Owner Trustee's Purchase
Agreement or the Consent and Agreement or waiver or modification of the terms
of, or consent under, any thereof, shall (i) modify any of the provisions of
this Section 9.1, Sections 2.13 and 4.2 (except to add an Indenture Event of
Default) hereof or Sections 14 (except to add an Event of Default), 18 and 20 of
the Lease, or the definitions of "Indenture Event of Default", "Default", "Lease
Event of Default", "Certificate Holder" or "Requisite Holders" or the percentage
of Certificate Holders required to take or approve any action hereunder, (ii)
except as contemplated by Section 2.13 hereof, reduce the amount, or extend the
time of payment of any amount, of principal or interest with respect to any Loan
Certificate, or alter or modify the provisions of Article III hereof with
respect to the order of priorities in which distribution thereunder shall be
made as between the holders of the Loan Certificates, the Owner Trustee and the
Lessee, (iii) reduce, modify or amend any indemnities in favor of the Owner
Trustee, the Mortgagee, or the holders of the Loan Certificates (except that the
Owner Trustee (in its individual capacity) or the Mortgagee, as the case may be,
may consent to any waiver or reduction of an indemnity payable to it), (iv)
consent to any change in this Indenture or the Lease which would permit
prepayment of Loan Certificates earlier than permitted under Sections 2.10, 2.11
or 2.12 as originally in effect, or (v) except as contemplated by the Lease or
the Participation Agreement, reduce the amount or extend the time of payment of
Basic Rent, Excess Amount, Stipulated Loss Value or Termination Value for the
Aircraft as set forth in the Lease, or modify, amend or supplement the Lease or
consent to any assignment of the Lease, in either case releasing Lessee from its
obligation in respect of the payment of Basic Rent, Stipulated Loss Value or
Termination Value for the Aircraft, altering the absolute and unconditional
character of the obligations of Lessee to pay Rent as set forth in Section 3 and
18 of the Lease or releasing the Owner Trustee from its obligations in respect
of the payment of the Excess Amount. Without the consent of Lessee, no amendment
or supplement to this Indenture or waiver or modification of the terms hereof
shall alter or modify the provisions of this

                                       64
<PAGE>

Section 9.1 or of Article I or of Sections 2.1, 2.2, 2.4, 2.5, 2.7, 2.10, 2.11,
2.12, 2.13. 3.2, 3.4(d), 5.6 or 10.5 hereof if such waiver or modification has
an adverse impact on Lessee or, unless a Lease Event of Default has occurred and
is continuing, of any other Section hereof if such waiver or modification has an
adverse impact on Lessee.

     SECTION 11.1  Trustees Protected.

     If, in the opinion of the institution acting as Owner Trustee under the
Trust Agreement or the institution acting as Mortgagee hereunder, any document
required to be executed by it pursuant to the terms of Section 9.1 hereof
affects any right, duty, immunity or indemnity with respect to such institution
under this Indenture or the Lease, such institution may in its discretion
decline to execute such document.

     SECTION 11.2  Documents Mailed to Certificate Holders.

     Promptly after the execution by the Owner Trustee or the Mortgagee of any
document entered into pursuant to Section 9.1 hereof, the Mortgagee shall mail,
by certified mail, postage prepaid, a conformed copy thereof to the Lessee and
to each holder of a Loan Certificate at its address last set forth in the
register for the Loan Certificates maintained pursuant to Section 2.7 hereof,
but the failure of the Mortgagee to mail such conformed copies shall not impair
or affect the validity of such document.

     SECTION 11.3  No Request Necessary for Lease Supplement or Trust Agreement
and Indenture Supplement.

     No written request or consent of the Mortgagee or the Certificate Holders
or of the Owner Participant pursuant to Section 9.1 hereof shall be required to
enable the Owner Trustee to enter into any Lease Supplement with Lessee
specifically required by the terms of the Lease as originally in effect or to
execute and deliver an Indenture Supplement specifically required by the terms
hereof as originally in effect.

                                  ARTICLE XII

                                 MISCELLANEOUS

     SECTION 12.1  Termination of Trust Indenture.

                                       65
<PAGE>

     Upon (or at any time after) payment in full of the principal of and
interest on and all other amounts due under all Loan Certificates and provided
that there shall then be no other Secured Obligations due to the Loan
Participants, the holders of the Loan Certificates and the Mortgagee hereunder
or under the Participation Agreement, the Owner Trustee shall direct the
Mortgagee to execute and deliver to or as directed in writing by the Owner
Trustee an appropriate instrument releasing the Aircraft and the Engines from
the lien of this Indenture and releasing the Lease, the Owner Trustee's Bill of
Sale, the Purchase Agreement, the Owner Trustee's Purchase Agreement and the
Consent and Agreement from the assignment and pledge thereof hereunder and the
Mortgagee shall execute and deliver such instrument as aforesaid; provided,
however, that this Indenture and the trusts created hereby shall earlier
terminate and this Indenture shall be of no further force or effect upon any
sale or other final disposition by the Mortgagee of all property constituting
part of the Trust Indenture Estate and the final distribution by the Mortgagee
of all monies or other property or proceeds constituting part of the Trust
Indenture Estate in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Indenture and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.

     SECTION 12.2  No Legal Title to Trust Indenture Estate in Certificate
Holders.

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

     SECTION 12.3  Sale of Aircraft by Mortgagee is Binding.

     Any sale or other conveyance of the Aircraft by the Mortgagee made pursuant
to the terms of this Indenture or of the Lease shall bind the holders of the
Loan Certificates and shall be effective to transfer or convey all right, title
and interest of the Mortgagee, the Owner Trustee, the Owner Participant and such
holders in and to the Aircraft. No purchaser or other grantee shall be required
to inquire as to the authorization, necessity, expediency or

                                       66
<PAGE>

regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Mortgagee.

     SECTION 12.4  Trust Indenture for Benefit of Owner Trustee, Mortgagee,
Owner Participant and Holders of Loan Certificates.

     Except as set forth in Section 9.1(b) or Section 10.5 hereof, nothing in
this Indenture, whether express or implied, shall be construed to give any
person other than the Owner Trustee, the Mortgagee, the Owner Participant and
the holders of the Loan Certificates, any legal or equitable right, remedy or
claim under or in respect of this Indenture.

     SECTION 12.5  No Action Contrary to Lessee's Rights Under the Lease.

     Notwithstanding any of the provisions of this Indenture or the Trust
Agreement to the contrary, neither the Mortgagee nor the Owner Trustee will take
any action contrary to Lessee's rights under the Lease, including the right to
possession and use of, and the quiet enjoyment of the Aircraft, except in
accordance with provisions of the Lease.

     SECTION 12.6  Notices.

     Unless otherwise expressly specified or permitted by the terms hereof, all
notices, requests demands authorizations, directions, consents, waivers or
documents provided or permitted by this Indenture to be made, given, furnished
or filed shall be in writing, personally delivered or mailed by certified mail,
postage prepaid, or by telecopier or confirmed telex, and (i) if to the Owner
Trustee, addressed to it at its office at 777 Main Street, Hartford Connecticut
06115, Attention: Corporate Trust Administration (M.S.N. -238), telecopier
number (203) 240-7920 with a copy to the Owner Participant addressed as provided
in clause (iii) below, (ii) if Mortgagee, addressed to it at 750 Main Street,
Suite 1114, Hartford, Connecticut 06103, Attention: Corporate Trust Department,
telecopier number: (203) 244-1899, (iii) if to any Participant, Lessee or any
holder of a Loan Certificate, addressed to such party at such address as such
party shall have furnished by notice to the Owner Trustee and the Mortgagee, or
until an address is so furnished, addressed to the address of such party (if
any) set forth in the Participation Agreement or the register for Loan
Certificates maintained pursuant to Section 2.7 hereof. Whenever any notice in
writing is required to be given by the Owner Trustee

                                       67
<PAGE>

or the Mortgagee or any holder of a Loan Certificate to any of the other of
them, such notice shall be deemed given and such requirement satisfied when such
notice is received, or if such notice is mailed by certified mail, postage
prepaid, three Business Days after being mailed, addressed as provided above.
Any party hereto may change the address to which notices to such party will be
sent by giving notice of such change to the other parties to this Trust
Indenture.

     SECTION 12.7  Severability.

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

     SECTION 12.8  No Oral Modification or Continuing Waivers.

     No term or provision of this Indenture or the Loan Certificates may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party or other person against whom enforcement of the
change, waiver, discharge or termination is sought; and any waiver of the terms
hereof or of any Loan Certificate shall be effective only in the specific
instance and for the specific purpose given.

     SECTION 12.9  Successors and Assigns.

     All covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, each of the parties hereto and the permitted successors
and assigns of each, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by any holder of a Loan
Certificate shall bind the successors and assigns of such holder. This Indenture
and the Trust Indenture Estate shall not be affected by any amendment or
supplement to the Trust Agreement or by any other action taken under or in
respect of the Trust Agreement, except that each reference in this Indenture to
the Trust Agreement shall mean the Trust Agreement as amended and supplemented
from time to time to the extent permitted hereby, thereby and by the
Participation Agreement. Each Certificate Holder by its acceptance of a Loan
Certificate agrees to be bound by this Indenture and all provisions of the
Participation Agreement applicable to it.

                                       68
<PAGE>

     SECTION 12.10  Headings.

     The headings of the various Articles and sections herein and in the table
of contents hereto are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

     SECTION 12.11  Normal Commercial Relations.

     Anything contained in this Trust Indenture to the contrary notwithstanding,
any Participant or any bank of other affiliate of such Participant may conduct
any banking or other financial transactions, and have banking or other
commercial relationships, with Lessee, fully to the same extent as if this
Indenture were not in effect, including without limitation the making or loans
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.

     SECTION 12.12  Governing Law; Counterpart Form.

     This Indenture shall in all respects be governed by, and construed in
accordance with, the internal laws of the State of New York, including all
matters of construction, validity and performance. This Indenture may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.

                       *          *         *          *

                                       69
<PAGE>

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

                                            STATE STREET BANK AND TRUST COMPANY
                                            OF CONNECTICUT, NATIONAL ASSOCIATION

                                                 Mortgagee

                                            By:
                                               ---------------------------------

                                            Title:
                                                  ------------------------------

                                            Name:
                                                 -------------------------------

                                          THE CONNECTICUT NATIONAL BANK, not in
                                          its individual capacity except as
                                          expressly provided herein, but solely
                                          as Owner Trustee

                                                 Owner Trustee

                                            By:
                                               ---------------------------------

                                            Title:
                                                  ------------------------------

                                            Name:
                                                 -------------------------------

                                       70
<PAGE>

                                                 [Trust Indenture (1992 757 __)]

                                                                       EXHIBIT A
                                                                              to
                                                                 Trust Indenture
                                                                    and Mortgage

                  INDENTURE SUPPLEMENT NO. 1 (1992 757     )

         INDENTURE SUPPLEMENT NO. 1 (1992 757     ), dated December   , 1992 by
THE CONNECTICUT NATIONAL BANK, not in its individual capacity but solely as
owner trustee under the Trust Agreement (in such capacity, herein called the
"Owner Trustee").

                             W I T N E S S E T H:

     WHEREAS the Trust Indenture and Mortgage (1992 757        ) dated as of
December   , 1992 (herein called the "Indenture"), between the Owner Trustee and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION as
Mortgagee (herein called the "Mortgagee"), provides for the execution and
delivery of a supplement thereto substantially in the form hereof which shall
particularly describe the Aircraft (such term and other defined terms in the
Indenture being herein used with the same meanings) and any Replacement Airframe
or Replacement Engine included in the Indenture Estate, and shall specifically
mortgage such Aircraft, replacement airframe or replacement engine, as the case
may be, to the Mortgagee; and

     /1/[WHEREAS the Indenture relates to the Airframe and Engines described
below and a counterpart of the Indenture is attached hereto and made a part
hereof and this Indenture Supplement, together with such counterpart of the
Indenture, is being filed for recordation on the date hereof with the Federal
Aviation Administration as one document.]

     /2/[WHEREAS the Indenture and an Indenture Supplement No. 1 dated December
, 1992 (the Indenture being attached to and made a part of such Indenture
Supplement and filed therewith), have been duly recorded pursuant to the Federal
Aviation Act on [             , 19   ], as one document and have been assigned
Conveyance No.        ]

--------
     /1/  This recital is to be included only in the first Indenture Supplement.

     /2/  This recital not to be included in the first Indenture Supplement.

<PAGE>

     NOW, THEREFORE, this Indenture Supplement witnesseth, that, to secure the
prompt payment of the principal of and interest on, and all other amounts due
with respect to, all Certificates from time to time outstanding under the
Indenture and the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions for the benefit of the Certificate Holders
in the Indenture and in the Participation Agreement and the Certificates
contained, and the prompt payment of all amounts from time to time, owing under
the Participation Agreement by the Owner Trustee to the Certificate Holders and
for the uses and purposes and subject to the terms and provisions of the
Indenture, and in consideration of the premises and of the covenants contained
in the Indenture, and of the acceptance of the Certificates by the Certificate
Holders, and of the sum of $1.00 paid to the Owner Trustee by the Mortgagee at
or before the delivery hereof, the receipt whereof is hereby acknowledged, the
Owner Trustee has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Mortgagee, its
successors and assigns, for the security and benefit of the Certificate Holders,
in the trust created by the Indenture, all right, title and interest of the
Owner Trustee in, to and under the following described property, and in, to and
under the Lease Supplement with respect to the following described property:

                                   AIRFRAME

                                            FAA                 Manufacturer's
                                        Registration                Serial
Manufacturer           Model               Number                   Number
------------           -----               ------                   ------
The Boeing            757-222
Company

together with all appliances, equipment, instruments and accessories (including
without limitation, radio and radar) installed in or appurtenant to said
aircraft.

                                    ENGINES

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

Pratt & Whitney                    PW2037

                                      A-2
<PAGE>

                                               [Trust Indenture (1992 757 __)]

Pratt & Whitney                         PW2037

each of which engines has 750 or more rated takeoff horsepower or the equivalent
of such horsepower, together with all equipment and accessories thereto, by
whomsoever manufactured, installed in or appurtenant to said aircraft engines.

     TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, for the benefit and security of the
Certificate Holders, for the uses and purposes and subject to the terms and
provisions set forth in the Indenture.

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

     AND, FURTHER, the Owner Trustee hereby acknowledges that the property
referred to in this Indenture Supplement has been delivered to the Owner Trustee
and is included in the property of the Owner Trustee and covered by the lien of
the Indenture.

                       *              *               *

                                      A-3
<PAGE>

     IN WITNESS WHEREOF, the Owner Trustee has caused this Indenture Supplement
to be duly executed the day and year first above written.

                                            THE CONNECTICUT NATIONAL BANK, not
                                            in its individual capacity but
                                            solely as Owner Trustee under the
                                            Trust Agreement

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

                                      A-4

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