EXHIBIT 4.27 NOTE PURCHASE AGREEMENT Dated as of March 21, 1997

EXHIBIT 4.27

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NOTE PURCHASE AGREEMENT

Dated as of March 21, 1997

Among

CONTINENTAL AIRLINES, INC.,

WILMINGTON TRUST COMPANY,
as Pass Through Trustee under each of the
Pass Through Trust Agreements

WILMINGTON TRUST COMPANY,
as Subordination Agent

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent

and

WILMINGTON TRUST COMPANY,
as Paying Agent

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INDEX TO NOTE PURCHASE AGREEMENT

Page

SECTION 1. Financing of New Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Schedules

Schedule I New Aircraft and Scheduled Delivery Months
Schedule II Pass Through Trust Agreements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule

Annex

Annex A Definitions

Exhibits

Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit B Form of Delivery Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
Exhibit D-1 Form of Special Participation Agreement
Exhibit D-2 Form of Special Lease
Exhibit D-3 Form of Special Indenture
Exhibit D-4 Form of Special Trust Agreement

NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT, dated as of March 21, 1997,
among (i)CONTINENTAL AIRLINES, INC., a Delaware corporation (the "Company"),
(ii)WILMINGTON TRUST COMPANY ("WTC"), a Delaware banking corporation, not in
its individual capacity except as otherwise expressly provided herein, but
solely as trustee (in such capacity together with its successors in such
capacity, the "Pass Through Trustee") under each of the four separate Pass
Through Trust Agreements (as defined below), (iii)WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as subordination agent and trustee (in such
capacity together with its successors in such capacity, the "Subordination
Agent") under the Intercreditor Agreement (as defined below), (iv)FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as Escrow
Agent (in such capacity together with its successors in such capacity, the
"Escrow Agent"), under each of the Escrow and Paying Agent Agreements (as
defined below) and (v) WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as Paying Agent (in such capacity together with its successors in
such capacity, the "Paying Agent") under each of the Escrow and Paying Agent
Agreements.

W I T N E S S E T H:

WHEREAS, capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in Annex A hereto;

WHEREAS, the Company has obtained commitments from the
Manufacturer pursuant to the Aircraft Purchase Agreement for the delivery of
the 30 aircraft listed in Schedule I hereto (together with any aircraft
substituted therefor in accordance with the Aircraft Purchase Agreement upon a
total loss of an aircraft prior to the delivery thereof, the "New Aircraft");

WHEREAS, pursuant to each of the Pass Through Trust Agreements
set forth in Schedule II hereto (the "Pass Through Trust Agreements"), and
concurrently with the execution and delivery of this Agreement, separate
grantor trusts (collectively, the "Pass Through Trusts" and, individually, a
"Pass Through Trust") have been created to facilitate certain of the
transactions contemplated hereby, including, without limitation, the issuance
and sale of pass through certificates

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pursuant thereto (collectively, the "Certificates") to provide for a portion of
the financing of the New Aircraft;

WHEREAS, the Company has entered into the Certificate Purchase
Agreement dated as of March 12, 1997 (the "Certificate Purchase Agreement")
with the several purchasers (the "Initial Purchasers") named therein, which
provides that each Pass Through Trustee will issue and sell the Certificates to
the Initial Purchasers;

WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositary entered into the Deposit
Agreements set forth in Schedule III hereto (the "Deposit Agreements") whereby
the applicable Escrow Agent agreed to direct the Initial Purchasers to make
certain deposits referred to therein on the Issuance Date (as defined in the
Certificate Purchase Agreement) (the "Initial Deposits") and to permit the
applicable Pass Through Trustee to make additional deposits from time to time
thereafter (the Initial Deposits together with such additional deposits are
collectively referred to as the "Deposits") and (ii) the Pass Through Trustees,
the Initial Purchasers, the Paying Agents and the Escrow Agents entered into
the Escrow and Paying Agent Agreements set forth in Schedule IV hereto (the
"Escrow and Paying Agent Agreements") whereby, among other things, (a) the
Initial Purchasers agreed to deliver an amount equal to the amount of the
Initial Deposits to the Depositary on behalf of the applicable Escrow Agent and
(b) the applicable Escrow Agent, upon the Depositary receiving such amount, has
agreed to deliver escrow receipts to be affixed to each Certificate;

WHEREAS, prior to the delivery of each New Aircraft, the
Company will determine whether to enter into a leveraged lease transaction as
lessee with respect to such New Aircraft (a "Leased Aircraft") or to purchase
as owner such New Aircraft (an "Owned Aircraft") and will give to the Pass
Through Trustee a Delivery Notice (as defined below) specifying its election;

WHEREAS, upon receipt of a Delivery Notice with respect to a
New Aircraft, subject to the terms and conditions of this Agreement, the
applicable Pass Through Trustees will enter into the applicable Financing
Agreements relating to such New Aircraft;

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WHEREAS, upon the delivery of each New Aircraft, each Pass
Through Trustee will fund its purchase of Equipment Notes with the proceeds of
one or more Deposits withdrawn by the applicable Escrow Agent under the related
Deposit Agreement bearing the same interest rate as the Certificates issued by
such Pass Through Trust; and

WHEREAS, concurrently with the execution and delivery of this
Agreement, (i)ABN AMRO Bank N.V., a bank organized under the laws of The
Netherlands acting through its Chicago Branch and ING Bank N.V., a bank
organized under the laws of The Netherlands (collectively, the "Liquidity
Providers"), each has entered into four revolving credit agreements (each, a
"Liquidity Facility"), one each for the benefit of the Certificateholders of
each Pass Through Trust, with the Subordination Agent, as agent for the Pass
Through Trustee on behalf of each such Pass Through Trust and (ii)the Pass
Through Trustee, the Liquidity Providers and the Subordination Agent have
entered into the Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement");

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

SECTION 1. Financing of New Aircraft. (a) The Company
confirms that it has entered into the Aircraft Purchase Agreements with the
Manufacturer pursuant to which the Company has agreed to purchase, and the
Manufacturer has agreed to deliver, the New Aircraft in the months specified in
Schedule I hereto, all on and subject to terms and conditions specified in the
applicable Aircraft Purchase Agreement. The Company agrees to finance the New
Aircraft in the manner provided herein, all on and subject to the terms and
conditions hereof and of the relevant Financing Agreements.

(b) In furtherance of the foregoing, the Company agrees
to give the parties hereto, the Depositary and each of the Rating Agencies not
less than two Business Days' prior notice (a "Delivery Notice") of the
scheduled delivery date (the "Scheduled Delivery Date") (or, in the case of a
substitute Delivery Notice under Section 1(e) or (f) hereof, one Business Day's
prior

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notice) in respect of each New Aircraft under the Aircraft Purchase Agreement,
which notice shall:

(i) specify whether the Company has elected to treat such
New Aircraft as a Leased Aircraft or an Owned Aircraft;

(ii) specify the Scheduled Delivery Date of such New
Aircraft (which shall be a Business Day before the Cut-off Date and,
except as provided in Section 1(f) hereof, the date (the "Funding
Date") on which the financing therefore in the manner provided herein
shall be consummated);

(iii) instruct the Pass Through Trustee to instruct the
Escrow Agent to provide a Notice of Purchase Withdrawal to the
Depositary with respect to the Equipment Notes to be issued in
connection with the financing of such New Aircraft;

(iv) instruct the Pass Through Trustee to enter into the
Participation Agreement included in the Financing Agreements with
respect to such Aircraft in such form and at such a time on or before
the Funding Date specified in such Delivery Notice and to perform its
obligations thereunder;

(v) specify the aggregate principal amount of each series
of Equipment Notes to be issued, and purchased by the Pass Through
Trustees, in connection with the financing of such New Aircraft
scheduled to be delivered on such Funding Date (which shall in all
respects comply with the Mandatory Economic Terms); and

(vi) if such New Aircraft is to be a Leased Aircraft,
certify that the related Owner Participant is (A) not an Affiliate of
the Company and (B) either (1) a Qualified Owner Participant or (2)
any other person the obligations of which under the Owner Participant
Agreements (as defined in the applicable Participation Agreement) are
guaranteed by a Qualified Owner Participant.

Notwithstanding the foregoing, in the event the date of issuance of the
Certificates coincides with the Scheduled Delivery Date of the first Aircraft
to be financed pursuant to the terms hereof, the Delivery Notice therefor may
be delivered to the parties hereto on such Scheduled Delivery Date.

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(c) Upon receipt of a Delivery Notice, the Pass Through
Trustees (subject to Section 1(d)) shall, and shall cause the Subordination
Agent to, enter into and perform their obligations under the Participation
Agreement specified in such Delivery Notice, provided that such Participation
Agreement and the other Lease Financing Agreements, Special Financing
Agreements or Owner Financing Agreements to be entered into pursuant to such
Participation Agreement shall be in the forms thereof annexed hereto in all
material respects with such changes therein as shall have been requested by the
related Owner Participant, agreed to by the Company and, if modified in any
material respect, as to which Rating Agency Confirmation shall have been
obtained from each Rating Agency by the Company (to be delivered by the Company
to the applicable Pass Through Trustee on or before the relevant Delivery Date,
it being understood that if Rating Agency Confirmation shall have been received
with respect to any Financing Agreements and such Financing Agreements are
utilized for subsequent New Aircraft (or Substitute Aircraft) without material
modifications, no additional Rating Agency Conformation shall be required);
provided, however, that the relevant Financing Agreements as executed and
delivered shall not vary the Mandatory Economic Terms and shall contain the
Mandatory Document Terms. Notwithstanding the foregoing, (i) if The Boeing
Company or any of its Affiliates is the Owner Participant with respect to any
Leased Aircraft, the Lease Financing Agreements to be entered into pursuant to
the Delivery Notice with respect to such Leased Aircraft may be modified from
the forms annexed hereto to exclude from amounts secured under the applicable
Indenture the "Additional Excluded Amounts," as such term was defined in the
Lease Agreement 116, between the Company, as Lessee and First Security Bank of
Utah, National Association, Owner Trustee, as Lessor, dated as of March 15,
1996, as amended by Lease Agreement 116 Amendment No. 1, dated as of May 20,
1996, and such Lease Financing Agreements, as so modified, shall be deemed (A)
to be substantially in forms thereof annexed hereto and (B)by virtue of such
modification not to be inconsistent with the Mandatory Document Terms and (ii)
if any Financing Document annexed hereto shall not have been reviewed by either
Rating Agency prior to the Issuance Date, then, prior to the use thereof in
connection with the financing of any Aircraft hereunder, the Company shall
obtain from each Rating Agency a confirmation that the use of such Financing
Documents would not result in (i) a reduction of the rating for any Class of

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Certificates below the then current rating for such Class of Certificates or
(ii) a withdrawal or suspension of the rating of any Class of Certificates.
With respect to each New Aircraft, the Company shall cause WTC (or such other
person that meets the eligibility requirements to act as loan trustee under the
Leased Aircraft Indenture, Owned Aircraft Indenture or Special Indenture) to
execute as Loan Trustee the Financing Agreements relating to such Aircraft to
which such Loan Trustee is intended to be a party, and shall concurrently
therewith execute such Financing Agreements to which the Company is intended to
be a party and perform its respective obligations thereunder. Upon the request
of either Rating Agency, the Company shall deliver or cause to be delivered to
each Rating Agency a true and complete copy of each Financing Agreement
relating to the financing of each New Aircraft together with a true and
complete set of the closing documentation (including legal opinions) delivered
to the related Loan Trustee, Subordination Agent and Pass Through Trustee under
the related Participation Agreement.

(d) Notwithstanding the provisions of Section 2.01 of
each of the C-I Pass Through Trust Agreement and C-II Pass Through Trust
Agreement, the parties hereto agree that the C-II Trustee shall not use (and
the Company will not request the C-II Trustee to use) the proceeds of any of
the C-II Deposits to purchase any Series C Equipment Notes in connection with
the financing hereunder of a New Aircraft unless and until the C-I Trustee has
used (or, simultaneously therewith, will use) the proceeds of all C-I Deposits
to purchase Series C Equipment Notes.

(e) If after giving any Delivery Notice, there shall be a
delay in the delivery of a New Aircraft, or if on the Scheduled Delivery Date
of a New Aircraft the financing thereof in the manner contemplated hereby shall
not be consummated for whatever reason, the Company shall give the parties
hereto prompt notice thereof. The Company shall, concurrently with the giving
of such notice of postponement or subsequently, give the parties hereto a
substitute Delivery Notice specifying the date to which such delivery and
related financing shall have been re-scheduled (which shall be a Business Day
before the Cut-off Date on which the Escrow Agents shall be entitled to
withdraw one or more Deposits under each of the applicable Deposit Agreements
to enable each applicable Pass Through Trustee to fund its purchase of the
related Equipment Notes). Upon receipt of any such notice of postponement,
each applicable Pass Through Trustee shall comply with its obligations under
Section 2.01(b) of each of the Pass Through Trust Agreements and thereafter the
financing of the

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relevant New Aircraft shall take place on the re-scheduled Delivery Date
therefor (all on and subject to the terms and conditions of the relevant
Financing Agreements) unless further postponed as provided herein.

(f) Anything in this Section 1 to the contrary
notwithstanding, the Company shall have the right at any time on or before the
Scheduled Delivery Date of any New Aircraft, and subsequent to its giving a
Delivery Notice therefor, to postpone the Scheduled Delivery Date of such New
Aircraft so as to enable the Company to change its election to treat such New
Aircraft as a Leased Aircraft or an Owned Aircraft by written notice of such
postponement to the other parties hereto. The Company shall subsequently give
the parties hereto a substitute Delivery Notice complying with the provisions
of Section 1(b) hereof and specifying the new Funding Date therefor (which
shall be a Business Day occurring before the Cut-off Date and on which the
Escrow Agents shall be entitled to withdraw Deposits under each of the
applicable Deposit Agreements sufficient to enable each applicable Pass Through
Trustee to fund its purchase of the related Equipment Notes). In addition, the
Company shall have the further right, anything in this Section 1 to the
contrary notwithstanding, to accept delivery of a New Aircraft under the
applicable Aircraft Purchase Agreement on the Delivery Date thereof by
utilization of bridge financing of such New Aircraft and promptly thereafter
give the parties hereto a Delivery Notice specifying a Funding Date not later
than 30 days after the Delivery Date of such New Aircraft and otherwise
complying with the provisions of Section 1(a) hereof. All other terms and
conditions of this Note Purchase Agreement shall apply to the financing of any
such New Aircraft on the re-scheduled Funding Date therefor except (i)the
re-scheduled Funding Date shall be deemed the Delivery Date of such New
Aircraft for all purposes of this Section 1 and (ii)The related Financing
Agreements shall be amended to reflect the original delivery of such New
Aircraft to the Company.

(g) If the Scheduled Delivery Date for any New Aircraft
is delayed (a) more than 30 days beyond the last day of the month set forth
opposite such Aircraft under the heading "Scheduled Delivery Months" in
Schedule I hereto or (b) beyond June 30, 1998, the Company may identify for
delivery a substitute aircraft therefor meeting the following conditions (a
"Substitute Aircraft"): (i) a Substitute Aircraft must be a Boeing 757-200,
737-500 or 737-700 aircraft manufactured after the date of this

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Agreement, (ii) one or more Substitute Aircraft of the same or different types
may be substituted for one or more New Aircraft of the same or different types
so long as after giving effect thereto such substitution does not vary the
Mandatory Economic Terms and (iii) the Company shall be obligated to obtain
Rating Agency Confirmation in respect of the replacement of any New Aircraft by
Substitute Aircraft. Upon the satisfaction of the conditions set forth above
with respect to a Substitute Aircraft, the New Aircraft to be replaced shall
cease to be subject to this Agreement and all rights and obligations of the
parties hereto concerning such New Aircraft shall cease, and such Substitute
Aircraft shall become and thereafter be subject to the terms and conditions of
this Agreement to the same extent as such New Aircraft.

(h) The Company shall have no liability for the failure
of the Pass Through Trustees to purchase Equipment Notes with respect to any
New Aircraft or Substitute Aircraft, other than the Company's obligation, if
any, to pay the Deposit Make-Whole Premium and the Class II Premium pursuant to
Section 4(a)(i) of this Agreement.

(i) The Company agrees that if, in connection with the
delivery of a New Aircraft or Substitute Aircraft, any Owner Participant who is
to be a party to any Lease Financing Agreement or Special Financing Agreement
shall not be a "Citizen of the United States" within the meaning of Section
40102(a)(15) of the Act, then the applicable Leased Aircraft Participation
Agreement or Special Participation Agreement shall be modified, consistent with
the Mandatory Document Terms, to require such Owner Participant to enter into a
voting trust, voting powers or similar arrangement satisfactory to the Company
that (A) enables such New Aircraft or Substitute Aircraft to be registered in
the United States and (B) complies with the FAA regulations issued under the
Act applicable thereto.

(j) Anything herein to the contrary notwithstanding,
(i)The Company shall not have the right, and shall not be entitled, at any time
to request the issuance of Equipment Notes of any series to any Pass Through
Trustee in an aggregate principal amount in excess of the amount of the
Deposits then available for withdrawal by the Escrow Agent under and in
accordance with the provisions of the related Deposit Agreement; and (ii)if any
New Aircraft is not delivered and financed by the Company under the Financing
Agreements in its respective

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Scheduled Delivery Months, then the Company shall use reasonable efforts to
assure that the aggregate amortization schedule of the Equipment Notes will
correspond as closely as reasonably practicable to the aggregate amortization
schedule set forth in Schedule VII hereto.

SECTION 2. Conditions Precedent. The obligation of the Pass
Through Trustees to enter into, and to cause the Subordination Agent to enter
into, any Participation Agreement as directed pursuant to a Delivery Notice and
to perform its obligations under such Participation Agreement is subject to
satisfaction of the following conditions:

(a) no Triggering Event shall have occurred; and

(b) the Company shall have delivered a certificate to
each such Pass Through Trustee and each Liquidity Provider stating
that (i) such Participation Agreement and the other Financing
Agreements to be entered into pursuant to such Participation Agreement
do not vary the Mandatory Economic Terms and contain the Mandatory
Document Terms and (ii)any substantive modification of such Financing
Agreements from the forms thereof attached to this Agreement do not
materially and adversely affect the Certificateholders, and such
certification shall be true and correct.

Anything herein to the contrary notwithstanding, the
obligation of each Pass Through Trustee to purchase Equipment Notes shall
terminate on the Cut-off Date.

SECTION 3. Representations and Warranties. (a) The Company
represents and warrants that:

(i) the Company is duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware and is a "citizen of the United States" as defined in
49 U.S.C. Section 40102, and has the full corporate power,
authority and legal right under the laws of the State of
Delaware to execute and deliver this Agreement and each
Financing Agreement to which it will be a party and to carry
out the obligations of the Company under this Agreement and
each Financing Agreement to which it will be a party;

(ii) the execution and delivery by the Company of
this Agreement and the performance by the Company of

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its obligations under this Agreement have been duly authorized
by the Company and will not violate its Certificate of
Incorporation or by-laws or the provisions of any indenture,
mortgage, contract or other agreement to which it is a party
or by which it is bound; and

(iii) this Agreement constitutes the legal, valid
and binding obligation of the Company enforceable against it
in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether
considered in a proceeding at law or in equity.

(b) WTC represents and warrants that:

(i) WTC is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware
and is a "citizen of the United States" as defined in 49
U.S.C. Section 40102, and has the full corporate power,
authority and legal right under the laws of the State of
Delaware and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a
party and to carry out the obligations of WTC, in its capacity
as Subordination Agent, Pass Through Trustee or Paying Agent,
as the case may be, under this Agreement and each Financing
Agreement to which it will be a party;

(ii) the execution and delivery by WTC, in its
capacity as Subordination Agent, Pass Through Trustee or
Paying Agent, as the case may be, of this Agreement and the
performance by WTC, in its capacity as Subordination Agent,
Pass Through Trustee or Paying Agent, as the case may be, of
its obligations under this Agreement have been duly authorized
by WTC, in its capacity as Subordination Agent, Pass Through
Trustee or Paying Agent, as the case may be, and will not
violate its articles of association or by-laws or the
provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and

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(iii) this Agreement constitutes the legal, valid
and binding obligations of WTC, in its capacity as
Subordination Agent, Pass Through Trustee or Paying Agent, as
the case may be, enforceable against it in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a
proceeding at law or in equity.

(c) The Pass Through Trustee hereby confirms to each of
the other parties hereto that its representations and warranties set forth in
Section 7.15 of each Pass Through Trust Agreement are true and correct as of
the date hereof.

(d) The Subordination Agent represents and warrants that:

(i) the Subordination Agent is duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware, and has the full corporate power, authority
and legal right under the laws of the State of Delaware and
the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver this Agreement and
each Financing Agreement to which it is or will be a party and
to perform its obligations under this Agreement and each
Financing Agreement to which it is or will be a party;

(ii) this Agreement has been duly authorized,
executed and delivered by the Subordination Agent; this
Agreement constitutes the legal, valid and binding obligations
of the Subordination Agent enforceable against it in
accordance with its terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether
considered in a proceeding at law or in equity;

(iii) none of the execution, delivery and
performance by the Subordination Agent of this Agreement
contravenes any law, rule or regulation of the State of
Delaware or any United States governmental

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authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Subordination Agent and do not
contravene or result in any breach of, or constitute a default
under, the Subordination Agent's articles of association or
by-laws or any agreement or instrument to which the
Subordination Agent is a party or by which it or any of its
properties may be bound;

(iv) neither the execution and delivery by the
Subordination Agent of this Agreement nor the consummation by
the Subordination Agent of any of the transactions
contemplated hereby requires the consent or approval of, the
giving of notice to, the registration with, or the taking of
any other action with respect to, any Delaware governmental
authority or agency or any federal governmental authority or
agency regulating the Subordination Agent's banking, trust or
fiduciary powers;

(v) there are no Taxes payable by the
Subordination Agent imposed by the State of Delaware or any
political subdivision or taxing authority thereof in
connection with the execution, delivery and performance by the
Subordination Agent of this Agreement (other than franchise or
other taxes based on or measured by any fees or compensation
received by the Subordination Agent for services rendered in
connection with the transactions contemplated by the
Intercreditor Agreement or any of the Liquidity Facilities),
and there are no Taxes payable by the Subordination Agent
imposed by the State of Delaware or any political subdivision
thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Equipment
Notes (other than franchise or other taxes based on or
measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with
the transactions contemplated by the Intercreditor Agreement
or any of the Liquidity Facilities); and

(vi) there are no pending or threatened actions or
proceedings against the Subordination Agent before any court
or administrative agency which individually or in

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the aggregate, if determined adversely to it, would materially
adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement.

(e) The Escrow Agent represents and warrants that:

(i) the Escrow Agent is a national banking
association duly incorporated, validly existing and in good
standing under the laws of the United States and has the full
corporate power, authority and legal right under the laws of
the United States pertaining to its banking, trust and
fiduciary powers to execute and deliver this Agreement, each
Deposit Agreement and each Escrow and Paying Agent Agreement
(collectively, the "Escrow Agent Agreements") and to carry out
the obligations of the Escrow Agent under each of the Escrow
Agent Agreements;

(ii) the execution and delivery by the Escrow
Agent of each of the Escrow Agent Agreements and the
performance by the Escrow Agent of its obligations hereunder
and thereunder have been duly authorized by the Escrow Agent
and will not violate its articles of association or by-laws or
the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and

(iii) each of the Escrow Agent Agreements
constitutes the legal, valid and binding obligations of the
Escrow Agent enforceable against it in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a
proceeding at law or in equity.

(f) The Paying Agent represents and warrants that:

(i) the Paying Agent is duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware and has the full corporate power, authority
and legal right under the laws of the United States pertaining
to its banking, trust and fiduciary powers to execute and
deliver this Agreement and the

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Escrow and Paying Agent Agreement (collectively, the "Paying
Agent Agreements") and to carry out the obligations of the
Paying Agent under each of the Paying Agent Agreements;

(ii) the execution and delivery by the Paying
Agent of each of the Paying Agent Agreements and the
performance by the Paying Agent of its obligations hereunder
and thereunder have been duly authorized by the Paying Agent
and will not violate its articles of association or by-laws or
the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and

(iii) each of the Paying Agent Agreements
constitutes the legal, valid and binding obligations of the
Paying Agent enforceable against it in accordance with its
terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a
proceeding at law or in equity.

SECTION 4. Covenants. (a) The Company covenants with each
of the other parties hereto that:

(i) on the date that the Depositary is obligated to pay
the amount of the Final Withdrawal to the Paying Agent pursuant to a
Deposit Agreement relating to any Trust, the Company shall pay to the
Pass Through Trustee of such Trust no later than 12:30 p.m. (New York
time) an amount equal to (i) in the case of the Class C-II Trust, the
Class C-II Premium to be paid in respect of such Final Withdrawal
amount and (ii) in the case of each other Trust, the Deposit
Make-Whole Premium to be paid in respect of such Final Withdrawal
amount;

(ii) subject to Section 4(a)(iv) of this Agreement, the
Company shall at all times maintain its corporate existence and shall
not wind-up, liquidate or dissolve or take any action, or fail to take
any action, that would have the effect of any of the foregoing;

(iii) the Company shall at all times remain a U.S. Air
Carrier and shall at all times be otherwise certificated

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and registered to the extent necessary to entitle (i) in the case of
Leased Aircraft, the Owner Trustee (and the Loan Trustee as assignee
of the Owner Trustee's rights under each Lease) to the rights afforded
to lessors of aircraft equipment under Section 1110 and (ii) in the
case of Owned Aircraft, the Loan Trustee to the rights afforded to
secured parties of aircraft equipment under Section 1110;

(iv) Section 13.2.2 of each Lease is hereby incorporated
by reference herein; and

(v) the Company agrees to provide written notice to each
of the parties hereto of the occurrence of the Cut-off Date no later
than one Business Day after the date thereof; such notice to
specifically refer to the Pass Through Trustee's obligation to assign,
transfer and deliver all of it's right, title and interest to the
Trust Property (as defined in each Pass Through Trust Agreement) to
the trustee of the Related Trust (as defined in each Pass Through
Trust Agreement) in accordance with Section 11.01 of each of the Pass
Through Trust Agreements.

(b) WTC, in its individual capacity, covenants with each
of the other parties to this Agreement that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as a
"citizen of the United States" as defined in 49 U.S.C. Section 40102 and
promptly upon public disclosure of negotiations in respect of any transaction
which would or might adversely affect such status, notify in writing all
parties hereto of all relevant matters in connection therewith. Upon WTC
giving any such notice, WTC shall, subject to Section 8.02 of any Indenture
then entered into, resign as Loan Trustee in respect of such Indenture.

SECTION 5. Notices. Unless otherwise specifically provided
herein, all notices required or permitted by the terms of this Agreement shall
be in English and in writing, and any such notice shall become effective upon
being delivered personally or, if promptly confirmed by mail, when dispatched
by facsimile or other written telecommunication, addressed to such party hereto
at its address or facsimile number set forth below the signature of such party
at the foot of this Agreement.

SECTION 6. Expenses. (a) The Company agrees to pay an
amount or amounts equal to the fees payable to the relevant

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Liquidity Provider under Section 2.03 of each Liquidity Facility and the
related Fee Letter (as defined in the Intercreditor Agreement) multiplied by a
fraction the numerator of which shall be the then outstanding aggregate amount
of the Deposits under the Deposit Agreements and the denominator of which shall
be the sum of (x) the then outstanding aggregate principal amount of the Series
A Equipment Notes, Series B Equipment Notes and Series C Equipment Notes issued
under all of the Indentures and (y) the then outstanding aggregate amount of
the Deposits under the Deposit Agreements.

(b) So long as no Equipment Notes have been issued in
respect of any Aircraft, the Company agrees to pay (i) (A) the amount equal to
interest on any Downgrade Advance (other than any Applied Downgrade Advance)
payable under Section 3.07(e) of each Liquidity Facility minus Investment
Earnings while such Downgrade Advance shall be outstanding, (B) the amount
equal to interest on any Non-Extension Advance (other than any Applied
Non-Extension Advance) payable under Section 3.07(a)(i) of each Liquidity
Facility minus Investment Earnings while such Non-Extension Advance shall be
outstanding and (C) any other amounts owed to the Liquidity Provider by the
Subordination Agent as borrower under each Liquidity Facility (other than
amounts due as repayment of advances thereunder or as interest on such
advances, except to the extent payable pursuant to clause (A) or (B)), (ii) all
compensation and reimbursement of expenses, disbursements and advances payable
by the Company under the Pass Through Trust Agreements, (iii) all compensation
and reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income or
franchise taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement and (iv) in the event
the Company requests any amendment to any Operative Agreement, all reasonable
fees and expenses (including, without limitation, fees and disbursements of
counsel) of the Escrow Agent and/or the Paying Agent in connection therewith.
For purposes of this Section 6(b), the terms "Applied Downgrade Advance",
"Applied Non-Extension Advance", "Downgrade Advance", "Investment Earnings" and
"Non- Extension Advance" shall have the meanings specified in each Liquidity
Facility.

SECTION 7. Further Assurances. Each party hereto shall duly
execute, acknowledge and deliver, or shall cause to be executed, acknowledged
and delivered, all such further agreements, instruments, certificates or
documents, and shall do

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19

and cause to be done such further acts and things, in any case, as any other
party hereto shall reasonably request in connection with its administration of,
or to carry out more effectually the purposes of, or to better assure and
confirm unto it the rights and benefits to be provided under, this Agreement.

SECTION 8. Miscellaneous. (a) Provided that the
transactions contemplated hereby have been consummated, and except as otherwise
provided for herein, the representations, warranties and agreements herein of
the Company, the Subordination Agent, the Escrow Agent, the Paying Agent and
the Pass Through Trustee, and the Company's, the Subordination Agent's, the
Escrow Agent's, the Paying Agent's and the Pass Through Trustee's obligations
under any and all thereof, shall survive the expiration or other termination of
this Agreement and the other agreements referred to herein.

(b) This Agreement may be executed in any number of
counterparts (and each of the parties hereto shall not be required to execute
the same counterpart). Each counterpart of this Agreement, including a
signature page executed by each of the parties hereto, shall be an original
counterpart of this Agreement, but all of such counterparts together shall
constitute one instrument. Neither this Agreement nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified orally, but only
by an instrument in writing signed by the party against which the enforcement
of the termination, amendment, supplement, waiver or modification is sought.
The index preceding this Agreement and the headings of the various Sections of
this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof. The terms of
this Agreement shall be binding upon, and shall inure to the benefit of, the
Company and its successors and permitted assigns, the Pass Through Trustee and
its successors as Pass Through Trustee (and any additional trustee appointed)
under any of the Pass Through Trust Agreements, the Escrow Agent and its
successors as Escrow Agent under the Escrow and Paying Agent Agreements, the
Paying Agent and its successors as Paying Agent under the Escrow and Paying
Agent Agreement and the Subordination Agent and its successors as Subordination
Agent under the Intercreditor Agreement.

(c) This Agreement is not intended to, and shall not,
provide any person not a party hereto (other than the Initial Purchasers and
each of the beneficiaries of Section 6 hereof)

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20

with any rights of any nature whatsoever against any of the parties hereto, and
no person not a party hereto (other than the Initial Purchasers and each of the
beneficiaries of Section 6 hereof) shall have any right, power or privilege in
respect of, or have any benefit or interest arising out of, this Agreement.

SECTION 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

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

CONTINENTAL AIRLINES, INC.

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

Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Executive Vice
President and Chief
Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON TRUST COMPANY,
not in its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee

By
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President

Address: ▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

21
22

WILMINGTON TRUST COMPANY,
not in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent

By
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President

Address: ▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent

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

Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

22
23

WILMINGTON TRUST COMPANY,
as Paying Agent

By
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President

23
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SCHEDULE I to
Note Purchase Agreement

NEW AIRCRAFT AND SCHEDULED DELIVERY MONTHS

Manufacturer's Serial Scheduled Delivery
New Aircraft Type Aircraft Tail Number Number Months
----------------- -------------------- --------------------- ------------------

Boeing 757-224 118 27560 March 1997
Boeing 757-224 119 27561 May 1997
Boeing 757-224 120 27562 June 1997
Boeing 757-224 121 27563 July 1997
Boeing 757-224 122 27564 August 1997
Boeing 757-224 126 28966 December 1997
Boeing 757-224 123 27565 January 1998
Boeing 757-224 127 28967 January 1998
Boeing 737-524 638 28899 July 1997
Boeing 737-524 639 28900 July 1997
Boeing 737-524 640 28901 August 1997
Boeing 737-524 641 28902 August 1997
Boeing 737-524 642 28903 August 1997
Boeing 737-524 643 28904 September 1997
Boeing 737-524 644 28905 September 1997
Boeing 737-524 645 28906 October 1997
Boeing 737-524 646 28907 October 1997
Boeing 737-524 647 28908 November 1997
Boeing 737-524 648 28909 November 1997
Boeing 737-524 649 28910 December 1997
Boeing 737-524 650 28911 December 1997
Boeing 737-524 651 28912 December 1997
Boeing 737-524 652 28913 January 1998
Boeing 737-524 653 28914 January 1998
Boeing 737-524 654 28915 February 1998
Boeing 737-524 655 28916 February 1998
Boeing 737-724 701 28762 January 1998
Boeing 737-724 702 28763 January 1998
Boeing 737-724 703 28764 February 1998
Boeing 737-724 704 28765 February 1998

SCHEDULE II to
Note Purchase Agreement

PASS THROUGH TRUST AGREEMENTS

Pass Through Trust Agreement, dated as of March 21, 1997, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee, made
with respect to the formation of Continental Airlines Pass Through Trust,
Series 1997-1A-0 and the issuance of 7.461% Continental Airlines Pass
Through Trust, Series 1997-1A-0 Pass Through Certificates representing
fractional undivided interests in the Trust

Pass Through Trust Agreement, dated as of March 21, 1997, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee, made
with respect to the formation of Continental Airlines Pass Through Trust,
Series 1997-1B-0 and the issuance of 7.461% Continental Airlines Pass
Through Trust, Series 1997-1B-0 Pass Through Certificates representing
fractional undivided interests in the Trust

Pass Through Trust Agreement, dated as of March 21, 1997, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee, made
with respect to the formation of Continental Airlines Pass Through Trust,
Series 1997-1C-I-0 and the issuance of 7.420% Continental Airlines Pass
Through Trust, Series 1997-1C-I-0 Pass Through Certificates representing
fractional undivided interests in the Trust

Pass Through Trust Agreement, dated as of March 21, 1997, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee, made
with respect to the formation of Continental Airlines Pass Through Trust,
Series 1997-1C-II-0 and the issuance of 7.420% Continental Airlines Pass
Through Trust, Series 1997-1C-II-0 Pass Through Certificates representing
fractional undivided interests in the Trust

SCHEDULE III to
Note Purchase Agreement

DEPOSIT AGREEMENTS

Deposit Agreement (Class A) dated as of March 21, 1997 between First
Security Bank, National Association as Escrow Agent under the Escrow and
Paying Agent Agreement, and Credit Suisse First Boston, New York Branch,
as Depositary

Deposit Agreement (Class B) dated as of March 21, 1997 between First
Security Bank, National Association as Escrow Agent under the Escrow and
Paying Agent Agreement, and Credit Suisse First Boston, New York Branch,
as Depositary

Deposit Agreement (Class C-I) dated as of March 21, 1997 between First
Security Bank, National Association as Escrow Agent under the Escrow and
Paying Agent Agreement, and Credit Suisse First Boston, New York Branch,
as Depositary

Deposit Agreement (Class C-II) dated as of March 21, 1997 between First
Security Bank, National Association as Escrow Agent under the Escrow and
Paying Agent Agreement, and Credit Suisse First Boston, New York Branch,
as Depositary

SCHEDULE IV to
Note Purchase Agreement

ESCROW AND PAYING AGENT AGREEMENTS

Escrow and Paying Agent Agreement (Class A) dated as of March 21, 1997
among First Security Bank, National Association as Escrow Agent; Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Chase
Securities Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., as Initial Purchasers under the
Certificate Purchase Agreement; Wilmington Trust Company, not in its
individual capacity, but solely as Pass Through Trustee for and on behalf
of Continental Airlines Pass Through Trust 1997-1A-0 as Pass Through
Trustee; and Wilmington Trust Company as Paying Agent

Escrow and Paying Agent Agreement (Class B) dated as of March 21, 1997
among First Security Bank, National Association as Escrow Agent; Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Chase
Securities Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., as Initial Purchasers under the
Certificate Purchase Agreement; Wilmington Trust Company, not in its
individual capacity, but solely as Pass Through Trustee for and on behalf
of Continental Airlines Pass Through Trust 1997-1B-0 as Pass Through
Trustee; and Wilmington Trust Company as Paying Agent

Escrow and Paying Agent Agreement (Class C-I) dated as of March 21, 1997
among First Security Bank, National Association as Escrow Agent; Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Chase
Securities Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., as Initial Purchasers under the
Certificate Purchase Agreement; Wilmington Trust Company, not in its
individual capacity, but solely as Pass Through Trustee for and on behalf
of Continental Airlines Pass Through Trust 1997-1C-I-0 as Pass Through
Trustee; and Wilmington Trust Company as Paying Agent

Escrow and Paying Agent Agreement (Class C-II) dated as of March 21, 1997
among First Security Bank, National Association as Escrow Agent; Credit
Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Chase
Securities Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., as Initial Purchasers under the
Certificate Purchase Agreement; Wilmington Trust Company, not in its
individual capacity, but solely as Pass Through Trustee for and on behalf
of Continental Airlines Pass Through Trust 1997-1C-II-0 as Pass Through
Trustee; and Wilmington Trust Company as Paying Agent

SCHEDULE V to
Note Purchase Agreement

MANDATORY DOCUMENT TERMS

1. May not modify in any material adverse respect the Granting Clause of the
Trust Indenture Form so as to deprive the Note Holders of a first priority
security interest in and mortgage lien on the Aircraft and the Lease or to
eliminate any of the obligations secured thereby or otherwise modify in
any material adverse respect as regards the interests of the Note Holders,
the Subordination Agent, the Liquidity Providers or the Mortgagee the
provisions of Article II or III or Section 4.02, 4.03, 4.04, 5.02, 5.06,
9.01(b), 10.04 or 10.12 of the Trust Indenture Form.

2. May not modify in any material adverse respect as regards the interests
of the Note Holders, the Subordination Agent, the Liquidity Providers or
the Mortgagee the provisions of Section 3.2.1(e), 3.3(c), 4.7, the final
sentence of 7.1.1, 10.3.1(d)(ii), 13.3, 16, 18.3 or 18.7(a) of the Lease
Form or otherwise modify the terms of the Lease Form so as to deprive the
Mortgagee of rights expressly granted to the "Mortgagee" therein.

3. May not modify in any material adverse respect as regards the interests
of the Note Holders, the Subordination Agent, the Liquidity Providers or
the Mortgagee the provisions of Section 5.1.9, 5.1.10, 5.1.11, 5.1.12,
7.5, 12, 15.8(a) or 15.9 of the Participation Agreement Form or of the
provisions of Section 5.1.2(xxiv) or 10.1.1(a)(iv) of the Participation
Agreement Form so as to eliminate the requirement to deliver to the Loan
Participant or the Mortgagee, as the case may be, the legal opinions to be
provided to such Persons thereunder (recognizing that the lawyers
rendering such opinions may be changed) or of the provisions of Section
7.6.11(ii) of the Participation Agreement Form as regards the rights of
the Mortgagee thereunder or otherwise modify the terms of the
Participation Agreement Form to deprive the Trustees, the Subordination
Agent, the Liquidity Providers or the Mortgagee of any indemnity or right
of reimbursement in its favor for Expenses or Taxes.

4. May not modify, in any material adverse respect as regards the interests
of the Note Holders, the Subordination Agent, the Liquidity Providers or
the Mortgagee, the definition of "Make Whole Amount" in Annex A to the
Note Purchase Agreement.

Notwithstanding the foregoing, any such Mandatory Document Term may be
modified to correct or supplement any such provision which may be
defective or to cure any ambiguity or correct any mistake, provided that
any such action shall not materially adversely affect the interests of the
Note Holders, the Subordination Agent, the Liquidity Providers, the
Mortgagee or the Certificateholders.

SCHEDULE VI to
Note Purchase Agreement

MANDATORY ECONOMIC TERMS

Equipment Notes

Obligor: Continental or an Owner Trust

Maximum Principal Amount:

For each Boeing 757-224 Aircraft $37,600,000

For each Boeing 737-524 Aircraft $18,400,000

For each Boeing 737-724 Aircraft $24,400,000

Aggregate Maximum Principal Amount:

For all Boeing 757-224 Aircraft $300,800,000

For all Boeing 737-524 Aircraft $331,200,000

For all Boeing 737-724 Aircraft $97,600,000

The aggregate original principal amount of all Equipment Notes for all Aircraft
shall not exceed the aggregate face amount of all Certificates issued on the
Issuance Date. The aggregate original principal amount of all Equipment Notes
of any series shall not exceed the aggregate face amount of all Certificates of
the related class issued on the Issuance Date.

Initial Loan to Aircraft Value (with the value of any Aircraft equal to the
value for such Aircraft set forth in the Offering Circular in "Offering
Circular Summary--The Offering--Equipment Notes and the Aircraft" under the
column "Appraised Value"):

Series A: not in excess of 41%

Series B: not in excess of 55%

Series C: For each Boeing 757-224 Aircraft: not in excess of
69.99%

For each Boeing 737-524 Aircraft: not in excess of 66.19%

For each Boeing 737-724 Aircraft: not in excess of 66.25%

Initial Average Life (in years)

For each Boeing 757-224 Aircraft

Series A: not less than 11.75 nor more than 12.60
years

Series B: not less than 9.00 nor more than 9.75 years

Series C: not less than 4.50 nor more than 5.55 years

For each Boeing 737-524 Aircraft

Series A: not less than 11.00 nor more than 12.55
years

Series B: not less than 6.90 nor more than 10.52 years

Series C: not less than 3.50 nor more than 7.60 years

For each Boeing 737-724 Aircraft

Series A: not less than 12.25 nor more than 12.55
years

Series B: not less than 9.75 nor more than 10.05 years

Series C: not less than 5.25 nor more than 5.55 years

Average Life (in years)

As of the Delivery Period Termination Date (or if earlier, the date of the
occurrence of a Triggering Event), the average life of the Class A
Certificates, the Class B Certificates, the Class C-I Certificates and the
Class C-II Certificates shall not exceed, respectively, 12.91 years, 10.15
years, 6.00 years and 6.00 years (computed without regard to the acceleration
of any Equipment Notes and after giving effect to any special distribution on
the Certificates thereafter required in respect of unused Deposits).

Amortization Schedule

The amortization schedule for each Series of Equipment Notes, assuming the
maximum amount thereof in respect of all of the Aircraft are purchased by the
Pass Through Trusts and all New

Aircraft are delivered as currently scheduled shall be as set forth in Schedule
VII of the Note Purchase Agreements.

Final Maturity Date

Series A: not in excess of 18.025 years from the date
of issuance of the Certificates (the "Date of
Issuance")

Series B: not in excess of 16.025 years from the Date
of Issuance

Series C: not in excess of 10.025 years from the Date
of Issuance

Debt Rate (computed on the basis of a 360-day year consisting of twelve 30-day
months, payable semi-annually in arrears)

Series A: 7.461%

Series B: 7.461%

Series C: 7.420%

Payment Due Rate: Debt Rate plus 2% per annum

Payment Dates: April 1 and October 1

Make-Whole Premiums: as provided in Article II of the form of
Trust Indenture marked as Exhibit A-3 or D-3
(whichever shall be utilized for a Leased
Aircraft) of the Note Purchase Agreement
(the "Trust Indenture Form")

Redemption and Purchase: as provided in Article II of the Trust
Indenture Form

Lease

Term: The Base Lease Term shall expire by its
terms on or after final maturity date of
the related Series A Equipment Notes

Lease Payment Dates: April 1 and October 1

Minimum Rent: Basic Rent due and payable on each Payment
Date shall be at least

sufficient to pay in full, as of such
Payment Date (assuming timely payment of
the related Equipment Notes prior to such
Date), the aggregate principal amount of
scheduled installments due on the related
Equipment Notes outstanding on such Payment
Date

Supplemental Rent: Sufficient to cover the sums described in
clauses (a) through (d) of such term as
defined in Annex A to the form of Lease
(the "Lease Form") marked as Exhibit A-2 or
D-2 (whichever shall be utilized for a
Leased Aircraft) of the Note Purchase
Agreement

Stipulated Loss Value: At all times equal to or greater than
the then outstanding principal amount of
the related Equipment Notes together with
accrued interest thereon

Termination Value: At all times equal to or greater than the
then outstanding principal amount of the
related Equipment Notes together with
accrued interest thereon

All-risk hull insurance: not less than Stipulated Loss Value, subject
to Lessee's right to self-insure on terms
no more favorable to Lessee in any material
respect than those set forth in Section G
of Annex D to the form of Lease marked as
Exhibit A-2.

Minimum Liability

Insurance Amount: as set forth in Schedule 1 to the form of
Lease marked as Exhibit A-2.

Payment Due Rate: as set forth in Schedule 1 to the form of
Lease marked as Exhibit A-2.

SLV Rate: as set forth in Schedule 1 to the form of
Lease marked as Exhibit A-2.

Participation Agreement

Mortgagee, Subordination Agent, Liquidity Providers, Pass Through Trustees,
Escrow Agents and Note Holders indemnified against Expenses and Taxes to the
extent set forth in Section 9 of the form of the Participation Agreement (the
"Participation Form") marked as Exhibit A-1 to the Note Purchase Agreement

SCHEDULE VII to
Note Purchase Agreement

AGGREGATE AMORTIZATION SCHEDULE

1997-1A Trust
Scheduled 1997-1B Trust 1997-1C-I Trust 1997-1C-II Trust
Date Payment Scheduled Payment Scheduled Payment Scheduled Payment
---- ------------- ----------------- ----------------- -----------------

[OMITTED]

ANNEX A to
Note Purchase Agreement
DEFINITIONS

"Act" means 49 U.S.C. Sections 40101-46507.

"Adjusted Treasury Yield" means, as of any date of determination, the sum of
the Treasury Yield plus 42 basis points.

"Affiliate" means, with respect to any person, any other person directly or
indirectly controlling, controlled by or under common control with such person.
For purposes of this definition, "control" means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities or by contract
or otherwise and "controlling," "controlled by" and "under common control with"
have correlative meanings.

"Aircraft Purchase Agreement" means, in the case of the Boeing 757-224
Aircraft, the Purchase Agreement No. 1783 dated March 18, 1993, or, in the case
of the Boeing 737-524 Aircraft and the Boeing 737-724 Aircraft, the Purchase
Agreement No. 1951 dated July 23, 1996, each between the Company and the
Manufacturer (including all exhibits thereto, together with all letter
agreements entered into that by their terms constitute part of any such
Purchase Agreement).

"Aircraft Purchase Agreement Assignment" means the CFM International Aircraft
Purchase Agreement Assignment or the Rolls-Royce Aircraft Purchase Agreement
Assignment.

"Assumed Amortization Schedule" means Schedule VII to the Note Purchase
Agreement.

"Average Life Date" means, for any Equipment Note, the date which follows the
time of determination by a period equal to the Remaining Weighted Average Life
of such Equipment Note.

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. Sections
102 et seq.

"Business Day" means any day, other than a Saturday, Sunday or other day on
which commercial banks are authorized or required by
37
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law to close in New York, New York, Houston, Texas, Wilmington, Delaware or
Salt Lake City, Utah.

"C-I Deposits" means the Deposits under the Deposit Agreement relating to the
Class C-I Certificates (as defined in the Intercreditor Agreement).

"C-I Pass Through Trust Agreement" means the Pass Through Trust Agreement
relating to the Pass Through Trust designated as 1997-1-I.

"C-II Deposits" means the Deposits under the Deposit Agreement relating to the
Class C-II Certificates (as defined in the Intercreditor Agreement).

"C-II Pass Through Trust Agreement" means the Pass Through Trust Agreement
relating to the Pass Through Trust designated as 1997-1C-II.

"C-II Trustee" means the Pass Through Trustee for the Pass Through Trust
designated as 1997-1C-II.

"Certificate" has the meaning set forth in the third recital to the Note
Purchase Agreement.

"Certificateholder" means the Person in whose name a Certificate is registered
in the Register.

"CFM International Aircraft Purchase Agreement Assignment" means a Purchase
Agreement and Engine Warranties Assignment substantially in the form of Exhibit
A-4-a to the Note Purchase Agreement.

"Class" means the class of Certificates issued by each Pass Through Trust.

"Class C-II Premium" means, as of any date of determination, with respect to
the distribution of unused Deposits to holders of Class C-II Certificates, (a)
if Equipment Notes with respect to all of New Aircraft (or Substitute Aircraft
in lieu thereof) have been purchased by the Pass Through Trusts prior to such
date of determination, an amount equal to the excess, if any, of (i) the
present value of the excess of (x) the scheduled payment of principal and
interest to maturity of the Equipment Notes on each remaining Regular
Distribution Date for the Class C-II Certificates under the Assumed
Amortization Schedule over (y) the
38
3

scheduled payment of principal and interest to maturity of the Equipment Notes
actually acquired by the Pass Through Trustee for such Class on each such
Regular Distribution Date, such present value computed by discounting such
excess on a semiannual basis on each Regular Distribution Date (assuming a 360-
day year of twelve 30-day months) using a discount rate equal to the Adjusted
Treasury Yield over (ii) the amount of such unused Deposits to be distributed
to the holders of such Certificates plus accrued and unpaid interest to but
excluding such date of determination from and including the preceding Regular
Distribution Date (or if such date of determination precedes the first Regular
Distribution Date, the Issuance Date), or (b) in any other case, an amount
equal to the sum of (i) a premium calculated pursuant to the preceding clause
(a) determined with respect to the portion of such unused Deposits that would
have remained unused had the maximum principal amount of the Series C Equipment
Notes been purchased with respect to each of the New Aircraft as to which such
Equipment Notes were not actually purchased by any of the Pass Through Trusts
and as to which no replacement by a Substitute Aircraft was made and (ii) the
Deposit Make-Whole Premium determined with respect to the balance of such
unused Deposits.

"Company" means Continental Airlines, Inc., a Delaware corporation.

"Corporate Trust Office" with respect to any Pass Through Trustee or any Loan
Trustee, means the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally administered.

"Cut-off Date" means the earlier of (a) the day after the Delivery Period
Termination Date and (b) the date on which a Triggering Event occurs.

"Delivery Period Termination Date" means the earlier of (a) March 31, 1998, or,
if the Equipment Notes relating to all of the New Aircraft (or Substitute
Aircraft in lieu thereof) have not been purchased by the Pass Through Trustees
on or prior to such date due to any reason beyond the control of the Company
and not occasioned by the Company's fault or negligence, June 30, 1998 and (b)
the date on which Equipment Notes issued with respect to all of the New
Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by the
Pass Through Trustees in accordance with the Note Purchase Agreement.
39
4

"Delivery Date" means the Business Day on which a New Aircraft is delivered to
and accepted by the Company.

"Deposit" has the meaning set forth in the fifth recital to the Note Purchase
Agreement.

"Deposit Agreement" has the meaning set forth in the fifth recital to the Note
Purchase Agreement.

"Deposit Make-Whole Premium" means, with respect to the distribution of unused
Deposits to holders of any Class of Certificates, as of any date of
determination, an amount equal to the excess, if any, of (a) the present value
of the excess of (i) the scheduled payment of principal and interest to
maturity of the Equipment Notes, assuming the maximum principal amount thereof
were issued, on each remaining Regular Distribution Date for such Class under
the Assumed Amortization Schedule over (ii) the scheduled payment of principal
and interest to maturity of the Equipment Notes actually acquired by the Pass
Through Trustee for such Class on each such Regular Distribution Date, such
present value computed by discounting such excess on a semiannual basis on each
Regular Distribution Date (assuming a 360-day year of twelve 30-day months)
using a discount rate equal to the Treasury Yield over (b) the amount of such
unused Deposits to be distributed to the holders of such Certificates plus
accrued and unpaid interest to but excluding such date of determination from
and including the preceding Regular Distribution Date (or if such date of
determination precedes the first Regular Distribution Date, the Issuance Date).

"Depositary" means Credit Suisse First Boston, New York Branch, a banking
institution organized under the laws of Switzerland.

"Equipment Notes" means and includes any equipment notes issued under any
Indenture in the form specified in Section 2.01 thereof (as such form may be
varied pursuant to the terms of such Indenture) and any Equipment Note issued
under any Indenture in exchange for or replacement of any other Equipment Note.

"Escrow Agent" has the meaning set forth in the first paragraph of the Note
Purchase Agreement.

"Escrow and Paying Agent Agreement" has the meaning set forth in the fifth
recital to the Note Purchase Agreement.
40
5

"FAA" means the Federal Aviation Administration of the United States.

"Final Withdrawal" with respect to each Escrow and Paying Agent Agreement, has
the meaning set forth in Section 1.02 thereof.

"Financing Agreements" means, collectively, the Lease Financing Agreements, the
Special Financing Agreements and the Owner Financing Agreements.

"Government Entity" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

"H.15(519)" means the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System.

"Indentures" means, collectively, the Leased Aircraft Indentures, the Special
Indentures and the Owned Aircraft Indentures.

"Initial Purchasers" has the meaning set forth in the fourth recital to the
Note Purchase Agreement.

"Intercreditor Agreement" has the meaning set forth in the ninth recital to the
Note Purchase Agreement.

"Issuance Date" means the date of the original issuance of the Certificates.

"Law" means (a) any constitution, treaty, statute, law, decree, regulation,
order, rule or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under, any of the
foregoing.

"Lease" means a Lease Agreement substantially in the form of Exhibit A-2 to the
Note Purchase Agreement.

"Lease Financing Agreements" means, collectively, the Aircraft Purchase
Agreement Assignment, the Leased Aircraft Participation
41
6

Agreement, the Lease, the Leased Aircraft Indenture, the Equipment Notes issued
thereunder and the Trust Agreement relating to the financing of a Leased
Aircraft.

"Leased Aircraft" means a New Aircraft subject to a Lease or Special Lease.

"Leased Aircraft Indenture" means a Trust Indenture and Mortgage substantially
in the form of Exhibit A-3 to the Note Purchase Agreement.

"Leased Aircraft Participation Agreement" means a Participation Agreement
substantially in the form of Exhibit A-1 to the Note Purchase Agreement.

"Liquidity Facility" has the meaning set forth in the ninth recital to the Note
Purchase Agreement.

"Liquidity Provider" has the meaning set forth in the ninth recital to the Note
Purchase Agreement.

"Loan Trustee" means (i) in the case of the Lease Financing Agreements, the
"Mortgagee" as defined therein, (ii) in the case of the Special Financing
Agreements, the "Loan Trustee" as defined therein and (iii) in the case of the
Owner Financing Agreements, the "Mortgagee" as defined therein.

"Mandatory Document Terms" means the terms set forth on Schedule V to the Note
Purchase Agreement.

"Mandatory Economic Terms" means the terms set forth on Schedule VI to the Note
Purchase Agreement.

"Manufacturer" means The Boeing Company, a Delaware corporation, solely in its
capacity as manufacturer or seller of New Aircraft.

"New Aircraft" has the meaning set forth in the second recital to the Note
Purchase Agreement.

"Note Purchase Agreement" means the Note Purchase Agreement to which this Annex
A is attached.

"Notice of Purchase Withdrawal" with respect to each Deposit Agreement, has the
meaning set forth in Section 2.3 thereof.

"Operative Agreements" means, collectively, the Pass Through Trust Agreements,
the Escrow and Paying Agent Agreements, the
42
7

Deposit Agreements, the Liquidity Facilities, the Intercreditor Agreement, the
Registration Rights Agreements, the Trust Agreements, the Equipment Notes, the
Certificates and the Financing Agreements.

"Owned Aircraft Indenture" means a Trust Indenture and Mortgage substantially
in the form of Exhibit C-2 to the Note Purchase Agreement.

"Owned Aircraft Participation Agreement" means a Participation Agreement
substantially in the form of Exhibit C-1 to the Note Purchase Agreement.

"Owner Financing Agreements" means, collectively, the Owned Aircraft
Participation Agreement, the Owned Aircraft Indenture and the Equipment Notes
issued thereunder.

"Owner Participant" means, with respect to any Leased Aircraft, the Person
named as the Owner Participant in the Participation Agreement with respect to
such Leased Aircraft.

"Owner Trust" means with respect to any Leased Aircraft, the trust created by
the "Trust Agreement" referred to in the Leased Aircraft Indenture or Special
Indenture related thereto.

"Owner Trustee" means with respect to any Leased Aircraft, the "Owner Trustee"
party to the "Trust Agreement" referred to in the Leased Aircraft Indenture or
Special Indenture related thereto.

"Participation Agreements" means, collectively, the Leased Aircraft
Participation Agreements, the Special Participation Agreements and the Owned
Aircraft Participation Agreements.

"Pass Through Trust" has the meaning set forth in the third recital to the Note
Purchase Agreement.

"Pass Through Trust Agreement" has the meaning set forth in the third recital
to the Note Purchase Agreement.

"Pass Through Trustee" has the meaning set forth in the first paragraph of the
Note Purchase Agreement.

"Paying Agent" has the meaning set forth in the first paragraph of the Note
Purchase Agreement.

"Person" means any individual, firm, partnership, joint venture, trust,
trustee, Government Entity, organization, association,
43
8

corporation, government agency, committee, department, authority and other
body, corporate or incorporate, whether having distinct legal status or not, or
any member of any of the same.

"Qualified Owner Participant" means any bank, trust company, insurance company,
financial institution or corporation (other than, without the Company's
consent, a commercial air carrier, a commercial aircraft operator, a freight
forwarder or Affiliate of any of the foregoing), in each case with a combined
capital and surplus or net worth of at least $50,000,000.

"Rating Agencies" means, collectively, at any time, each nationally recognized
rating agency which shall have been requested to rate the Certificates and
which shall then be rating the Certificates. The initial Rating Agencies will
be ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's Rating Group, a
division of ▇▇▇▇▇▇-▇▇▇▇ Inc.

"Rating Agency Confirmation" means, with respect to any Financing Agreement
that has been modified in any material respect from the forms thereof attached
to the Note Purchase Agreement or with respect to Substitute Aircraft, a
written confirmation from each of the Rating Agencies that the use of such
Financing Agreement with such modifications or the substituting of such
Substitute Aircraft for a New Aircraft, whichever of the foregoing shall in a
particular case require Rating Agency Confirmation, would not result in (i) a
reduction of the rating for any Class of Certificates below the then current
rating for such Class of Certificates or (ii) a withdrawal or suspension of the
rating of any Class of Certificates.

"Register" means the register maintained pursuant to Sections 3.04 and 7.12 of
each Pass Through Trust Agreement.

"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement dated as of the Issuance Date, among the Initial Purchasers, the Pass
Through Trustees and the Company, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.

"Regular Distribution Dates" shall mean April 1 and October 1 of each year,
commencing October 1, 1997.

"Remaining Weighted Average Life" means, on a given date with respect to any
Equipment Note, the number of days equal to the quotient obtained by dividing
(a) the sum of each of the products
44
9

obtained by multiplying (i) the amount of each then remaining scheduled payment
of principal of such Equipment Note by (ii) the number of days from and
including such determination date to but excluding the date on which such
payment of principal is scheduled to be made, by (b) the then outstanding
principal amount of such Equipment Note.

"Rolls-Royce Aircraft Purchase Agreement Assignment" means a Purchase Agreement
and Engine Warranties Assignment substantially in the form of Exhibit A-4-b to
the Note Purchase Agreement.

"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or any
successor or analogous Section of the federal bankruptcy Law in effect from
time to time.

"Series A Equipment Notes" means Equipment Notes issued under an Indenture and
designated as "Series A" thereunder.

"Series B Equipment Notes" means Equipment Notes issued under an Indenture and
designated as "Series B" thereunder.

"Series C Equipment Notes" means Equipment Notes issued under an Indenture and
designated as "Series C" thereunder.

"Special Financing Agreements" means, collectively, the Aircraft Purchase
Agreement Assignment, the Special Participation Agreement, the Special Lease,
the Special Indenture, the Equipment Notes issued thereunder and the Trust
Agreement relating to the financing of a Leased Aircraft.

"Special Indenture" means a Trust Indenture and Mortgage substantially in the
form of Exhibit D-3 to the Note Purchase Agreement.

"Special Lease" means a Lease Agreement substantially in the form of Exhibit D-
2 to the Note Purchase Agreement.

"Special Participation Agreement" means a Participation Agreement substantially
in the form of Exhibit D-1 to the Note Purchase Agreement.

"Subordination Agent" has the meaning set forth in the first paragraph of the
Note Purchase Agreement.

"Substitute Aircraft" has the meaning set forth in Section 1(g) of the Note
Purchase Agreement.
45
10

"Taxes" means all license, recording, documentary, registration and other
similar fees and all taxes, levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever imposed by any Taxing Authority, together
with any penalties, additions to tax, fines or interest thereon or additions
thereto.

"Taxing Authority" means any federal, state or local government or other taxing
authority in the United States, any foreign government or any political
subdivision or taxing authority thereof, any international taxing authority or
any territory or possession of the United States or any taxing authority
thereof.

"Treasury Yield" means, as of any date of determination, with respect to any
Equipment Note (utilizing the Assumed Amortization Schedule applicable
thereto), the interest rate (expressed as a decimal and, in the case of United
States Treasury bills, converted to a bond equivalent yield) determined to be
the per annum rate equal to the semi-annual yield to maturity for United States
Treasury securities maturing on the Average Life Date (of such Equipment Note)
and trading in the public securities markets either as determined by
interpolation between the most recent weekly average yield to maturity for two
series of United States Treasury securities, trading in the public securities
markets, (A) one maturing as close as possible to, but earlier than, the
Average Life Date (of such Equipment Note) and (B) the other maturing as close
as possible to, but later than, the Average Life Date (of such Equipment Note),
in each case as published in the most recent H.15(519) or, if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date (of such Equipment Note) is reported on the most recent H.15(519),
such weekly average yield to maturity as published in such H.15(519).

"Triggering Event" has the meaning assigned to such term in the Intercreditor
Agreement.

"Trust Agreement" means a Trust Agreement substantially in the form of Exhibit
E to the Note Purchase Agreement.

"WTC" has the meaning set forth in the first paragraph of the Note Purchase
Agreement.
46

EXHIBIT A-1 to
Note Purchase Agreement

FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT

--------------------------------------------------------------------------------
CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION
SET FORTH IN SECTION 8 OF THIS AGREEMENT
--------------------------------------------------------------------------------

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

PARTICIPATION AGREEMENT
Dated as of

Among

CONTINENTAL AIRLINES, INC.,
Lessee,

[ ],
Owner Participant,

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

Owner Trustee,
and

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

Mortgagee and Loan Participant
------------------------------

One Boeing Model ___________ Aircraft
Bearing Manufacturer's Serial No. ____

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

PARTICIPATION AGREEMENT BASE PAGE i

CONTENTS

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

SECTION 2. PARTICIPATION IN LESSOR'S COST; ISSUANCE
OF EQUIPMENT NOTES; TERMINATION OF
OBLIGATION TO PARTICIPATE ..........................................................3
2.1 Participation in Lessor's Cost .....................................................3
2.2 Nature of Obligations of Participants ..............................................3
2.3 Termination of Obligation to Participate ...........................................4

SECTION 3. COMMITMENT TO LEASE AIRCRAFT .......................................................4

SECTION 4. PROCEDURE FOR PARTICIPATION IN
PAYMENT OF LESSOR'S COST;
POSTPONEMENT OF SCHEDULED DELIVERY DATE ............................................4
4.1 Notices of Scheduled Delivery Date .................................................4
4.2 Payment of Lessor's Cost ...........................................................5
4.3 Postponement of Scheduled Delivery Date ............................................6
4.4 Closing ............................................................................7

SECTION 5. CONDITIONS PRECEDENT ...............................................................7
5.1 Conditions Precedent to Obligations of Participants ................................7
5.2 Conditions Precedent to Obligations
of Owner Trustee ...................................................................15
5.3 Conditions Precedent to Obligations
of Mortgagee .......................................................................15
5.4 Conditions Precedent to Obligations
of Lessee ..........................................................................16
5.5 Post-Registration Opinion ..........................................................17

SECTION 6. REPRESENTATIONS AND WARRANTIES .....................................................18
6.1 Lessee's Representations and
Warranties .........................................................................18
6.2 Owner Participant's Representations
and Warranties .....................................................................22
6.3 First Security's Representations and
Warranties .........................................................................25
6.4 WTC's Representations and Warranties ...............................................28

SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS .............................................32
7.1 Covenants of Lessee ................................................................32
7.2 Covenants of Owner Participant .....................................................34

PARTICIPATION AGREEMENT BASE PAGE ii

7.3 Covenants of First Security and Owner
Trustee ......................................................................................37
7.4 Covenants of WTC .............................................................................40
7.5 Covenants of Note Holders ....................................................................41
7.6 Agreements ...................................................................................42

SECTION 8. CONFIDENTIALITY ..............................................................................51

SECTION 9. INDEMNIFICATION AND EXPENSES .................................................................52
9.1 General Indemnity ............................................................................52
9.2 Expenses .....................................................................................59
9.3 General Tax Indemnity ........................................................................61
9.4 Payments .....................................................................................73
9.5 Interest .....................................................................................73
9.6 Benefit of Indemnities .......................................................................74

SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS ..........................................................74
10.1 Participants, Owner Trustee and Note
Holders ......................................................................................74
10.2 Effect of Transfer ...........................................................................76

SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS ..........................................................77
11.1 Refunding Generally ..........................................................................77
11.2 Limitations on Obligation to Refund ..........................................................79
11.3 Execution of Certain Documents ...............................................................80
11.4 ERISA ........................................................................................80
11.5 Consent to Optional Redemptions ..............................................................80

SECTION 12. SECTION 1110 .................................................................................81

SECTION 13. CHANGE OF CITIZENSHIP ........................................................................81
13.1 Generally ....................................................................................81
13.2 Owner Participant ............................................................................81
13.3 Owner Trustee ................................................................................82
13.4 Mortgagee ....................................................................................82

SECTION 14. CONCERNING OWNER TRUSTEE .....................................................................82

SECTION 15. MISCELLANEOUS ................................................................................83
15.1 Amendments ...................................................................................83
15.2 Severability .................................................................................83
15.3 Survival .....................................................................................84
15.4 Reproduction of Documents ....................................................................84
15.5 Counterparts .................................................................................84
15.6 No Waiver ....................................................................................85
15.7 Notices ......................................................................................85

PARTICIPATION AGREEMENT BASE PAGE iii

15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE ........................................................................................86
15.9 Third-Party Beneficiary ......................................................................87
15.10 Entire Agreement .............................................................................87
15.11 Further Assurances ...........................................................................87

ANNEX, SCHEDULES AND EXHIBITS

ANNEX A - Definitions

SCHEDULE 1 - Accounts; Addresses
SCHEDULE 2 - Commitments
SCHEDULE 3 - Certain Terms

EXHIBIT A - Opinion of special counsel to Lessee
EXHIBIT B - Opinion of corporate counsel to Lessee
EXHIBIT C - Opinion of corporate counsel to Airframe
Manufacturer
EXHIBIT D - Opinion of special counsel to Owner
Trustee
EXHIBIT E - Opinion of special counsel to Mortgagee
EXHIBIT F - Opinion of special counsel to Owner
Participant and Owner Participant Parent
EXHIBIT G - Opinion of corporate counsel to Owner
Participant and Owner Participant Parent
EXHIBIT H - Opinion of special counsel in Oklahoma
City, Oklahoma

PARTICIPATION AGREEMENT BASE PAGE iv

PARTICIPATION AGREEMENT
______

PARTICIPATION AGREEMENT ________ , dated as of __________ (this
"Agreement"), among (a) CONTINENTAL AIRLINES, INC., a Delaware corporation
("Lessee"), (b) [ ] ("Owner Participant"), (c) FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
except as expressly provided herein, but solely as Owner Trustee (this and all
other capitalized terms used but not defined herein shall have the respective
meanings ascribed thereto in Section 1) (in its capacity as Owner Trustee,
"Owner Trustee" or "Lessor," and in its individual capacity, "First Security"),
(d) WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity, except as expressly provided herein, but solely as
Mortgagee (in its capacity as Mortgagee, "Mortgagee" and in its individual
capacity, "WTC"), (e) WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided herein, but solely as Pass Through Trustee under
each of the Applicable Pass Through Trust Agreements, (each, an "Applicable
Pass Through Trustee") and (f) WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly provided herein, but solely as Subordination
Agent under the Intercreditor Agreement ("Subordination Agent").

RECITALS

A. Owner Participant and First Security, concurrently herewith, are
entering into the Trust Agreement, pursuant to which, among other things, Owner
Trustee agrees to hold the Trust Estate for the use and benefit of Owner
Participant upon and subject to the terms and conditions set forth therein.

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

C. On the Delivery Date, Lessee and Owner Trustee will enter into the
Purchase Agreement Assignment, pursuant to which, among other things, Lessee
will assign to Owner Trustee its right to purchase the Aircraft from Airframe
Manufacturer upon and subject to the terms and conditions set forth in the
Purchase Agreement and the Purchase Agreement Assignment.

PARTICIPATION AGREEMENT BASE PAGE 1

D. Pursuant to each of the Pass Through Trust Agreements, on the Issuance
Date the Pass Through Trusts were created and the Pass Through Certificates
were issued and sold.

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

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

G. On the Delivery Date, Lessor and Lessee will enter into the Lease,
pursuant to which, among other things, Lessor shall lease the Aircraft to
Lessee and Lessee shall lease the Aircraft from Lessor upon and subject to the
terms and conditions set forth therein.

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

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

SECTION 1. DEFINITIONS AND CONSTRUCTION

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

PARTICIPATION AGREEMENT BASE PAGE 2

SECTION 2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES;
TERMINATION OF OBLIGATION TO PARTICIPATE

2.1 Participation in Lessor's Cost

Subject to the terms and conditions of this Agreement, on the Delivery
Date, Owner Participant and each Applicable Pass Through Trustee shall
participate in the payment of Lessor's Cost as follows:

(b) Each Applicable Pass Through Trustee shall make a non-recourse
secured loan to Owner Trustee to finance, in part, the Owner
Trustee's payment of Lessor's Cost in the amount in Dollars equal
to such Pass Through Trustee's PTT Percentage multiplied by
Lessor's Cost, such loan to be evidenced by one or more Equipment
Notes, dated the Delivery Date, issued to the Subordination Agent
as the registered holder on behalf of each such Applicable Pass
Through Trustee for the related Applicable Pass Through Trust by
Owner Trustee in accordance with this Agreement and the Trust
Indenture, in an aggregate principal amount equal to the
Commitment of each such Applicable Pass Through Trustee.

2.2 Nature of Obligations of Participants

The obligations hereunder of each Participant are several, and not joint,
and a Participant shall have no obligation to make available to Owner Trustee
any portion of any amount not paid hereunder by any other Participant. The
failure by either Participant to perform its obligations hereunder shall not
affect the obligations of Lessee toward the other Participant, except to the
extent provided in Section 5.4.

2.3 Termination of Obligation to Participate

Notwithstanding any other provision of this Agreement, if the Closing does
not occur on or before the Commitment

PARTICIPATION AGREEMENT BASE PAGE 3

Termination Date, the Commitment of each Participant and its obligation to
participate in the payment of Lessor's Cost shall expire and be of no further
force and effect; provided, that the liability of any Participant that has
defaulted in the payment of its Commitment shall not be released.

SECTION 3. COMMITMENT TO LEASE AIRCRAFT

Subject to the terms and conditions of this Agreement, concurrently with
the issuance of the Equipment Notes on the Delivery Date, Owner Trustee shall
purchase and accept delivery of the Aircraft under and pursuant to the Purchase
Agreement and the Purchase Agreement Assignment, and thereupon Owner Trustee
shall lease the Aircraft to Lessee, and Lessee shall lease the Aircraft from
Owner Trustee, under the Lease.

SECTION 4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
POSTPONEMENT OF SCHEDULED DELIVERY DATE

4.1 Notices of Scheduled Delivery Date

Without limiting its obligations to the Loan Participant under Section 1(b)
of the Note Purchase Agreement, Lessee agrees to give Participants, Owner
Trustee, and Mortgagee at least one Business Day's written notice of the
Scheduled Delivery Date, which notice shall set forth Lessor's Cost and the
amount of each Participant's Commitment. Each Participant agrees that making
available its respective Commitment shall constitute a waiver of such notice.
Owner Trustee and Mortgagee shall be deemed to have waived such notice if
Mortgagee shall have received from each Participant funds in the full amount of
its respective Commitment.

4.2 Payment of Lessor's Cost

(a) Each Participant agrees, subject to the terms and conditions of this
Agreement, to make the Dollar amount of its respective Commitment available, by
wire transfer of immediately available funds to WTC's account no. ▇▇▇-▇-▇▇▇▇▇▇
at The Chase Manhattan Bank (National Association), New York, New York ABA#
▇▇▇▇▇▇▇▇▇ (contact: Emma Budget, tel. (718) ▇▇▇- ▇▇▇▇), reference Continental
Lease ___, at or before 12:00 Noon, New York City time, on the Scheduled
Delivery Date. All such funds made available by each Participant to WTC shall,
until payment thereof to Airframe Manufacturer and Lessee as provided in
Section 4.2(b)(ii) or return thereof to the respective

PARTICIPATION AGREEMENT BASE PAGE 4

Participant as provided in Section 4.3.2, be held by WTC in trust for the
benefit of the respective Participant, as the sole and exclusive property of
the respective Participant and not as part of the Trust Estate or the Trust
Indenture Estate.

(b) Subject to the satisfaction, or waiver by the applicable party, of the
conditions precedent set forth in Section 5, and simultaneously with the
receipt by the parties hereto of all amounts to be paid to them on the Delivery
Date pursuant to this Section 4.2, Owner Trustee shall:

(i) purchase, take title to, and accept delivery of,the Aircraft;

(ii) in consideration of the transfer of title to the Aircraft to
Owner Trustee, direct WTC to pay, from the funds made available to WTC
hereunder by the Participants, all or a specified portion of its
Commitment either to (A) Airframe Manufacturer, which payments in the
aggregate shall be equal to Manufacturer's Purchase Price, by wire
transfer of immediately available funds to Airframe Manufacturer's
account set forth in Schedule 1 and (B) Lessee, which payments in the
aggregate shall be equal to Lessor's Cost minus Manufacturer's Purchase
Price, by wire transfer of immediately available funds to Lessee's
account set forth in Schedule 1 or as otherwise directed by Lessee;

(iii) execute an application for registration of the Aircraft with
the FAA and Lease Supplement No. 1, in each case with respect to the
Aircraft;

(iv) execute the Trust Indenture and the initial Trust Indenture
Supplement and issue the Equipment Notes to the Subordination Agent in
accordance with Section 2.1(b);

(v) lease the Aircraft to Lessee, pursuant to the Lease; and

(vi) take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative
Agreement.

PARTICIPATION AGREEMENT BASE PAGE 5
56

4.3 Postponement of Scheduled Delivery Date

4.3.1 POSTPONEMENT

If for any reason whatsoever the Closing is not consummated on the
Scheduled Delivery Date, Lessee may, subject to the provisions of 1(e) of the
Note Purchase Agreement, by telephonic notice, given by 5:00 p.m., New York
City time (such telephonic notice to be promptly confirmed in writing by
personal delivery or facsimile), on the Scheduled Delivery Date to each
Participant, Owner Trustee and Mortgagee, designate a Delayed Delivery Date, in
which case the Owner Participant will keep its funds available, and the Loan
Participant shall comply with its obligations under Section 2.01 of each
applicable Pass Through Trust Agreement.

4.3.2 RETURN OF FUNDS

WTC shall promptly return to each Participant that makes funds available to
it in accordance with Section 4.2(a) such funds, together with interest or
income earned thereon, if the Closing fails to occur on the Scheduled Delivery
Date, provided that any funds made available by the Loan Participant shall be
returned on such Scheduled Delivery Date.

4.4 Closing

The Closing shall occur at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the
parties shall agree.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions Precedent to Obligations of Participants

The obligation of each Participant to make the Dollar amount of its
respective Commitment available for payment as directed by the Owner Trustee on
the Delivery Date is subject to satisfaction or waiver by each such
Participant, on or prior to the Delivery Date, of the conditions precedent set
forth below in this Section 5.1; provided, that it shall not be a condition
precedent to the obligation of any Participant that any document be produced or
action taken that is to be produced or taken by such Participant or by a Person
within such Participant's control; provided, further, that Sections 5.1.2(iii),
(xv) and (xxiii) (H) shall not be conditions precedent to the obligation of
Loan

PARTICIPATION AGREEMENT BASE PAGE 6
57

Participant and Sections 5.1.15 and 5.1.16 shall not be conditions precedent to
the obligation of Owner Participant.

5.1.1 NOTICE

Such Participant shall have received the notice described in Section 4.1
or, in the case of a Delayed Delivery Date, 4.3, when and as required thereby,
or shall have waived such notice.

5.1.2 DELIVERY OF DOCUMENTS

Such Participant shall, except as noted below, have received executed
counterparts of the following agreements, instruments, certificates or
documents, and such counterparts (a) shall have been duly authorized, executed
and delivered by the respective party or parties thereto, (b) shall be
reasonably satisfactory in form and substance to such Participant and (c) shall
be in full force and effect:

(i) the Lease; provided, that only Mortgagee shall receive the
sole executed chattel paper original thereof;

(ii) Lease Supplement No. 1; provided, that only Mortgagee shall
receive the sole executed chattel paper original thereof;

(iii) the Tax Indemnity Agreement; provided, that only Owner
Participant and Lessee shall receive copies of the Tax Indemnity Agreement;

(iv) the Trust Agreement;

(v) the Trust Indenture;

(vi) the initial Trust Indenture Supplement;

(vii) the Purchase Agreement Assignment;

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

(ix) the Equipment Notes dated the Delivery Date; provided, that
only the Subordination Agent shall receive the authenticated Equipment
Notes;

(x) an excerpted copy of the Purchase Agreement to the extent
relating to Airframe Manufacturer's or Engine

PARTICIPATION AGREEMENT BASE PAGE 7

Manufacturer's respective warranties or related obligations or any
right in the Purchase Agreement assigned to Owner Trustee pursuant to
the Purchase Agreement Assignment; provided, that only Owner Trustee
and Mortgagee shall receive copies of such agreements (copies of which
may be inspected by Participants and their respective special counsel
on the Delivery Date, but after the Delivery Date such copies shall be
retained by Owner Trustee and Mortgagee and may be inspected and
reviewed by Owner Participant or Loan Participant or their respective
counsel if and only if there shall have occurred and be continuing a
Lease Default or Lease Event of Default);

(xi) the Bills of Sale;

(xii) an invoice from Airframe Manufacturer to Owner Trustee in
respect of the Aircraft (except for the BFE) specifying the amount of
the Manufacturer's Purchase Price and an invoice from Lessee
specifying the amount due to Lessee in respect of the Aircraft and the
BFE, which amounts, in the aggregate, shall equal Lessor's Cost of the
Aircraft;

(xiii) an appointment of authorized representatives by
Owner Trustee, and an acceptance thereof by such representatives in
each case, dated the Delivery Date;

(xiv) the broker's report and insurance certificates
required by Section 11 of the Lease;

(xv) an appraisal or appraisals from an Appraiser, which
appraisal or appraisals shall be reasonably satisfactory in form and
substance to Owner Participant; provided, that only Owner Participant
and Lessee shall receive copies of such appraisal or appraisals;

PARTICIPATION AGREEMENT BASE PAGE 8
59

WTC, certified as of the Delivery Date by the Secretary or an
Assistant or Attesting Secretary of Owner Participant, First Security
and WTC, respectively, which authorize the execution, delivery and
performance by Owner Participant, First Security and WTC,
respectively, of each of the Operative Agreements to which it is a
party, together with such other documents and evidence with respect to
it as Lessee or any Participant may reasonably request in order to
establish the consummation of the transactions contemplated by this
Agreement and the taking of all corporate proceedings in connection
therewith;

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

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

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

(xx) an Officer's Certificate of WTC, dated as of the
Delivery Date, stating that its representations and warranties in its
individual capacity or as Mortgagee, a

PARTICIPATION AGREEMENT BASE PAGE 9

Pass Through Trustee or Subordination Agent, as the case may be, set
forth in this Agreement are true and correct as of the Delivery Date
(or, to the extent that any such representation and warranty expressly
relates to an earlier date, true and correct as of such earlier date);

(xxi) an application for registration of the Aircraft with
the FAA in the name of Owner Trustee; provided, that only special
counsel in Oklahoma City, Oklahoma shall receive the sole executed
copy thereof for filing with the FAA;

(xxii) the Financing Statements;

(xxiii) the following opinions of counsel, in each case
dated the Delivery Date:

(A) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to Lessee, substantially in the form of Exhibit A;

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

(D) an opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
counsel to Owner Trustee, substantially in the form of
Exhibit D;

(E) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special
counsel to Mortgagee, substantially in the form of Exhibit E;

(F) an opinion of ____________, special counsel to
Owner Participant, substantially in the form of Exhibit F;

(G) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special
counsel for the Loan Participant, substantially in the form
set forth in Exhibit G;

(H) an opinion of ___________, special tax counsel to
Owner Participant, with respect to certain

PARTICIPATION AGREEMENT BASE PAGE 10
61
tax consequences of the transactions contemplated hereby;
provided, that only Owner Participant shall receive such
opinion; and

(I) an opinion of ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel in Oklahoma City, Oklahoma, substantially in the form
of Exhibit H;

(xxiv) a copy of a current, valid Standard Certificate of
Airworthiness for the Aircraft duly issued by the FAA;

(xxv) the Participants and their respective counsel shall have
received copies of such documents and papers as such Participants may
reasonably request, other than (A) in the case of Loan Participant,
copies of the Purchase Agreement, provided that special counsel for
Loan Participant may inspect the Purchase Agreement in connection with
the transactions contemplated hereby or as a basis for such counsel's
closing opinion, and (B) in the case of parties other than Owner
Participant and its special counsel, the Tax Indemnity Agreement.

5.1.3 OTHER COMMITMENTS

Each other Participant shall have made available the Dollar amount of
its Commitment as directed by Owner Trustee in accordance with Section
4.

5.1.4 VIOLATION OF LAW

No change shall have occurred after the date of this Agreement in any
applicable Law that makes it a violation of Law for (a) Lessee, any
Participant, Subordination Agent, Owner Trustee or Mortgagee to execute,
deliver and perform the Operative Agreements to which any of them is a party or
(b) any Participant to make the Dollar amount of its Commitment available or,
in the case of any Loan Participant, to acquire an Equipment Note or to realize
the benefits of the security afforded by the Trust Indenture.

5.1.5 TAX LAW CHANGE

PARTICIPATION AGREEMENT BASE PAGE 11

Change in Tax Law and to advise Lessee and Loan Participant promptly
if Owner Participant determines that an Adverse Change in Tax Law
which has been enacted or promulgated or, if proposed, has a
substantial likelihood of becoming effective, would cause Owner
Participant to elect not to close with respect to the Aircraft. At any
time on or before the Delivery Date, Owner Participant may notify
Lessee and Loan Participant that Owner Participant elects not to close
as a result of the enactment, promulgation or issuance of any Adverse
Change in Tax Law on or before the Delivery Date, specifying such
Adverse Change in Tax Law; and failure to give such notice on or
before the Delivery Date shall preclude Owner Participant from not
closing with respect to such Aircraft as a result of any Adverse
Change in Tax Law.

5.1.6 REPRESENTATIONS, WARRANTIES AND COVENANTS

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

5.1.7 NO EVENT OF DEFAULT

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

5.1.8 NO EVENT OF LOSS

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

PARTICIPATION AGREEMENT BASE PAGE 12

5.1.9 TITLE

Owner Trustee shall have good title (subject to filing and recordation of
the FAA ▇▇▇▇ of Sale with the FAA) to the Aircraft, free and clear of Liens,
except (a) the rights of Lessee under the Lease and Lease Supplement No. 1, (b)
the Lien created by the Trust Indenture and the initial Trust Indenture
Supplement, (c) the beneficial interest of Owner Participant created by the
Trust Agreement, (d) Liens permitted by clause (d) (solely for taxes not yet
due) of Section 6 of the Lease and (e) Liens permitted by clause (e) of Section
6 of the Lease.

5.1.10 CERTIFICATION

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

5.1.11 SECTION 1110

Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee of
Owner Trustee under the Trust Indenture), shall be entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines as provided in the Lease in the event of
a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.

5.1.12 FILING

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

5.1.13 NO PROCEEDINGS

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

PARTICIPATION AGREEMENT BASE PAGE 13
64

5.1.14 GOVERNMENTAL ACTION

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

5.1.15 NOTE PURCHASE AGREEMENT

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

5.1.16 PERFECTED SECURITY INTEREST

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

5.2 Conditions Precedent to Obligations of Owner Trustee

The obligation of Owner Trustee to direct the Participants to apply the
Commitments to pay Lessor's Cost on the Delivery Date is subject to
satisfaction or waiver by Owner Trustee, on or prior to the Delivery Date, of
the conditions precedent set forth below in this Section 5.2.

5.2.1 NOTICE

Owner Trustee shall have received the notice described in Section 4.1 or,
in the case of a Delayed Delivery Date, 4.3, when and as required thereby, or
shall have waived such notice.

5.2.2 DOCUMENTS

Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Owner Trustee,
except as specifically provided

PARTICIPATION AGREEMENT BASE PAGE 14
65

therein, unless the failure to receive any such agreement, instrument,
certificate or document is the result of any action or inaction by Owner
Trustee.

5.2.3 OTHER CONDITIONS PRECEDENT

Each of the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and 5.1.11
shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Owner Trustee.

5.3 Conditions Precedent to Obligations of Mortgagee

The obligation of Mortgagee to authenticate the Equipment Notes on the
Delivery Date is subject to the satisfaction or waiver by Mortgagee, on or
prior to the Delivery Date, of the conditions precedent set forth below in this
Section 5.3.

5.3.1 NOTICE

Mortgagee shall have received the notice described in Section 4.1 or, in
the case of a Delayed Delivery Date, 4.3, when and as required thereby, or
shall have waived such notice.

5.3.2 DOCUMENTS

Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Mortgagee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Mortgagee.

5.3.3 OTHER CONDITIONS PRECEDENT

5.4 Conditions Precedent to Obligations of Lessee

The obligation of Lessee to lease the Aircraft on the Delivery Date is
subject to the satisfaction or waiver by Lessee, on or prior to the Delivery
Date, of the conditions precedent set forth below in this Section 5.4.

PARTICIPATION AGREEMENT BASE PAGE 15

5.4.1 DOCUMENTS

Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Lessee, except
as specifically provided therein, and shall be satisfactory to Lessee, unless
the failure to receive any such agreement, instrument, certificate or document
is the result of any action or inaction by Lessee.

5.4.2 SALES TAX

Lessee shall be satisfied that no sales, use, value added, goods and
services or like tax, and no stamp tax duty, is payable with respect to the
delivery of the Aircraft on the Delivery Date to the extent that Lessee has
liability therefor under Section 9.3.

5.4.3 OTHER CONDITIONS PRECEDENT

Each of the conditions set forth in Sections 5.1.3 (as to all
Participants), 5.1.4, 5.1.5, 5.1.6, 5.1.7 (as to Indenture Defaults or
Indenture Events of Default not constituting Lease Defaults or Lease Events of
Default, respectively), 5.1.8, 5.1.9, 5.1.10, 5.1.11, 5.1.12, 5.1.13 and 5.1.14
shall have been satisfied or waived by Lessee, unless the failure of any such
condition to be satisfied is the result of any action or inaction by Lessee.

5.4.4 TAX LAW CHANGE

No Adverse Change in Tax Law shall have been enacted, promulgated or
proposed on or prior to the Delivery Date. Lessee agrees to consider promptly,
and to consult with Owner Participant concerning, any such Adverse Change in
Tax Law and to advise Owner Participant and Loan Participant promptly if Lessee
determines that an Adverse Change in Tax Law which has been enacted or
promulgated or, if proposed, has a substantial likelihood of becoming
effective, would cause Lessee to elect not to close the transactions
contemplated by the Lease and this Agreement. At any time on or before the
Delivery Date, Lessee may notify Owner Participant and Loan Participant that
Lessee elects not to close the transactions contemplated by the Lease and this
Agreement as a result of the enactment, promulgation or proposal of any Adverse
Change in Tax Law on or before the Delivery Date, specifying such Adverse
Change in Tax Law.

PARTICIPATION AGREEMENT BASE PAGE 16
67

5.5 Post-Registration Opinion

Promptly upon the registration of the Aircraft and the recordation of the
FAA Filed Documents pursuant to the Act, Lessee will cause ▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel in Oklahoma City, Oklahoma, to deliver to Lessee, each
Participant, Owner Trustee and Mortgagee a favorable opinion or opinions
addressed to each of them with respect to such registration and recordation.

SECTION 6. REPRESENTATIONS AND WARRANTIES

6.1 Lessee's Representations and Warranties

Lessee represents and warrants to each Participant, Subordination Agent, Owner
Trustee and Mortgagee that:

6.1.1 ORGANIZATION; QUALIFICATION

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

6.1.2 CORPORATE AUTHORIZATION

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

6.1.3 NO VIOLATION

PARTICIPATION AGREEMENT BASE PAGE 17

(a) violate any provision of the Certificate of Incorporation or
By-Laws of Lessee, (b) violate any Law applicable to or binding on Lessee or
(c) violate or constitute any default under (other than any violation or
default that would not result in a Material Adverse Change to Lessee), or
result in the creation of any Lien (other than as permitted under the Lease)
upon the Aircraft under, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sales contract, lease, loan or other material agreement,
instrument or document to which Lessee is a party or by which Lessee or any of
its properties is bound.

6.1.4 APPROVALS

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

6.1.5 VALID AND BINDING AGREEMENTS

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

6.1.6 LITIGATION

Except as set forth in Lessee's most recent Annual Report on Form 10-K, as
amended, filed by Lessee with the SEC on or prior to the Delivery Date, or in
any Quarterly Report on Form 10-Q or

PARTICIPATION AGREEMENT BASE PAGE 18

Current Report on Form 8-K filed by Lessee with the SEC subsequent to such Form
10-K and on or prior to the Delivery Date, no action, claim or proceeding is
now pending or, to the Actual Knowledge of Lessee, threatened, against Lessee,
before any court, governmental body, arbitration board, tribunal or
administrative agency, which is reasonably likely to be determined adversely to
Lessee and if determined adversely to Lessee would result in a Material Adverse
Change.

6.1.7 FINANCIAL CONDITION

The audited consolidated balance sheet of Lessee with respect to Lessee's
most recent fiscal year included in Lessee's most recent Annual Report on Form
10-K, as amended, filed by Lessee with the SEC, and the related consolidated
statements of operations and cash flows for the period then ended have been
prepared in accordance with GAAP and fairly present in all material respects
the financial condition of Lessee and its consolidated subsidiaries as of such
date and the results of its operations and cash flows for such period, and
since the date of such balance sheet, there has been no material adverse change
in such financial condition or operations of Lessee, except for matters
disclosed in (a) the financial statements referred to above or (b) any
subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by
Lessee with the SEC on or prior to the date hereof.

6.1.8 REGISTRATION AND RECORDATION

Except for (a) the registration of the Aircraft with the FAA pursuant to
the Act in the name of Owner Trustee, (b) the filing for recordation (and
recordation) of the FAA Filed Documents, (c) the filing of the Financing
Statements (and continuation statements relating thereto at periodic
intervals), (d) the taking of possession and retention by Mortgagee of the
original counterparts of the Lease and Lease Supplement No. 1 and (e) the
affixation of the nameplates referred to in Section 7.1.3 of the Lease, no
further action, including any filing or recording of any document (including
any financing statement in respect thereof under Article 9 of the UCC) is
necessary in order to establish and perfect the right, title or interest of
Owner Trustee, and the Mortgagee's security interest, in the Aircraft and the
Lease, as against Lessee and any other Person, in each case, in any applicable
jurisdictions in the United States.

PARTICIPATION AGREEMENT BASE PAGE 19

6.1.9 CHIEF EXECUTIVE OFFICE

The chief executive office (as such term is defined in Article 9 of the
UCC) of Lessee is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.

6.1.10 NO DEFAULT

No event which, if the Aircraft were subject to the Lease, constitutes a
Lease Default or Lease Event of Default has occurred and is continuing.

6.1.11 NO EVENT OF LOSS

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

6.1.12 COMPLIANCE WITH LAWS

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

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

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

6.1.13 SECURITIES LAWS

Neither Lessee nor any person authorized to act on its behalf has directly
or indirectly offered any beneficial interest or Security relating to the
ownership of the Aircraft or the Lease or any interest in the Trust Estate and
Trust Agreement, or any of the Equipment Notes or any other interest in or
security under the Trust Indenture, for sale to, or solicited any offer to

PARTICIPATION AGREEMENT BASE PAGE 20

acquire any such interest or security from, or has sold any such interest or
security to, any person in violation of the Securities Act.

6.1.14 BROKER'S FEES

No Person acting on behalf of Lessee is or will be entitled to any broker's
fee, commission or finder's fee in connection with the Transactions, except for
fees payable to Lessee's Advisor, if any.

6.1.15 SECTION 1110

Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee under
the Trust Indenture), is entitled to the benefits of Section 1110 (as currently
in effect) with respect to the right to take possession of the Airframe and
Engines as provided in the Lease in the event of a case under Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor.

6.2 Owner Participant's Representations and Warranties

Owner Participant represents and warrants to Lessee, Loan Participant,
Subordination Agent, Owner Trustee and Mortgagee that:

6.2.1 ORGANIZATION, ETC.

Owner Participant is a corporation duly incorporated, validly existing and
in good standing under the Laws of the OP Jurisdiction, has the corporate power
and authority to conduct the business in which it is currently engaged and to
own or hold under lease its properties and to enter into, and perform its
obligations under the Owner Participant Agreements, and has a tangible net
worth (exclusive of goodwill) greater than $75,000,000.

6.2.2 CORPORATE AUTHORIZATION

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

PARTICIPATION AGREEMENT BASE PAGE 21
72

6.2.3 NO VIOLATION

The execution and delivery by Owner Participant of the Owner Participant
Agreements, the performance by Owner Participant of its obligations thereunder
and the consummation by Owner Participant on the Delivery Date of the
transactions contemplated thereby, do not and will not (a) violate any
provision of the Certificate of Incorporation or By-Laws of Owner Participant,
(b) violate any Law applicable to or binding on Owner Participant or (c)
violate or constitute any default under (other than any violation or default
that would not result in a Material Adverse Change to Owner Participant), or
result in the creation of any Lien (other than as provided for or otherwise
permitted in the Operative Agreements) upon the Trust Estate under, any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, lease, loan or other material agreement, instrument or document to
which Owner Participant is a party or by which Owner Participant or any of its
properties is bound.

6.2.4 APPROVALS

6.2.5 VALID AND BINDING AGREEMENTS

The Owner Participant Agreements have been duly authorized, executed and
delivered by Owner Participant and, assuming the due authorization, execution
and delivery by the other party or parties thereto, constitute the legal, valid
and binding obligations of Owner Participant and are enforceable against Owner
Participant in accordance with the respective terms thereof, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the rights of
creditors

PARTICIPATION AGREEMENT BASE PAGE 22
73

generally and general principles of equity, whether considered in a proceeding
at law or in equity.

6.2.6 CITIZENSHIP

On the Delivery Date, Owner Participant is a Citizen of the United States.

6.2.7 NO LIENS

On the Delivery Date, there are no Lessor Liens attributable to Owner
Participant in respect of all or any part of the Trust Estate.

6.2.8 INVESTMENT BY OWNER PARTICIPANT

Owner Participant's beneficial interest in the Trust Estate is being
acquired by it for its own account, for investment and not with a view to any
resale or distribution thereof, except that, subject to the restrictions on
transfer set forth in Section 10, the disposition by Owner Participant of its
beneficial interest in the Trust Estate shall at all times be within its
control.

6.2.9 ERISA

No part of the funds to be used by Owner Participant to acquire or hold its
interests in the Trust Estate to be acquired by it under this Agreement
directly or indirectly constitutes assets of a Plan.

6.2.10 LITIGATION

There are no pending or, to the Actual Knowledge of Owner Participant,
threatened actions or proceedings against Owner Participant before any court,
governmental body, arbitration board, administrative agency or tribunal which,
if determined adversely to Owner Participant, would materially adversely affect
the ability of Owner Participant to perform its obligations under the Owner
Participant Agreements.

6.2.11 SECURITIES LAWS

PARTICIPATION AGREEMENT BASE PAGE 23

any of the Equipment Notes or any other interest in or Security under the Trust
Indenture for sale to, or solicited any offer to acquire any of the same from,
any Person in violation of the Securities Act or applicable state securities
Laws.

6.2.12 BROKER'S FEES

No Person acting on behalf of Owner Participant is or will be entitled to
any broker's fee, commission or finder's fee in connection with the
Transactions.

6.3 First Security's Representations and Warranties

First Security represents and warrants to Lessee, Owner Participant, Loan
Participant, Subordination Agent and Mortgagee that:

6.3.1 ORGANIZATION, ETC.

First Security is a national banking association duly organized, validly
existing and in good standing under the Laws of the United States, holding a
valid certificate to do business as a national banking association with banking
authority to execute and deliver, and perform its obligations under, the Owner
Trustee Agreements.

6.3.2 CORPORATE AUTHORIZATION

First Security has taken, or caused to be taken, all necessary corporate
action (including, without limitation, the obtaining of any consent or approval
of stockholders required by Law or by its Articles of Association or By-Laws)
to authorize the execution and delivery by First Security, in its individual
capacity and as Owner Trustee, of each of the Owner Trustee Agreements, and the
performance of its obligations thereunder.

6.3.3 NO VIOLATION

PARTICIPATION AGREEMENT BASE PAGE 24

Security, (b) violate any Law applicable to or binding on Owner Trustee or
First Security or (c) violate or constitute any default under(other than any
violation or default that would not result in a Material Adverse Change to
First Security, in its individual capacity or as Owner Trustee), or result in
the creation of any Lien (other than the lien of the Trust Indenture) upon any
property of First Security, in its individual capacity and as Owner Trustee, or
any of its subsidiaries under, any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, lease, loan or other material agreement,
instrument or document to which First Security, in its individual capacity and
as Owner Trustee, is a party or by which First Security, in its individual
capacity and as Owner Trustee, or any of its properties is or may be bound or
affected.

6.3.4 APPROVALS

The execution and delivery by First Security, in its individual capacity
and as Owner Trustee, of the Owner Trustee Agreements, the performance by First
Security, in its individual capacity and as Owner Trustee, of its obligations
thereunder and the consummation by First Security, in its individual capacity
and as Owner Trustee, on the Delivery Date of the transactions contemplated
thereby do not and will not require the consent, approval or authorization of,
or the giving of notice to, or the registration with, or the recording or
filing of any documents with, or the taking of any other action in respect of,
(a) any trustee or other holder of any Debt of First Security or (b) any
Government Entity, other than the filing of the FAA Filed Documents and the
Financing Statements.

6.3.5 VALID AND BINDING AGREEMENTS

The Owner Trustee Agreements have been duly authorized, executed and
delivered by First Security, in its individual capacity or as Owner Trustee, as
the case may be, and constitute the legal, valid and binding obligations of
First Security, in its individual capacity and as Owner Trustee, and, assuming
the due authorization, execution and delivery thereof by the other party or
parties thereto, are enforceable against First Security, in its individual
capacity and as Owner Trustee, in accordance with the respective terms thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar Laws affecting the

PARTICIPATION AGREEMENT BASE PAGE 25

rights of creditors generally and general principles of equity, whether
considered in a proceeding at law or in equity.

6.3.6 CITIZENSHIP

On the Delivery Date, First Security is a Citizen of the United States.

6.3.7 CHIEF EXECUTIVE OFFICE

The chief executive office (as such term is defined in Article 9 of the
UCC) of Owner Trustee is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.

6.3.8 TITLE

On the Delivery Date, Owner Trustee shall have received whatever title (a)
to the Aircraft (other than the BFE) as was conveyed to it by Airframe
Manufacturer and (b) to the BFE as was conveyed to it by Lessee.

6.3.9 NO LIENS; FINANCING STATEMENTS

On the Delivery Date, there are no Lessor Liens attributable to First
Security or Owner Trustee in respect of all or any part of the Aircraft, Trust
Estate or the Trust Indenture Estate. Except for the Financing Statements, it
has not, either in its individual capacity or as Owner Trustee, executed any
UCC financing statements relating to the Aircraft or the Lease.

6.3.10 LITIGATION

There are no pending or, to the Actual Knowledge of First Security,
threatened actions or proceedings against First Security or Owner Trustee
before any court, governmental body, arbitration board, administrative agency
or tribunal which, if determined adversely to First Security, would materially
adversely affect the ability of First Security or Owner Trustee to perform its
obligations under the Owner Trustee Agreements.

6.3.11 SECURITIES LAWS

PARTICIPATION AGREEMENT BASE PAGE 26
77

sale to, or solicited any offer to acquire any such interest or security
from, or has sold any such interest or security to, any person other than the
Participants, except for the offering and sale of the Pass Through
Certificates.

6.3.12 EXPENSES AND TAXES

There are no Expenses or Taxes that may be imposed on or asserted against
the Trust, the Trust Estate or any part thereof or any interest therein, the
Trust Indenture Estate, Lessee, Owner Participant, any Applicable Pass Through
Trustee, Subordination Agent, Owner Trustee or Mortgagee (except as to Owner
Trustee, Taxes imposed on the fees payable to Owner Trustee) under the laws of
Utah in connection with the execution, delivery or
performance of any Operative Agreement by Owner Trustee or in connection with
the issuance of the Equipment Notes, which Expenses or Taxes would not have
been imposed if Owner Trustee had not (x) had its principal place of business
in, (y) performed (in its individual capacity or as Owner Trustee) any or all
of its duties under the Operative Agreements in or (z) engaged in any
activities unrelated to the transactions contemplated by the Operative
Agreements in, the State of Utah.

6.4 WTC's Representations and Warranties

WTC represents and warrants (with respect to Section 6.4.10, solely in its
capacity as Subordination Agent) to Lessee, Owner Participant and Owner Trustee
that:

6.4.1 ORGANIZATION, ETC.

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

6.4.2 CORPORATE AUTHORIZATION

PARTICIPATION AGREEMENT BASE PAGE 27
78

Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may
be, of the Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements and the performance of its obligations
thereunder.

6.4.3 NO VIOLATION

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

6.4.4 APPROVALS

PARTICIPATION AGREEMENT BASE PAGE 28

consummation on the Delivery Date by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
of the transactions contemplated thereby do not and will not require the
consent, approval or authorization of, or the giving of notice to, or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, (a) any trustee or other holder of
any Debt of WTC or (b) any Government Entity, other than the filing of the FAA
Filed Documents and the Financing Statements.

6.4.5 VALID AND BINDING AGREEMENTS

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

6.4.6 CITIZENSHIP

WTC is a Citizen of the United States.

6.4.7 NO LIENS

On the Delivery Date, there are no Lessor Liens attributable to WTC in
respect of all or any part of the Trust Estate or the Trust Indenture Estate.

6.4.8 LITIGATION

PARTICIPATION AGREEMENT BASE PAGE 29
80

Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
to perform its obligations under any of the Mortgagee Agreements, the Pass
Through Trustee Agreements or the Subordination Agent Agreements.

6.4.9 SECURITIES LAWS

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

6.4.10 INVESTMENT

The Equipment Notes to be acquired by the Subordination Agent are being
acquired by it for the account of the Applicable Pass Through Trustees, for
investment and not with a view to any resale or distribution thereof, except
that, subject to the restrictions on transfer set forth in Section 10.1.3, the
disposition by it of its Equipment Notes shall at all times be within its
control.

6.4.11 TAXES

PARTICIPATION AGREEMENT BASE PAGE 30

81
than franchise or other taxes based on or measured by any fees or compensation
received by any such Pass Through Trustee or WTC, as the case may be, for
services rendered in connection with the transactions contemplated by any of
the Pass Through Trust Agreements), and, assuming that the trusts created by
the Pass Through Trust Agreements will not be taxable as corporations, but,
rather, each will be characterized as a grantor trust under subpart E, Part I
of Subchapter J of the Code or as a partnership under Subchapter K of the Code,
such trusts will not be subject to any Taxes imposed by the State of Delaware
or any political subdivision thereof;

6.4.12 CONTROL

WTC is not an Affiliate of the Owner Participant or the Owner Trustee.

6.4.13 BROKER'S FEES

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

SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS

7.1 Covenants of Lessee

Lessee covenants and agrees, at its own cost and expense, with Owner
Participant, Loan Participant, Owner Trustee and Mortgagee as follows:

7.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER

Lessee shall at all times maintain its corporate existence, except as
permitted by Section 13.2 of the Lease, and shall at all times remain a U.S.
Air Carrier.

7.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

Lessee will give Owner Participant, Owner Trustee and Mortgagee timely
written notice (but in any event within 30 days prior to the expiration of the
period of time specified under applicable Law to prevent lapse of perfection)
of any relocation of its chief executive office (as such term is defined in
Article 9 of the UCC) from its then present location and will

PARTICIPATION AGREEMENT BASE PAGE 31

82
promptly take any action required by Section 7.1.3(c) as a result of such
relocation.

7.1.3 CERTAIN ASSURANCES

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

(b) Lessee shall promptly take such action with respect to the
recording, filing, re-recording and refiling of the Lease, the Trust Agreement
and the Trust Indenture and the respective supplements thereto, including,
without limitation, Lease Supplement No. 1 and the Trust Indenture Supplement,
as shall be necessary to establish, perfect and protect the interests and
rights of Owner Trustee in and to the Aircraft and under the Lease and the
perfection and priority of the Lien created by the Trust Indenture. Lessee
shall furnish to Owner Participant or Owner Trustee such information (other
than with respect to the citizenship of Owner Participant and Owner Trustee) in
Lessee's possession or otherwise reasonably available to Lessee as may be
required to enable Owner Participant or Owner Trustee to make application for
registration of the Aircraft under the Act (subject to Lessee's rights under
Section 7.1.2 of the Lease) and shall pay or cause to be paid all out-of-pocket
costs and expenses thereof (including, without limitation, reasonable
attorneys' fees and disbursements).

(c) Lessee, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any combination, consolidation or merger pursuant to
Section 13.2 of the Lease, or any relocation of its chief executive office) in
respect of the Financing Statements to be prepared and, subject only to the
execution and delivery thereof by Owner Trustee and Mortgagee, as applicable,
duly and timely filed and recorded, or filed for recordation, to the extent
permitted under the Act (with respect to the FAA Filed Documents) or the UCC or
similar

PARTICIPATION AGREEMENT BASE PAGE 32
83

law of any other applicable jurisdiction (with respect to such other
documents).

(d) If the Aircraft has been registered in a country other than the
United States pursuant to Section 7.1.2 of the Lease, Lessee will furnish to
Owner Trustee, Mortgagee and each Participant annually after such registration,
commencing with the calendar year after such registration is effected, an
opinion of special counsel reasonably satisfactory to Owner Trustee and
Mortgagee stating that, in the opinion of such counsel, either that (i) such
action has been taken with respect to the recording, filing, rerecording and
refiling of the Operative Agreements and any supplements and amendments thereto
as is necessary to establish, perfect and protect Owner Trustee's and
Mortgagee's respective right, title and interest in and to the Aircraft and the
Operative Agreements, reciting the details of such actions, or (ii) no such
action is necessary to maintain the perfection of such right, title and
interest.

7.1.4 SECURITIES LAWS

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

7.2 Covenants of Owner Participant

Owner Participant covenants and agrees with Lessee, and except with respect
to Section 7.2.4, Loan Participant, Owner Trustee and Mortgagee as follows:

7.2.1 LIENS

Owner Participant (a) will not directly or indirectly create, incur, assume
or suffer to exist any Lessor Lien attributable to it on or with respect to all
or any part of the Trust Estate, the Trust Indenture Estate or the Aircraft,
(b) will, at its own cost and expense, promptly take such action as may be
necessary to discharge any Lessor Lien attributable to Owner Participant on all
or any part of the Trust Estate, the

PARTICIPATION AGREEMENT BASE PAGE 33

Trust Indenture Estate or the Aircraft and (c) will hold harmless and indemnify
Lessee, Owner Trustee, each Note Holder, Mortgagee, each of their respective
Affiliates, successors and permitted assigns, the Trust Estate and the Trust
Indenture Estate from and against (i) any and all Expenses, (ii) any reduction
in the amount payable out of the Trust Estate or the Trust Indenture Estate and
(iii) any interference with the possession, operation or other use of all or
any part of the Aircraft imposed on, incurred by or asserted against any of the
foregoing as a consequence of any such Lessor Lien.

7.2.2 REVOCATION OF TRUST AGREEMENT

(a) Owner Participant will comply with the provisions of the Trust
Agreement applicable to it, and will not terminate or revoke the Trust
Agreement or the trusts created thereunder without the prior written consent of
Lessee and Mortgagee and will not amend, modify or supplement the Trust
Agreement, or waive any of the provisions thereof, if such amendment,
modification, supplement or waiver would have a material adverse effect on
Lessee, without the consent of Lessee, or on Mortgagee or any Note Holder,
without the consent of Mortgagee.

(b) Notwithstanding Section 7.2.2(a), Owner Participant may at any time
remove Owner Trustee pursuant to Section 9.1 of the Trust Agreement or
terminate the Trust Agreement pursuant to Section 11.2 of the Trust Agreement.

7.2.3 CHANGE OF SITUS OF OWNER TRUST

If, at any time, any Tax Indemnitee or the Trust Estate becomes subject to
any Taxes for which it is indemnified pursuant to Section 9.3 of this Agreement
and if, as a consequence thereof, Lessee should request that the situs of the
Trust be moved to another state in the United States from the state in which it
is then located, the situs of the Trust may be moved with the written consent
of Owner Participant (which consent shall not be unreasonably withheld) and
Owner Participant will take whatever action may be reasonably necessary to
accomplish such removal; provided, that, in any event, (a) Lessee shall provide
such additional tax indemnification as Owner Participant and the Note Holders
or the Pass Through Trustees may reasonably request to cover any additional
unindemnified Taxes or loss of Tax benefits described in the assumptions in the
Tax Indemnity Agreement resulting from such change in the situs of the Trust,

PARTICIPATION AGREEMENT BASE PAGE 34

(b) the rights and obligations under the Operative Agreements of Owner
Participant, the Note Holders, Pass Through Trustees and Mortgagee shall not be
adversely affected as a result of the taking of such action, (c) the Lien of
the Trust Indenture on the Trust Indenture Estate shall not be adversely
affected by such action, and Lessee and Owner Trustee shall execute and deliver
such documents as may reasonably be requested by Mortgagee to protect and
maintain the perfection and priority of such Lien, (d) Owner Participant, Pass
Through Trustees and Mortgagee shall have received an opinion or opinions of
counsel (which counsel is reasonably satisfactory to Owner Participant, Pass
Through Trustees and Mortgagee) in scope, form and substance reasonably
satisfactory to Owner Participant, Pass Through Trustees and Mortgagee to the
effect that (i) the Trust, as thus removed, shall remain a validly established
trust, (ii) any amendments to the Trust Agreement necessitated by such removal
shall have been duly authorized, executed and delivered by the parties thereto
and shall constitute the valid and binding obligations of such parties,
enforceable in accordance with their terms, (iii) covering such other matters
as Owner Participant, Pass Through Trustees or Mortgagee may reasonably
request, (e) if such removal involves the replacement of Owner Trustee, then
Owner Participant, Pass Through Trustees and Mortgagee shall have received an
opinion of counsel to such successor Owner Trustee in form and substance
reasonably satisfactory to Owner Participant, Pass Through Trustees and
Mortgagee covering the matters described in the opinion delivered pursuant to
Section 5.1.2(xxiii)(D) and (f) Lessee shall indemnify and hold harmless Owner
Participant, Note Holders, Pass Through Trustees and First Security, in its
individual capacity and as Owner Trustee, on a net after-tax basis against any
and all reasonable out-of-pocket costs and expenses including attorneys' fees
and disbursements, fees and expenses of any new owner trustee, registration,
recording or filing fees and taxes incurred by Owner Participant, Note Holders,
Pass Through Trustees or Owner Trustee in connection with such change of situs.
Owner Participant agrees with Lessee that it will not consent to or direct a
change in the situs of the Trust Estate without the prior written consent of
Lessee.

7.2.4 COMPLIANCE WITH LEASE PROVISIONS

Owner Participant will, solely for the benefit of Lessee, comply with the
express provisions applicable to it contained in the Lease.

PARTICIPATION AGREEMENT BASE PAGE 35

7.2.5 SECURITIES ACT

Owner Participant will not directly or indirectly offer any beneficial
interest or security relating to the ownership of the Aircraft or any interest
in the Trust Estate or any of the Equipment Notes or any other interest in or
security under the Trust Indenture for sale to, or solicit any offer to acquire
any such interest or security from, or sell any such interest or security to,
any Person in violation of the Securities Act or applicable state or foreign
securities Laws, provided that the foregoing shall not be deemed to impose on
Owner Participant any responsibility with respect to any such offer, sale or
solicitation by any other party hereto.

7.2.6 REGARDING THE OWNER TRUSTEE

Owner Participant will cause Owner Trustee to perform its obligations under
each Owner Trustee Agreement.

7.3 Covenants of First Security and Owner Trustee

First Security, in its individual capacity and/or as Owner Trustee, as
provided below, covenants and agrees with Lessee, Owner Participant, each Note
Holder and Mortgagee as follows:

7.3.1 LIENS

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

PARTICIPATION AGREEMENT BASE PAGE 36
87

7.3.2 OTHER BUSINESS

Owner Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.

7.3.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

First Security, in its individual capacity and as Owner Trustee, will give
Lessee, each Participant and Mortgagee 30 days' prior written notice of any
relocation of its chief executive office (as such term is defined in Article 9
of the UCC) from its then present location and will promptly take any action
required by Section 7.3.8 as a result of such relocation.

7.3.4 SECURITIES ACT

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

7.3.5 PERFORMANCE OF AGREEMENTS

Owner Trustee shall perform its obligations under the Owner Trustee
Agreements in accordance with the terms thereof.

7.3.6 RELEASE OF LIEN OF TRUST INDENTURE

Owner Trustee, in each instance referred to in the Lease in which a
transfer of any property is required to be made by Owner Trustee to Lessee or
any other Person (other than Mortgagee or Owner Participant), shall, at
Lessee's request and expense, use its reasonable efforts to procure from
Mortgagee the prompt release of the Lien of the Trust Indenture with respect to
such property.

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88

7.3.7 NOTICES; DOCUMENTS

In the event any claim with respect to any liabilities is filed against the
Owner Trustee in its capacity as such and Owner Trustee shall have Actual
Knowledge thereof, the Owner Trustee shall promptly notify Lessee in writing
thereof. Owner Trustee further agrees to provide to Lessee promptly any
documents (including the certificate of aircraft registration) that it receives
from the FAA with respect to the Aircraft.

7.3.8 FILINGS

After the Delivery Date, Owner Trustee shall duly execute and deliver to
Lessee all filings and recordings (including, without limitation, all filings
and UCC financing statements under the Act and the UCC and any amendments to
UCC financing statements necessitated by any relocation of its chief executive
office), prepared and delivered to it by Lessee required to perfect Owner
Trustee's title to the Aircraft and the liens of and security interests granted
by the Trust Indenture (or to maintain such perfection) and to make such title,
liens and security interests valid and enforceable.

7.3.9 TRUST AGREEMENT

Each of First Security and Owner Trustee hereby (i) agrees with Lessee,
Loan Participant and Mortgagee not to amend, supplement, terminate or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of any such party without the prior written consent of such
party and (ii) agrees with Lessee, Loan Participant and Mortgagee not to revoke
the trust created by the Trust Agreement so long as the Trust Indenture remains
undischarged or if such revocation would have an adverse effect on the Lessee.
Nothing contained in this Agreement shall impair any right under the Trust
Agreement of First Security to resign as Owner Trustee in accordance with the
provisions of the Trust Agreement.

7.4 Covenants of WTC

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

PARTICIPATION AGREEMENT BASE PAGE 38
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7.4.1 LIENS

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

7.4.2 SECURITIES ACT

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

7.4.3 PERFORMANCE OF AGREEMENTS

WTC, in its individual capacity and as Mortgagee, an Applicable Pass
Through Trustee or Subordination Agent, as the case may be, shall perform its
obligations under the Indenture Agreements, the Pass Through Trustee Agreements
and the Subordination Agent Agreements in accordance with the terms thereof.

PARTICIPATION AGREEMENT BASE PAGE 39

7.4.4 WITHHOLDING TAXES

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

7.5 Covenants of Note Holders

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

7.5.1 WITHHOLDING TAXES

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

7.5.2 TRANSFER; COMPLIANCE

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

PARTICIPATION AGREEMENT BASE PAGE 40

91
terms of Section 2.13 of the Trust Indenture or Section 11 hereof, each Note
Holder will not sell, assign, convey, exchange or otherwise transfer any
Equipment Note or any interest in, or represented by, any Equipment Note (it
being understood that this provision is not applicable to the Pass Through
Certificates) unless the proposed transferee thereof first provides Lessee and
Owner Participant with both of the following:

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

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

7.6 Agreements

7.6.1 OWNER TRUSTEE IS OWNER FOR ALL PURPOSES

Lessee, the Owner Participant and Owner Trustee agree that for all
purposes, after the Closing, Owner Trustee will be the owner of the Aircraft
(except that Owner Participant will be the owner for income tax purposes) and
Lessee will be the lessee thereof. No transfer, by operation of Law or
otherwise, of the beneficial interest of Owner Participant in and to the Trust
Estate shall operate to transfer legal title to any part of the Trust Estate to
any transferee thereof.

PARTICIPATION AGREEMENT BASE PAGE 41

7.6.2 COMMENCEMENT OF BANKRUPTCY PROCEEDINGS

Lessee, each Participant, each Note Holder, First Security, Owner Trustee,
WTC and Mortgagee agree for the benefit of each of the others that it will not
commence or join in any proceeding under the Bankruptcy Code to commence a case
under Section 303 of the Bankruptcy Code against the Trust Estate. Nothing
contained herein shall be deemed to preclude any Participant, any Note Holder,
First Security, Owner Trustee, WTC or Mortgagee from filing any claim against
the Trust Estate in any case commenced against the Trust Estate.

7.6.3 CERTAIN BANKRUPTCY MATTERS

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

For purposes of this Section 7.6.3, "Excess Amount" means the amount by
which such payment exceeds the amount that would have been received by a Note
Holder or Mortgagee if First Security or Owner Participant had not become
subject to the recourse liability referred to in clause (b) above. Nothing
contained in this Section 7.6.3 shall prevent a Note Holder or Mortgagee from
enforcing any personal recourse obligation (and retaining the proceeds thereof)
of First Security or Owner Participant under this Agreement (other than as
referred to in clause (b) above) or the Trust Indenture (and any exhibits or
annexes thereto) or from retaining any amount paid by Owner Participant under
Sections 2.13 or 4.03 of the Trust Indenture.

PARTICIPATION AGREEMENT BASE PAGE 42
93

7.6.4 QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING

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

(b) Any assignment, sale, transfer or other conveyance of the Aircraft by
Owner Trustee made pursuant to the terms of this Agreement or the Lease shall
bind Owner Participant and shall be effective to transfer or convey all right,
title and interest of Owner Trustee and Owner Participant in and to the
Aircraft. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance, or as to the application of any sale or other proceeds
with respect thereto by Owner Trustee, as regards Owner Participant.

7.6.5 RELEASE OF LIEN TRUST INDENTURE

Each of Lessee, Lessor and Mortgagee agrees that in each instance referred
to in the Lease in which a transfer of any property is required to be made by
Lessor to Lessee or any other Person (other than Mortgagee), Mortgagee shall,
upon request of Lessor and compliance with the applicable provisions of the
Lease and the Trust Indenture, including payment of all amounts then due and
payable to each Liquidity Provider as Supplemental Rent, promptly execute (at
Lessee's cost and expense) such instruments as Lessor or Lessee may reasonably
request to evidence the release of the Lien of the Trust Indenture with respect
to such property.

7.6.6 NON-RECOURSE

PARTICIPATION AGREEMENT BASE PAGE 43

Indenture and that neither Owner Participant nor First Security will be
personally liable to Loan Participant or Mortgagee for any amounts payable by
Owner Trustee under the Trust Indenture or any other Operative Agreement;
provided, however, that the foregoing is not intended nor shall it be construed
to limit any recourse liability of Owner Participant or First Security to the
extent that such liability is expressly set forth in this Agreement or in any
of the Operative Agreements or arises by reason of the breach of any
representation or warranty or covenant given by such Person (in the case of
First Security, in its individual capacity).

7.6.7 OTHER DOCUMENTS; AMENDMENT

(a) Each of the Owner Participant and the Owner Trustee hereby (A) agrees
with Lessee, the Loan Participant and the Mortgagee not to amend, supplement or
otherwise modify any provision of the Trust Agreement in a manner that could
adversely affect such party without the prior written consent of such party.
Notwithstanding the foregoing, so long as the Lease has not been terminated or
expired, each Participant, the Mortgagee and the Owner Trustee hereby agree for
the benefit of Lessee that without the consent of Lessee they will not amend,
supplement or otherwise modify (i) Article III, Article IX or Section 2.05 of
the Trust Indenture, (ii) any provision of any Operative Agreement that will
affect the stated principal amount of or premium or interest on the Equipment
Notes or (iii) any other provision of the Trust Indenture or Equipment Notes in
a manner that could adversely affect Lessee. Mortgagee and Owner Trustee agree
to promptly furnish to Lessee copies of any supplement, amendment, waiver or
modification of any of the Operative Agreements to which Lessee is not a party.
Loan Participant agrees that it will not take any action in respect of the
Trust Indenture Estate except through the Mortgagee pursuant to the Trust
Indenture or as otherwise permitted by Trust Indenture.

(b) Owner Trustee agrees to join with Lessee to the extent that action on
its part is necessary or appropriate (i) to cause the following to be duly
accomplished in accordance with applicable United States federal Law by the
time the Aircraft is delivered under this Agreement and the Lease: (A) the
application for registration of the Aircraft in the name of Owner Trustee and
(B) all related action necessary in order for Lessee to have temporary or
permanent authority to operate the Aircraft as contemplated by the Lease and
(ii) forthwith upon delivery of

PARTICIPATION AGREEMENT BASE PAGE 44

the Aircraft under this Agreement and the Lease, to cause all necessary
documents to be duly filed for recording in accordance with applicable United
States federal Law.

7.6.8 CONSENTS

Each Participant, each Applicable Pass Through Trustee, Subordination
Agent, Owner Trustee and Mortgagee covenants and agrees, for the benefit of
Lessee, that it shall not unreasonably withhold its consent to any consent or
approval requested of it or of Owner Trustee or Mortgagee under the terms of
any of the Operative Agreements which by its terms is not to be unreasonably
withheld.

7.6.9 INSURANCE

Each of Owner Participant, the Applicable Pass Through Trustees, the
Subordination Agent and the Owner Trustee agrees not to obtain or maintain
insurance for its own account as permitted by Section 11.2 of the Lease if such
insurance would limit or otherwise adversely affect the coverage of any
insurance required to be obtained or maintained by Lessee pursuant to Section
11 and Annex D of the Lease.

7.6.10 EXTENT OF INTEREST OF NOTE HOLDERS

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

7.6.11 FOREIGN REGISTRATION

Each Participant, Owner Trustee and Mortgagee hereby agree, for the benefit
of Lessee but subject to the provisions of Section 7.1.2 of the Lease:

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

(i) each of the following requirements is satisfied:

PARTICIPATION AGREEMENT BASE PAGE 45

(A) such registration shall be made only after the Tax
Attribute Period, unless Lessee prepays on a lump
sum basis any liability due under the Tax Indemnity
Agreement as a result of such registration based
upon the assumption that such registration would
continue for the remainder of the term of the
Permitted Sublease described in clause (C) below;

(B) no Lease Event of Default shall have occurred and
be continuing at the time of such registration;

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

(ii) the Owner Trustee and Mortgagee shall have received an
opinion of counsel (subject to customary exceptions) reasonably
satisfactory to the Owner Participant addressed to each such party as
to the effect that:

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

(B) the obligations of Lessee, and the rights and
remedies of Owner Trustee, under the Lease are valid, binding
and enforceable under the laws of such jurisdiction (or the
laws of the jurisdiction to which the laws of such
jurisdiction would refer as the applicable governing law);

(C) after giving effect to such change in
registration, the Lien of the Trust Indenture on the Owner
Trustee's right, title and interest in and to the Aircraft
and the Lease shall continue as a valid and duly perfected
first priority security interest and all filing, recording or
other action necessary to protect the same shall have been
accomplished (or, if such opinion cannot be given at the time
of such proposed change in registration because such change in

PARTICIPATION AGREEMENT BASE PAGE 46

registration is not yet effective, (1) the opinion shall
detail what filing, recording or other action is necessary
and (2) the Owner Trustee and the Mortgagee shall have
received a certificate from Lessee that all possible
preparations to accomplish such filing, recording and other
action shall have been done, and such filing, recording and
other action shall be accomplished and a supplemental opinion
to that effect shall be delivered to the Owner Trustee and
the Mortgagee on or prior to the effective date of such
change in registration;

(D) it is not necessary, solely as a consequence of
such change in registration and without giving effect to any
other activity of the Owner Trustee, the Owner Participant or
the Mortgagee (or any Affiliate thereof), as the case may be,
for the Owner Trustee, the Owner Participant or the Mortgagee
to qualify to do business in such jurisdiction as a result of
such reregistration in order to exercise any rights or
remedies with respect to the Aircraft pursuant to the Lease;

(E) there is no tort liability of the owner or
lessor of an aircraft not in possession thereof under the
laws of such jurisdiction (it being agreed that, in the event
such latter opinion cannot be given in a form satisfactory to
the Owner Participant, such opinion shall be waived if
insurance reasonably satisfactory to the Owner Participant is
provided to cover such risk); and

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

PARTICIPATION AGREEMENT BASE PAGE 47

(b) In addition, as a condition precedent to any change in
registration Lessee shall have given to Lessor and Mortgagee
assurances reasonably satisfactory to each of them:

(i) to the effect that the provisions of Section 11
of the Lease have been complied with after giving
effect to such change of registration;

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

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

7.6.12 OTHER COMMERCIAL RELATIONS UNAFFECTED

Notwithstanding anything to the contrary set forth in any Operative
Agreement: (a) Except as set forth in the Purchase Agreement Assignment,
nothing contained in the Operative Agreements shall constitute or be deemed to
be a waiver by Lessee of any rights, remedies or claims it may have against
Airframe Manufacturer or Engine Manufacturer or any subcontractor or supplier
of either;

PARTICIPATION AGREEMENT BASE PAGE 48
99

and the Operative Agreements do not and shall not be construed or deemed to
create any rights, waivers, immunities or indemnities in favor of Airframe
Manufacturer, Engine Manufacturer or any subcontractor or supplier of either
with respect to any such rights, remedies or claims of Lessee; and

(b) None of Airframe Manufacturer, by its execution and delivery of the
Consent and Agreement, and Engine Manufacturer, by its execution and delivery
of the Engine Consent and Agreement, shall be deemed to have waived any rights,
remedies or claims which Airframe Manufacturer or Engine Manufacturer (or any
subcontractor or supplier of either), as the case may be, may have against
Lessee; and the Operative Agreements do not and shall not be construed or
deemed to create any rights, waivers, immunities or indemnities in favor of
Lessee with respect to any such rights, remedies or claims of Airframe
Manufacturer or Engine Manufacturer (or any subcontractor or supplier of
either).

7.6.13 INTEREST IN CERTAIN ENGINES

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

SECTION 8. CONFIDENTIALITY

PARTICIPATION AGREEMENT BASE PAGE 49
100
counsel, independent insurance brokers, auditors, or other agents who agree to
hold such information confidential, (B) to Lessee's, Owner Participant's, a
Note Holder's, a Liquidity Provider's, a Pass Through Trustee's, Owner
Trustee's, Mortgagee's or other Indenture Indemnitee's counsel or special
counsel, independent insurance brokers, auditors, or other agents, Affiliates
or investors who agree to hold such information confidential, (C) as may be
required by any statute, court or administrative order or decree, legal process
or governmental ruling or regulation, including those of any applicable
insurance regulatory bodies (including, without limitation, the National
Association of Insurance Commissioners), federal or state banking examiners,
Internal Revenue Service auditors or any stock exchange, (D) with respect to
Lessee and Owner Participant, by mutual agreement of such parties, (E) with
respect to a Note Holder or any Pass Through Trustee, to a nationally
recognized rating agency for the purpose of obtaining a rating on the Equipment
Notes or the Pass Through Trust Certificates or to support an NAIC rating for
the Equipment Notes or (F) such other Persons as are reasonably deemed
necessary by the disclosing party in order to protect the interests of such
party or for the purposes of enforcing such documents by such party; provided,
that any and all disclosures permitted by clauses (C), (D), (E) or (F) above
shall be made only to the extent necessary to meet the specific requirements or
needs of the Persons making such disclosures.

SECTION 9. INDEMNIFICATION AND EXPENSES

9.1 General Indemnity

[INTENTIONALLY OMITTED]

PARTICIPATION AGREEMENT BASE PAGE 50
101
9.2.1 INVOICES AND PAYMENT

Each of the Owner Trustee, Mortgagee, the Owner Participant, Lessee, the
Applicable Pass Through Trustees, and the Subordination Agent shall promptly
submit to Lessee for its prompt approval (which shall not be unreasonably
withheld) copies of invoices in reasonable detail of the Transaction Expenses
for which it is responsible for providing information as they are received (but
in no event later than the 90th day after the Delivery Date). If so submitted
and approved, the Owner Participant agrees promptly, but in any event no later
than the 105th day after the Delivery Date, to pay (but not in excess of 2% of
Lessor's Cost) Transaction Expenses. Notwithstanding the foregoing, Lessee at
its sole option shall have the right to pay directly any and all Transaction
Expenses. Lessee shall be obligated to pay directly any and all Transaction
Expenses which are in excess of 2% of Lessor's Cost. If Owner Participant shall
fail to pay any Transaction Expense that it is obligated to pay hereunder,
Lessee shall pay such Transaction Expense. Any such payment by Lessee shall not
affect Owner Participant's obligations or Lessee's rights against Owner
Participant for its failure to make any such payment.

9.2.2 PAYMENT OF OTHER EXPENSES

PARTICIPATION AGREEMENT BASE PAGE 58
102

Engine contemplated by Section 4.5 of the Lease or (B) any waiver, amendment or
modification of any Operative Agreement to the extent requested by Lessee.

9.2.3 PAYMENTS IF TRANSACTIONS DO NOT CLOSE

In the event that the transaction contemplated by this Agreement fails to
close as a result of the Owner Participant's failure to comply with its
obligations under this Agreement or any breach of a representation or warranty
of Owner Participant made in or pursuant to any Operative Agreement,
notwithstanding any other rights and remedies that the parties hereto shall
have against Owner Participant, the Owner Participant will be responsible for
all of its fees and expenses, including but not limited to the fees, expenses
and disbursements of its special counsel and the fees of the Appraiser referred
to in Section 5.1.2(xv).

9.3 General Tax Indemnity

[INTENTIONALLY OMITTED]

PARTICIPATION AGREEMENT BASE PAGE 59
103

SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS

10.1 Participants, Owner Trustee and Note Holders

10.1.1 OWNER PARTICIPANT

(a) During the Term, Owner Participant shall not Transfer any or all of its
right, title or interest in the Trust Estate or the Trust Agreement and to this
Agreement unless:

(i) The Transferee shall have full power, authority and legal
right to execute and deliver and to perform the obligations of Owner
Participant under this Agreement and the other Owner Participant
Agreements and shall provide reasonably satisfactory evidence of such
power and authority to Lessee, Owner Trustee and Mortgagee;

PARTICIPATION AGREEMENT BASE PAGE 72
104

(ii) The Transferee shall enter into one or more legal, valid,
binding and enforceable agreements effective to confirm that such
Transferee agrees to be bound by all the terms of, and to undertake
all of the obligations arising after such transfer of, the
transferring Owner Participant contained in the Owner Participant
Agreements and in which it makes representations and warranties
substantially the same as those contained in Section 6.2 of the
Participation Agreement;

(iii) Lessee shall not be obligated to pay any greater amount or
incur any greater obligation than that which it would have been
obliged to pay or incur under the Lease or other Lessee Operative
Agreement if no transfer or assignment had taken place, and the terms
and conditions of this Lease and the other Lessee Operative Agreements
insofar as they relate to the rights and obligations of Lessee or the
Loan Participant shall not be altered;

(iv) Owner Participant shall deliver to Lessee, Owner Trustee and
Mortgagee an opinion of counsel reasonably satisfactory to each of
them to the effect that such agreement or agreements referred to in
Section 10.1.1(a)(ii) and, if applicable, 10.1.1(a)(vi) are legal,
binding and enforceable in accordance with its or their terms and that
such transfer will not violate applicable securities laws, the Act or
any other applicable law and is in accordance with this Section 10.1.1;

(v) The Transferee is a Citizen of the United States (it being
understood that the existence of any such requirement is to be
determined without giving consideration to Section 47.9 of the FAA
Regulations), or shall use a voting powers trust or similar
arrangement in order to hold an interest in the Trust Estate such that
the Aircraft can be registered in the United States (without giving
consideration to Section 47.9 of the FAA Regulations); and

(vi) The Transferee shall be a single person and shall be either
(A) a Permitted Institution or (B) any other person (other than,
without Lessee's consent, a commercial air carrier, a commercial
aircraft operator, a freight forwarder or an Affiliate of any of the
foregoing) the obligations of which under the Owner Participant
Agreements are guaranteed by a Permitted Institution in any case,

PARTICIPATION AGREEMENT BASE PAGE 73

105

pursuant to a written guaranty, in form and substance reasonably
satisfactory to Lessee, Owner Trustee and Mortgagee.

(b) Owner Participant shall give written notice to Lessee,
Mortgagee and Owner Trustee at least 10 days prior to any such Transfer,
specifying the name and address of the proposed Transferee, and providing
financial statements of the proposed Transferee evidencing satisfaction of the
requirements described in Section 10.1.1(a)(vi)(A) or (B) above.

(c) Any fees, charges and expenses, including the reasonable legal
fees, charges and expenses incurred by Lessee, Owner Participant, Mortgagee,
any Note Holder or Owner Trustee in connection with any Transfer by Owner
Participant permitted by this Section 10.1.1, or by the Transferee in any such
case, will be paid for by Owner Participant.

10.1.2 OWNER TRUSTEE

Owner Trustee may transfer its interests in the Trust Agreement pursuant to
Section 9 thereof.

10.1.3 NOTE HOLDERS

Subject to Section 7.5.2 hereof and Section 2.07 of the Trust Indenture,
any Note Holder may, at any time and from time to time, Transfer or grant
participations in all or any portion of the Equipment Notes and/or all or any
portion of its beneficial interest in its Equipment Notes and the Trust
Indenture Estate to any person (it being understood that the sale or issuance
of Pass Through Certificates by a Pass Through Trustee shall not be considered
a Transfer or participation); provided, that any participant in any such
participations shall not have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft or Trust Indenture Estate and
Lessee shall not have any increased liability or obligations as a result of any
such participation. In the case of any such Transfer, the Transferee, by
acceptance of Equipment Notes in connection with such Transfer, shall be deemed
to be bound by all of the covenants of Note Holders contained in the Operative
Agreements.

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106

10.2 Effect of Transfer

Upon any Transfer in accordance with Section 10.1.1, 10.1.2 or 10.1.3
(other than any Transfer by any Note Holder, to the extent it only grants
participations in Equipment Notes or in its beneficial interest therein),
Transferee shall be deemed an "Owner Participant," "Owner Trustee" or a "Note
Holder," respectively, for all purposes of this Agreement and the other
Operative Agreements and, in the case of a Transferee of any Participant or
Note Holder, shall be deemed to have paid its ratable portion of Lessor's Cost
previously made by Owner Participant or Loan Participant, respectively, making
such conveyance and represented by the interest being conveyed, and each
reference herein to Owner Participant, Owner Trustee or Note Holder,
respectively, shall thereafter be deemed a reference to such Transferee for all
purposes, and the transferring Owner Participant, Owner Trustee, Loan
Participant or Note Holder shall be released (except, in the case of Owner
Participant, to the extent of any guaranty provided by it under Section
10.1.1(a)(vi)) from all of its liabilities and obligations under this Agreement
and any other Operative Agreements to the extent such liabilities and
obligations arise after such Transfer and, in each case, to the extent such
liabilities and obligations are assumed by the transferee; provided, that such
transferring Owner Participant, Owner Trustee or Note Holder (and its
respective Affiliates, successors, assigns, agents, servants, representatives,
directors and officers) will continue to have the benefit of any rights or
indemnities under any Operative Agreement vested or relating to circumstances,
conditions, acts or events prior to such Transfer.

SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS

11.1 Refunding Generally

Subject to Sections 11.2 and 11.4, in the event that at any time Lessee
shall have given written notice to Owner Participant, Owner Trustee, and
Mortgagee that Lessee is requesting a voluntary redemption of all, but not less
than all, of the outstanding Equipment Notes (in compliance with the provisions
of Sections 2.11 and 2.12 of the Trust Indenture) by Owner Trustee as part of a
refunding transaction, Owner Participant agrees to negotiate in good faith and
promptly conclude an agreement with Lessee as to the terms of such refunding
transaction (including the terms of any debt to be issued in connection with
such

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refunding transaction and the documentation to be executed in connection
therewith), and after Lessee and Owner Participant shall have concluded such an
agreement:

11.1.1 REFUNDING CERTIFICATE

Within ten Business Days after reaching such agreement, Owner Participant
will deliver to Lessee a Refunding Certificate. Within ten Business Days of its
receipt of the Refunding Certificate, Lessee may demand a verification pursuant
to Section 3.2.1(d) of the Lease of the information set forth in the Refunding
Certificate. Upon the acceptance by Lessee of the accuracy of the information
set forth in the Refunding Certificate or the determination pursuant to such
verification procedures of the Refunding Information, the appropriate parties
will take the actions specified in Sections 11.1.2 through 11.1.7 below.

11.1.2 FINANCING AGREEMENTS

The appropriate parties will enter into appropriate documentation (which
may include an underwriting agreement or similar private placement agreement)
with the institution or institutions to be named therein providing for (a) the
issuance and sale by Owner Trustee to such institution or institutions on the
Refunding Date of the New Debt and (b) the application of the proceeds of the
sale of the New Debt to the redemption of all such Equipment Notes on the
Refunding Date. Lessee, acting on behalf of Owner Trustee, shall give Mortgagee
at least 30 days' revocable prior written notice of the proposed date of the
optional redemption.

11.1.3 LEASE AMENDMENTS

As a condition to the closing of the refunding transaction, Lessee and
Owner Trustee will amend the Lease, as contemplated by Section 3.2.1(b) of the
Lease, to provide that (a) Basic Rent in respect of the period from and after
the Refunding Date shall be as provided in the Refunding Information and (b)
amounts payable in respect of Stipulated Loss Value and Termination Value, from
and after the Refunding Date shall be as provided in the Refunding Information.

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108

11.1.4 SECURITY AGREEMENTS

Owner Trustee will enter into an agreement to provide for the securing
thereunder of the New Debt in like manner as the Equipment Notes and will enter
into such amendments and supplements to the Trust Indenture (or such new
indenture or other security agreement) and the other Operative Agreements as
may be necessary to effect such refunding).

11.1.5 EXPENSES

Whether or not such refunding transaction is consummated, Lessee shall pay
or reimburse all of the reasonable out-of-pocket expenses of all parties to
such refunding transaction, including, without limitation, any underwriting or
placement fees and the reasonable fees and expenses of such parties' counsel
and any related loan or commitment fees.

11.1.6 MAKE WHOLE AMOUNT

At the closing of such refunding, Owner Trustee shall pay, upon receipt of
the same from Lessee (which Lessee shall pay as Supplemental Rent as a
condition to the closing to the refunding transaction), to the Mortgagee for
the account of each Note Holder, the Make-Whole Amount, if any, payable to such
Note Holder under Section 2.11 of the Trust Indenture.

11.1.7 RETURN OF EQUIPMENT NOTES

Subject to compliance by Owner Trustee and Lessee with all applicable terms
and conditions for voluntary prepayment under the Trust Indenture and this
Agreement, each Note Holder will transfer to Owner Trustee the Equipment Notes
held by it for cancellation (and Owner Trustee shall cancel the same), against
receipt by such Note Holder of the then-outstanding principal amount of such
Equipment Notes, accrued and unpaid interest and Make-Whole Amount, if any,
thereon, together with payment in full of all other amounts then payable to
such Note Holder and Mortgagee hereunder or under the Trust Indenture.

11.2 Limitations on Obligation to Refund

Notwithstanding the foregoing, Owner Participant shall have no obligation
to proceed with any refunding transaction as contemplated by this Section 11:

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109

(a) If such transaction would have, or creates a material risk of, an
adverse tax consequence to Owner Participant unless Lessee agrees to indemnify
Owner Participant against such adverse tax consequence;

(b) Unless Lessee indemnifies Owner Participant for any liability,
obligation (other than the obligation to pay principal and interest and related
payments in respect of the New Debt), cost or expense (including, without
limitation, reasonable attorneys' fees) related to or arising out of any such
refunding transaction;

(d) If there shall have previously been consummated three refunding
transactions at Lessee's request pursuant to this Section 11.

11.3 Execution of Certain Documents

Lessee, Owner Participant, Owner Trustee and Mortgagee each agree to
execute any document necessary or advisable to implement this Section 11
(including, without limitation, the execution, delivery and/or provision of any
appropriate additional or modified amendment, representation, warranty,
certificate, opinion or other document that may reasonably be requested by
Lessee or any other person).

11.4 ERISA

Owner Participant shall not be obligated to conclude the proposed refunding
transaction unless the agreements utilized to effect such refunding contain an
agreement by the initial holders of the New Debt substantially the same as
Section 7.5.2(b) of this Agreement, except in the case of any refunding
transaction where the New Debt is sold in a public offering under the
Securities Act or a private placement intended for resale pursuant to Rule 144A
under the Securities Act, in which case the holders of the New Debt shall be
subject to the restrictions relating to ERISA substantially the same as those
applicable to the purchasers of the Pass Through Certificates, as described in
the Offering Circular relating to the initial issuance and sale of the Pass
Through Certificates.

PARTICIPATION AGREEMENT BASE PAGE 78
110

11.5 Consent to Optional Redemptions

Each of Owner Participant, Owner Trustee and Mortgagee agrees with Lessee
not to cause an optional redemption of the Equipment Notes without Lessee's
consent except as set forth in Section 2.13 of the Trust Indenture.

SECTION 12. SECTION 1110

It is the intention of each of Lessee, Owner Participant, Loan Participant,
the Note Holders (such intention being evidenced by each of their acceptance of
an Equipment Note), Owner Trustee and Mortgagee that Owner Trustee, as lessor
under the Lease (and Mortgagee as assignee of Owner Trustee under the Trust
Indenture), shall be entitled to the benefits of Section 1110 in the event of a
case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.

SECTION 13. CHANGE OF CITIZENSHIP

13.1 Generally

Without prejudice to the representations, warranties or covenants regarding
the status of any party hereto as a Citizen of the United States:

(a) Each of Lessee, First Security, WTC and Mortgagee agrees that it will,
immediately upon obtaining knowledge of any facts that would cast doubt upon
its continuing status as a Citizen of the United States and promptly upon
public disclosure of negotiations in respect of any transaction which would or
might adversely affect such status, notify in writing all parties hereto of all
relevant matters in connection therewith; and

(b) Owner Participant agrees that, in the event its status is to change or
has changed as a Citizen of the United States, or it makes public disclosure of
circumstances as a result of which it believes that such status is likely to
change, it will notify all the other parties to this Participation Agreement of
(i) such change in status promptly after obtaining Actual Knowledge thereof or
(ii) such belief as soon as practicable after such public disclosure but in any
event within ten Business Days after such public disclosure.

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111

13.2 Owner Participant

Owner Participant agrees, solely for the benefit of Lessee and the Note
Holders that if, during such time as the Aircraft is registered in the United
States, (a) it shall not be a Citizen of the United States and (b) the Aircraft
shall be, or would therefore become, ineligible for registration in the name of
Owner Trustee under the Act and regulations then applicable thereunder (without
giving consideration to Section 47.9 of the FAA Regulations or any other
provision that may restrict Lessee's use or operation of the Aircraft), then
Owner Participant shall as soon as is reasonably practicable, but in any event
within 30 days after obtaining Actual Knowledge of such ineligibility and of
such loss of citizenship, (y) effect voting trust or other similar arrangements
(in which case any provisions contained in the Operative Agreements restricting
Owner Participant's or Owner Trustee's ability to amend the Trust Agreement
shall not apply to the extent necessary to permit the use of such a voting
trust or other similar arrangement) or take any other action as may be
necessary to prevent any deregistration or maintain the United States
registration of the Aircraft or (z) transfer in accordance with the terms of
this Agreement all its right, title and interest in and to this Agreement, the
Trust Estate and the Trust Agreement in accordance with Section 10.1.

13.3 Owner Trustee

Upon First Security giving any notice in accordance with Section 13.1(a),
Owner Trustee shall, subject to Section 9.1.1 of the Trust Agreement, resign as
Owner Trustee. Upon its receipt of such notice, Owner Participant shall as
promptly as practicable appoint a Citizen of the United States as successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement.

13.4 Mortgagee

Upon WTC giving any notice in accordance with Section 13.1(a), Mortgagee
shall (if and so long as such citizenship is necessary under the Act as in
effect at such time or, if it is not necessary, if and so long as Mortgagee's
citizenship could have any adverse effect on Lessee, any Participant or any
Note Holder), subject to Section 8.02 of the Trust Indenture, resign as
Mortgagee promptly upon its ceasing to be such a citizen.

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112

SECTION 14. CONCERNING OWNER TRUSTEE

It is understood and agreed that, except as otherwise expressly provided
herein or in the Trust Agreement or the Trust Indenture, Owner Trustee is
entering into this Agreement solely in its capacity as trustee as provided in
the Trust Agreement and not in its individual capacity and in no case
whatsoever will it be liable or accountable in its individual capacity for any
of the statements, representations, warranties, agreements or obligations of
Owner Trustee hereunder, or for any loss in respect thereof, as to all of which
the parties agree to look solely to the Trust Estate; provided, that nothing in
this Section 14 shall be deemed to limit in scope or substance the personal
liability of First Security (a) to Owner Participant as expressly set forth in
the Trust Agreement, (b) in respect of the representations, warranties and
agreements of First Security expressly made as such herein or in any other
Operative Agreement to which it is a party, and (c) for the consequences of its
own gross negligence, willful misconduct, and, in receiving, handling or
remitting of funds only, its willful misconduct or simple negligence as a
trustee.

SECTION 15. MISCELLANEOUS

15.1 Amendments

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

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113
15.2 Severability

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

15.3 Survival

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

15.4 Reproduction of Documents

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

15.5 Counterparts

This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts

PARTICIPATION AGREEMENT BASE PAGE 82
114

(or upon separate signature pages bound together into one or more
counterparts), each of which when so executed shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute one
and the same instrument.

15.6 No Waiver

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

15.7 Notices

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

PARTICIPATION AGREEMENT BASE PAGE 83
115

given, furnished or filed (a) by facsimile or telecommunication transmission,
when confirmed, or (b) by registered or certified mail, three Business Days
after being deposited, properly addressed, with the U.S. Postal Service.

15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

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

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

(c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 15.7. EACH PARTY HERETO HEREBY AGREES
THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH
THIS SECTION 15.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE
UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF
ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT
IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY
JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.

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

(e) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN

PARTICIPATION AGREEMENT BASE PAGE 84
116

ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT.

15.9 Third-Party Beneficiary

This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than the Liquidity Provider, the Escrow Agent and the
Paying Agent, each of which is an intended third party beneficiary with respect
to the provisions of Section 9.1) with any rights of any nature whatsoever
against any of the parties hereto and no person not a party hereto (other than
the Liquidity Provider, the Escrow Agent and the Paying Agent, with respect to
the provisions of Section 9.1) shall have any right, power or privilege in
respect of any party hereto, or have any benefit or interest, arising out of
this Agreement.

15.10 Entire Agreement

15.11 Further Assurances

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

[This space intentionally left blank]

PARTICIPATION AGREEMENT BASE PAGE 85
117

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

CONTINENTAL AIRLINES, INC.,
Lessee

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

-------------------------------------
Owner Participant

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

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

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

118

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

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

WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided
herein, but solely as
Pass Through Trustee
under the Pass Through
Trust Agreement for the
Continental Airlines
Pass Through Trust,
1997-1A-0

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

119

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

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

By
---------------------------------
Name:
Title:
120
------------------------
ANNEX A - DEFINITIONS___
------------------------

ANNEX A

DEFINITIONS

GENERAL PROVISIONS

(a) In each Operative Agreement, unless otherwise expressly provided, a
reference to:

(i) each of "Lessee," "Lessor," "Loan Participant,"
"Owner Trustee," "Owner Participant," "Mortgagee," "Note Holder" or
any other person includes, without prejudice to the provisions of any
Operative Agreement, any successor in interest to it and any permitted
transferee, permitted purchaser or permitted assignee of it;

(ii) words importing the plural include the singular and
words importing the singular include the plural;

(iii) any agreement, instrument or document, or any annex,
schedule or exhibit thereto, or any other part thereof, includes,
without prejudice to the provisions of any Operative Agreement, that
agreement, instrument or document, or annex, schedule or exhibit, or
part, respectively, as amended, modified or supplemented from time to
time in accordance with its terms and in accordance with the Operative
Agreements, and any agreement, instrument or document entered into in
substitution or replacement therefor (including, without limitation,
in the case of each Pass Through Trust Agreement, the "Related Pass
Through Trust Agreement" as defined therein);

(iv) any provision of any Law includes any such provision
as amended, modified, supplemented, substituted, reissued or reenacted
prior to the Delivery Date, and thereafter from time to time;

(v) the words "Agreement," "this Agreement," "hereby,"
"herein," "hereto," "hereof" and "hereunder" and words of similar
import when used in any Operative Agreement refer to such Operative
Agreement as a whole and not to any particular provision of such
Operative Agreement;

ANNEX A BASE
121
2

(vi) the words "including," "including, without
limitation," "including, but not limited to," and terms or phrases of
similar import when used in any Operative Agreement, with respect to
any matter or thing, mean including, without limitation, such matter
or thing; and

(vii) a "Section," an "Exhibit," an "Annex" or a "Schedule"
in any Operative Agreement, or in any annex thereto, is a reference to
a section of, or an exhibit, an annex or a schedule to, such Operative
Agreement or such annex, respectively.

(b) Each exhibit, annex and schedule to each Operative Agreement
is incorporated in, and shall be deemed to be a part of, such Operative
Agreement.

(c) Unless otherwise defined or specified in any Operative
Agreement, all accounting terms therein shall be construed and all accounting
determinations thereunder shall be made in accordance with GAAP.

(d) Headings used in any Operative Agreement are for convenience
only and shall not in any way affect the construction of, or be taken into
consideration in interpreting, such Operative Agreement.

(e) For purposes of each Operative Agreement, the occurrence and
continuance of a Lease Default or Lease Event of Default referred to in Section
14.5 shall not be deemed to prohibit the Lessee from taking any action or
exercising any right that is conditioned on no Lease Event of Default, Lease
Default or Special Default having occurred and be continuing if such Lease
Default or Lease Event of Default consists of the institution of reorganization
proceedings with respect to Lessee under Chapter 11 of the Bankruptcy Code and
the trustee or debtor-in-possession in such proceedings shall have (i) agreed
to perform its obligations under the Lease with the approval of the applicable
court and thereafter shall have continued to perform such obligations in
accordance with Section 1110 or (ii) shall have assumed the Lease with the
approval of the relevant court and thereafter shall have continued to perform
its obligations under the Lease.

ANNEX A BASE

122
3
DEFINED TERMS

"Act" means part A of subtitle VII of title 49, United States Code.

"Actual Knowledge" means (a) as it applies to 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, respectively, and (b)
as it applies to Owner Participant or Lessee, actual knowledge of a Vice
President or more senior officer of Owner Participant or Lessee, respectively,
or any other officer of Owner Participant or Lessee, respectively, having
responsibility for the transactions contemplated by the Operative Agreements;
provided that each of Lessee, Owner Participant, Owner Trustee and Mortgagee
shall be deemed to have "Actual Knowledge" of any matter as to which it has
received notice from Lessee, Owner Participant, any Note Holder, Owner Trustee
or Mortgagee, such notice having been given pursuant to Section 15.7 of the
Participation Agreement.

"Additional Insured" is defined in Section D of Annex D to the Lease.

"Adverse Change in Tax Law" means (a) for Lessee, a Change in Tax Law
that Lessee regards as one that could adversely affect the economic
consequences of the transactions contemplated by the Participation Agreement
and the other Operative Agreements that are anticipated by Lessee or (b) for
Owner Participant, any Change in Tax Law that would adversely affect any of the
following tax assumptions:

(i) For federal income tax purposes, the Lease will be a
"true" lease for purposes of the Code and Owner Participant will be
treated as the owner of the Aircraft and Lessee will be treated as the
lessee thereof;

(ii) For federal income tax purposes, Owner Participant
will be entitled to depreciation or cost recovery deductions with
respect to Lessor' s Cost of the Aircraft; and

(iii) For federal income tax purposes, Owner Participant
will be entitled to deductions for interest payments on the Equipment
Notes.

ANNEX A BASE
123
4

"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.

"Aircraft" means, collectively, the Airframe and Engines.

"Aircraft ▇▇▇▇ of Sale" means the full warranty ▇▇▇▇ of sale covering
the Aircraft delivered by Airframe Manufacturer to Owner Trustee on the
Delivery Date.

"Aircraft Documents" means all technical data, manuals and log books,
and all inspection, modification and overhaul records and other service,
repair, maintenance and technical records that are required by the FAA (or the
relevant Aviation Authority), to be maintained with respect to the Aircraft,
Airframe, Engines or Parts; and such term shall include all additions,
renewals, revisions and replacements of any such materials from time to time
made, or required to be made, by the FAA (or other Aviation Authority)
regulations, and in each case in whatever form and by whatever means or medium
(including, without limitation, microfiche, microfilm, paper or computer disk)
such materials may be maintained or retained by or on behalf of Lessee
(provided, that all such materials shall be maintained in the English
language).

"Airframe" means (a) the aircraft (excluding Engines or engines from
time to time installed thereon) manufactured by Airframe Manufacturer and
identified by Airframe Manufacturer's model number, United States registration
number and Airframe Manufacturer's serial number set forth in Lease Supplement
No. 1 and any Replacement Airframe and (b) any and all Parts incorporated or
installed in or attached or appurtenant to such airframe, and any and all Parts
removed from such airframe, unless title to such Parts shall not be vested in
Lessor in accordance with Section 8.1 and Annex C of the Lease. Upon
substitution of a Replacement Airframe under and in accordance with the Lease,
such Replacement Airframe shall become subject to the Lease and shall be the
"Airframe" for all purposes of the Lease and the other Operative Agreements and
thereupon the Airframe for which the substitution is made shall no longer be
subject to the Lease, and such replaced Airframe shall cease to be the
"Airframe."

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

"Amortization Amount" means, with respect to any Equipment Note, as of
any Payment Date, the amount determined by multiplying the percentage set forth
opposite such Date on the Amortization Schedule by the Original Amount of such
Equipment Note.

"Amortization Schedule" means, with respect to each Equipment Note,
the amortization schedule for such Equipment Note delivered pursuant to Section
2.02 of the Trust Indenture.

"Applicable Pass Through Trust" means each of the separate pass
through trusts created under the Applicable Pass Through Trust Agreements.

"Applicable Pass Through Trust Agreement" means each of the separate
Pass Through Trust Agreements by and between the Lessee and an Applicable Pass
Through Trustee.

"Applicable Pass Through Trustee" means each Pass Through Trustee that
is a party to the Participation Agreement.

"Appraiser" means a firm of internationally recognized, independent
aircraft appraisers.

"Average Life Date" for any Equipment Note shall be the date which
follows the time of determination by a period equal to the Remaining Weighted
Average Life of such Equipment Note. "Remaining Weighted Average Life" on a
given date with respect to any Equipment Note shall be the number of days equal
to the quotient obtained by dividing (a) the sum of each of the products
obtained by multiplying (i) the amount of each then remaining scheduled payment
of principal of such Equipment Note by (ii) the number of days from and
including such determination date to but excluding the date on which such
payment of principal is scheduled to be made, by (b) the then outstanding
principal amount of such Equipment Note.

"Aviation Authority" means the FAA or, if the Aircraft is permitted to
be, and is, registered with any other Government Entity under and in accordance
with Section 7.1.2 of the Lease, such other Government Entity.

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"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.

"Base Lease Term" means the period beginning on and including the
Commencement Date and ending on the Scheduled Expiration Date, or such earlier
date on which the Term terminates in accordance with the provisions of the
Lease.

"Basic Rent" means the rent payable for the Aircraft pursuant to
Section 3.2.1(a) of the Lease.

"Beneficial Owner" when used in relation to an Equipment Note means a
Person that, by reason of direct ownership, contract, share ownership or
otherwise, has the right to receive or participate in receiving, directly or
indirectly, payments of principal, interest or Make-Whole Amount in respect of
such Equipment Note; provided that a Person shall not be deemed to be a
Beneficial Owner of an Equipment Note solely because another Person in which
such a Person owns common stock or other equity securities is a registered
holder or Beneficial Owner of such Equipment Note unless such Person is an
Affiliate of such other Person.

"BFE" means all appliances, parts, instruments, appurtenances,
accessories, furnishings or other equipment of whatever nature sold by Lessee
to Owner Trustee pursuant to the BFE ▇▇▇▇ of Sale.

"BFE Amount" means the amount paid by Owner Trustee to Lessee to
purchase the BFE, and is designated by Dollar amount in Schedule 3 to the
Participation Agreement.

"BFE ▇▇▇▇ of Sale" means the full warranty ▇▇▇▇ of sale executed by
Lessee in favor of Owner Trustee, dated the Delivery Date, identifying and
covering the BFE.

"Bills of Sale" means the FAA ▇▇▇▇ of Sale, the Aircraft ▇▇▇▇ of Sale
and the BFE ▇▇▇▇ of Sale.

"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York, Houston, Texas, Wilmington, Delaware, or Salt Lake City, Utah.

ANNEX A BASE

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"Cash Equivalents" means the following securities (which shall mature
within 90 days of the date of purchase thereof): (a) direct obligations of the
U.S. Government; (b) obligations fully guaranteed by the U.S. Government; (c)
certificates of deposit issued by, or bankers' acceptances of, or time deposits
or a deposit account with, Owner Trustee, Mortgagee or any bank, trust company
or national banking association incorporated or doing business under the laws
of the United States or any state thereof having a combined capital and surplus
and retained earnings of at least $500,000,000 and having a rate of "C" or
better from the Thomson BankWatch Service; or (d) commercial paper of any
issuer doing business under the laws of the United States or one of the states
thereof and in each case having a rating assigned to such commercial paper by
Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. equal to A1 or
higher.

"Change in Tax Law" means any amendment, modification, addition or
change in or to the provisions of the Code, any other federal tax statutes, the
Treasury Regulations promulgated thereunder, the Internal Revenue Service
Revenue Rulings, Revenue Procedures or other administrative or judicial
interpretations of the Code or the federal tax statutes that affects the tax
assumptions set forth in the Tax Indemnity Agreement or otherwise affects Owner
Participant's anticipated Net Economic Return (other than a change in the
alternative minimum tax or other change that results in Owner Participant being
subject to alternative minimum tax or unable to fully utilize tax benefits
because of its particular tax situation).

"Citizen of the United States" is defined in Section 40102(a)(15) of
the Act and in the FAA Regulations.

"Closing" means the closing of the transactions contemplated by the
Participation Agreement on the Delivery Date.

"Code" means the Internal Revenue Code of 1986, as amended; provided,
that when used in relation to a Plan, "Code" shall mean the Internal Revenue
Code of 1986 and any regulations and rulings issued thereunder, all as amended
and in effect from time to time.

"Commencement Date" is defined in Schedule 1 to the Lease.

ANNEX A BASE
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8

"Commitment" means, for any Participant, the amount of its
participation in the payment of Lessor's Cost.

"Commitment Termination Date" is defined in Schedule 3 to the
Participation Agreement.

"Consent and Agreement" means the Manufacturer Consent and Agreement
________, dated as of even date with the Participation Agreement, of Airframe
Manufacturer.

"Continuous Stay Period" is defined in Section 4.04(a) of the Trust
Indenture.

"Corporate Trust Department" or "Trust Office" means the principal
corporate trust office of Owner Trustee located from time to time at Owner
Trustee's address for notices under the Participation Agreement or such other
office at which Owner Trustee's corporate trust business shall be administered
which Owner Trustee shall have specified by notice in writing to Lessee,
Mortgagee and each Note Holder.

"Corporate Trust Office" means the principal office of Mortgagee
located at Mortgagee's address for notices under the Participation Agreement or
such other office at which Mortgagee's corporate trust business shall be
administered which Mortgagee shall have specified by notice in writing to
Lessee, Owner Trustee and each Note Holder.

"CRAF" means the Civil Reserve Air Fleet Program established pursuant
to 10 U.S.C. Section 9511-13 or any similar substitute program.

"Debt" means any liability for borrowed money, or any liability for
the payment of money in connection with any letter of credit transaction or any
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments.

"Debt Rate" means, with respect to (i) any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to
the Trust Indenture and (ii) any other purpose, with respect to any period, the
weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.

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

"Delayed Delivery Date" means a delayed Delivery Date notified to each
Participant, Owner Trustee and Mortgagee by Lessee pursuant to Section 4.3 of
the Participation Agreement, which delayed Delivery Date shall be a Business
Day not later than the Commitment Termination Date.

"Delivery Date" means the Business Day specified in Lease Supplement
No. 1 as the date on which, among other things, the Aircraft is delivered to
and accepted by Lessee under the Lease and the Closing occurs.

"Deposit Agreement" means each of the four Deposit Agreements between
the Depositary and the Escrow Agent, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, provided that, for purposes of
any obligation of Lessee, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Lessee.

"Depositary" means Credit Suisse First Boston, New York Branch, as
Depositary under each Deposit Agreement.

"Dollars," "United States Dollars" or "$" means the lawful currency of
the United States.

"DOT" means the Department of Transportation of the United States or
any Government Entity succeeding to the functions of such Department of
Transportation.

"Engine" means (a) each of the engines manufactured by Engine
Manufacturer and identified by Engine Manufacturer's model number and Engine
Manufacturer's serial number set forth in Lease Supplement No. 1 and originally
installed on the Airframe on delivery thereof pursuant to the Lease, and any
Replacement Engine, in any case whether or not from time to time installed on
such Airframe or installed on any other airframe or aircraft, and (b) any and
all Parts incorporated or installed in or attached or appurtenant to such
engine, and any and all Parts removed from such engine, unless title to such
Parts shall not be vested in Lessor in accordance with Section 8.1 and Annex C
of the Lease. Upon substitution of a Replacement Engine under and in accordance

ANNEX A BASE
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with the Lease, such Replacement Engine shall become subject to the Lease and
shall be an "Engine" for all purposes of the Lease and the other Operative
Agreements and thereupon the Engine for which the substitution is made shall no
longer be subject to the Lease, and such replaced Engine shall cease to be an
"Engine."

"Enforcement Date" is defined in Section 4.03 of the Trust Indenture.

"Engine Consent and Agreement" means the Engine Manufacturer Consent
and Agreement dated as of even date with the Participation Agreement, of Engine
Manufacturer.

"Engine Manufacturer" means [CFM INTERNATIONAL, A DELAWARE
CORPORATION.] [ROLLS-ROYCE PLC, A CORPORATION ORGANIZED UNDER THE LAWS OF
ENGLAND.]

"Equipment Note Register" is defined in Section 2.07 of the Trust
Indenture.

"Equipment Notes" means and includes any equipment notes issued under
the Trust Indenture in the form specified in Section 2.01 thereof (as such form
may be varied pursuant to the terms of the Trust Indenture) and any Equipment
Note issued under the Trust Indenture in exchange for or replacement of any
Equipment Note.

"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations and rulings issued thereunder all as amended and in effect from
time to time.

"Escrow Agent" means First Security Bank, National Association, as
Escrow Agent under each of the Escrow Agreements.

"Escrow Agreement" means each of the four Escrow and Paying Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial
purchasers of the Pass Through Certificates named therein and one of the Pass
Through Trustees, dated as of the Issuance Date, each of which relates to one
of the Pass Through Trusts, provided that, for purposes of any obligation of
Lessee, no amendment, modification or supplement to, or substitution or
replacement of, any such Escrow Agreement shall be effective unless consented
to by Lessee.

"Event of Default" is defined in Section 4.02 of the Trust Indenture.

ANNEX A BASE
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"Event of Loss" means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect
to such property, for any reason whatsoever:

(a) the destruction of such property, damage to such property
beyond economic repair or rendition of such property
permanently unfit for normal use by Lessee;

(b) the actual or constructive total loss of such property or any
damage to such property, or requisition of title or use of
such property, which results in an insurance settlement with
respect to such property on the basis of a total loss or
constructive or compromised total loss;

(d) any seizure, condemnation, confiscation, taking or requisition
(including loss of title) of such property by any Government
Entity or purported Government Entity (other than a
requisition of use by a Permitted Government Entity) for a
period exceeding 180 consecutive days or, if earlier, at the
end of the Term or, in the case of a requisition of title, the
requisition of title shall not have been reversed within 90
days from the date of such requisition of title or, if
earlier, at the end of the Term;

(e) any seizure, condemnation, confiscation, taking or requisition
of use of such property by any U.S. Government Entity that
continues until the 30th day after the last day of the Term,
provided that no such Event of Loss shall exist if Lessor
shall have elected not to treat such event as an Event of Loss
pursuant to Section 10.6 of the Lease; and

(f) as a result of any law, rule, regulation, order or other
action by the Aviation Authority or by any Government Entity
of the government of registry of the Aircraft or by any
Government Entity otherwise having jurisdiction over the
operation or use of the Aircraft, the use of such property in
the normal course of Lessee's business of passenger air
transportation is

ANNEX A BASE
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prohibited for a period of 180 consecutive days, unless
Lessee, prior to the expiration of such 180 day period, shall
have undertaken and shall be diligently carrying forward such
steps as may be 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 such prohibition has been applicable to Lessee's
entire U.S. fleet of such property and Lessee, prior to the
expiration of such two-year period, shall have conformed at
least one unit of such property 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 such property in
so conforming such property, steps which are necessary or
desirable to permit the normal use of the Aircraft by Lessee,
but in any event if such use shall have been prohibited for a
period of three years or such use shall be prohibited at the
expiration of the Term.

"Excluded Payments" means (i) indemnity payments paid or payable by
Lessee to or in respect of Owner Participant, or Owner Trustee in its
individual capacity, their respective Affiliates, successors and permitted
assigns and their directors, officers, employees, servants and agents pursuant
to Section 9 of the Participation Agreement or any corresponding payments under
the Lease, (ii) proceeds of public liability insurance paid or payable as a
result of insurance claims made, or losses suffered, by Owner Trustee in its
individual capacity or by Owner Participant, that are payable directly to Owner
Trustee in its individual capacity, or Owner Participant, respectively, for
their own account, (iii) proceeds of insurance maintained with respect to the
Aircraft by Owner Participant or any Affiliate thereof for its or their own
account or benefit (whether directly or through Owner Trustee) and permitted
under Section 11.2 of the Lease, (iv) all payments required to be made under
the Tax Indemnity Agreement by Lessee whether or not denominated as
Supplemental Rent, (v) any Transaction Expenses paid or payable by the Lessee
to the Owner Trustee (to the extent for its sole benefit) or the Owner
Participant pursuant to the Lease or the Participation Agreement, (vi) any
amount payable to the Owner

ANNEX A BASE
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Participant by any transferee as the purchase price of the Owner Participant's
interest in the Trust Estate, (vii) any interest that pursuant to the Operative
Agreements may from time to time accrue in respect of any of the amounts
described in clauses (i) through (vi) above, (viii) any right to enforce the
payment of any amount described in clauses (i) through (vii) above (provided,
that the rights referred to in this clause (viii) shall not be deemed to
include the exercise of any remedies provided for in the Lease other than the
right to ▇▇▇ for specific performance of any covenant to make such payment or
to ▇▇▇ for damages in respect of the breach of any such covenant) and (ix) any
right to exercise any election or option or make any decision or determination,
or to give or receive any notice, consent, waiver or approval, or to take any
other action in respect of, but in each case, only to the extent relating to,
any Excluded Payments.

"Expenses" means any and all liabilities, obligations, losses,
damages, settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).

"FAA" means the Federal Aviation Administration of the United States
or any Government Entity succeeding to the functions of such Federal Aviation
Administration.

"FAA ▇▇▇▇ of Sale" means a ▇▇▇▇ of sale for the Aircraft on AC Form
8050-2 (or such other form as may be approved by the FAA) delivered to Owner
Trustee on the Delivery Date by Airframe Manufacturer.

"FAA Filed Documents" means the Lease, Lease Supplement No. 1, the
Trust Indenture, the Trust Agreement, the Trust Indenture Supplement, the FAA
▇▇▇▇ of Sale and an application for registration of the Aircraft with the FAA
in the name of Owner Trustee.

"FAA Regulations" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.

"Fair Market Rental Value" means the fair market rental value in
Dollars for the Aircraft that would apply in an arm's-length transaction
between an informed and willing lessee under

ANNEX A BASE
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14

no compulsion to lease, and an informed and willing lessor under no compulsion
to lease, the Aircraft, for the applicable Renewal Lease Term, assuming that
(a) the Aircraft has been maintained in accordance with, and is in the
condition required by, the Lease, (b) payments of rent would be made
semiannually, and (c) the Aircraft would be leased during any such Renewal Term
on the same terms and conditions as are set forth in the Lease with respect to
the Base Lease Term.

"Fair Market Sales Value" means the fair market sales value in Dollars
for the Aircraft that would apply in an arm's-length transaction between an
informed and willing buyer under no compulsion to buy, and an informed and
willing seller under no compulsion to sell, the Aircraft, in a transaction that
would close on or about the relevant time of determination, assuming that (a)
the Aircraft has been maintained in accordance with, and is in the condition
required by, the Lease and (b) the Aircraft would be delivered to such informed
and willing buyer in the return condition required by the Lease.

"Financing Statements" means, collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements (a) covering the Trust Indenture
Estate, by Owner Trustee, as debtor, showing Mortgagee as secured party, for
filing in Utah and each other jurisdiction that, in the opinion of Mortgagee,
is necessary to perfect its Lien on the Trust Indenture Estate and (b) covering
the Lease and the Aircraft, as a precautionary matter, by Lessee, as lessee,
showing Owner Trustee as lessor and Mortgagee as assignee of Owner Trustee, for
filing in Texas and each other jurisdiction that, in the opinion of Owner
Trustee and Mortgagee, is reasonably desirable.

"First Security" means First Security Bank, National Association, a
national banking association, not in its capacity as Owner Trustee under the
Trust Agreement, but in its individual capacity.

"Fixed Renewal Lease Term" means each term for which the Lease is
extended by Lessee, if any, pursuant to the first and second such extensions in
accordance with Section 17 of the Lease.

"GAAP" means generally accepted accounting principles as set forth in
the statements of financial accounting standards issued by the Financial
Accounting Standards Board of the American

ANNEX A BASE
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15

Institute of Certified Public Accountants, as such principles may at any time
or from time to time be varied by any applicable financial accounting rules or
regulations issued by the SEC and, with respect to any person, shall mean such
principles applied on a basis consistent with prior periods except as may be
disclosed in such person's financial statements.

"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

"GTA" means the General Terms Agreement as defined in the Purchase
Agreement Assignment.

"Indemnitee" means (i) First Security and Owner Trustee, (ii) WTC and
Mortgagee, (iii) each separate or additional trustee appointed pursuant to the
Trust Agreement or the Trust Indenture, (iv) each Participant, (v) the Trust
Estate and the Trust Indenture Estate, (vi) the Subordination Agent, the Paying
Agent and the Escrow Agent, (vii) the Liquidity Providers, (viii) the Pass
Through Trustees, (ix) each Affiliate of the persons described in clauses (i)
through (iv), inclusive, (x) each Affiliate of the persons described in clauses
(vi), (vii) and (viii), (xi) the respective directors, officers, employees,
agents and servants of each of the persons described in clauses (i) through
(iv) inclusive and in clause (ix), (xii) the respective directors, officers,
employees, agents and servants of each of the persons described in clauses
(vi), (vii), (viii), and (x), (xiii) the successors and permitted assigns of
the persons described in clauses (i) through (iv), inclusive, and in clauses
(ix) and (xi), and (xiv) the successors and permitted assigns of the persons
described in clauses (vi), (vii), (viii), (x) and (xii); provided that the
persons described in clauses (vi), (vii), (viii), (x), (xii) and (xiv) are
Indemnitees only for purposes of Section 9.1 of the Participation Agreement. If
any Indemnitee is Airframe Manufacturer or Engine Manufacturer or any
subcontractor or supplier of either thereof, such Person shall be

ANNEX A BASE
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an Indemnitee only in its capacity as Owner Participant, Loan Participant or
Note Holder.

"Indenture Agreements" means the Participation Agreement, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Engine Consent and Agreement, the Bills of Sale and any other
contract, agreement or instrument from time to time assigned or pledged under
the Trust Indenture.

"Indenture Default" means any condition, circumstance, act or event
that, with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.

"Indenture Event of Default" means any one or more of the conditions,
circumstances, acts or events set forth in Section 4.02 of the Trust Indenture.

"Indenture Indemnitee" means (i) WTC and the Mortgagee, (ii) each
separate or additional trustee appointed pursuant to the Trust Indenture, (iii)
the Subordination Agent, (iv) each Liquidity Provider, (v) each Pass Through
Trustee, (vi) the Paying Agent, (vii) the Escrow Agent and (viii) each of the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i) through (vii) inclusive above.

"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Pass Through Trustees, the Liquidity Providers and the Subordination
Agent, dated as of the Issuance Date, provided that, for purposes of any
obligation of Lessee, no amendment, modification or supplement to, or
substitution or replacement of, such Intercreditor Agreement shall be effective
unless consented to by Lessee.

"Interim Lease Term" means the period commencing on and including the
Delivery Date, and ending on and including the day immediately preceding the
Commencement Date or such earlier date on which the Term terminates in
accordance with the provisions of the Lease.

"Interim Rent" is defined in Schedule 1 to the Lease.

ANNEX A BASE
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17

"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.

"Issuance Date" means March 21, 1997.

"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.

"Lease" or "Lease Agreement" means the Lease Agreement , dated as of
even date with the Participation Agreement, between Owner Trustee and Lessee.

"Lease Default" means any condition, circumstance, act or event that,
with the giving of notice, the lapse of time or both, would constitute a Lease
Event of Default.

"Lease Event of Default" means any one or more of the conditions,
circumstances, acts or events set forth in Section 14 of the Lease.

"Lease Supplement" means a supplement to the Lease, in the form of
Exhibit A to the Lease.

"Lease Supplement No. 1" means the initial Lease Supplement, dated the
Delivery Date.

"Lessee" means Continental Airlines, Inc., a Delaware corporation.

"Lessee Operative Agreements" means the Participation Agreement, the
Lease, Lease Supplement No. 1, the Tax Indemnity Agreement, the BFE ▇▇▇▇ of
Sale, the Purchase Agreement Assignment and each other agreement between Lessee
and any other party to the Participation Agreement, relating to the
Transactions, delivered on the Delivery Date.

"Lessee Person" means Lessee, any sublessee, assignee, successor or
other user or person in possession of the Aircraft, Airframe or an Engine with
or without color of right, or any Affiliate of any of the foregoing (excluding
any Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any
person using or claiming any rights with respect to the Aircraft, Airframe or
an Engine directly by or through any of the persons

ANNEX A BASE
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18

in this parenthetical, but not excluding any Person claiming directly or
indirectly through or under the Lease).

"Lessee's Advisor" is defined in Schedule 3 to the Participation
Agreement.

"Lessor" means Owner Trustee in its capacity as lessor under the
Lease.

"Lessor's Cost" means the aggregate of the amounts paid by Owner
Trustee to Airframe Manufacturer and Lessee to purchase the Aircraft and BFE
pursuant to the Purchase Agreement Assignment and the Participation Agreement,
and is designated by Dollar amount in Schedule 3 to the Participation
Agreement.

"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease or security interest affecting the title to or any interest in property.

"Liquidity Facilities" means the eight Revolving Credit Agreements
(consisting of a separate Revolving Credit Agreement

ANNEX A BASE
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19

with each Liquidity Provider with respect to each Pass Through Trust) between
the Subordination Agent, as borrower, and a Liquidity Provider, each dated as
of the Issuance Date, provided that, for purposes of any obligation of Lessee,
no amendment, modification or supplement to, or substitution or replacement of,
any such Liquidity Facility shall be effective unless consented to by Lessee.

"Liquidity Provider" means ABN AMRO Bank N.V., acting through its
Chicago branch, or ING Bank N.V., each as a Class A Liquidity Provider, Class B
Liquidity Provider, Class C-I Liquidity Provider and Class C-II Liquidity
Provider (as such terms are defined in the Intercreditor Agreement) under the
respective Liquidity Facilities, or any successor thereto.

"Loan Participants" mean, until the Closing shall have been
consummated, the Applicable Pass Through Trustees, and after the Closing shall
have been consummated, each Note Holder.

"Loss Payment Date" means the date on which payment is due pursuant to
Section 10.1.2(a)(i) of the Lease.

"Maintenance Program" is defined in Annex C to the Lease.

"Majority in Interest of Note Holders" means as of a particular date
of determination, the holders of a majority in aggregate unpaid Original Amount
of all Equipment Notes outstanding as of such date (excluding any Equipment
Notes held by Owner Trustee, Lessee, or Owner Participant or any Affiliate of
any such party or any interests of Owner Trustee or Owner Participant therein
by reason of subrogation pursuant to Section 4.03 of the Trust Indenture
(unless all Equipment Notes then outstanding shall be held by Owner Trustee,
Lessee, Owner Participant or any Affiliate of any thereof)); provided that for
the purposes of directing any action or casting any vote or giving any consent,
waiver or instruction hereunder any Note Holder of an Equipment Note or
Equipment Notes may allocate, in such Note Holder's sole discretion, any
fractional portion of the principal amount of such Equipment Note or Equipment
Notes in favor of or in opposition to any such action, vote, consent, waiver or
instruction.

"Make-Whole Amount" means, with respect to any Equipment Note, an
amount (as determined by an independent investment banker of national standing)
equal to the excess, if any, of

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(a) the present value of the remaining scheduled payments of principal and
interest to maturity of such Equipment Note computed by discounting such
payments on a semiannual basis on each Payment Date (assuming a 360-day year of
twelve 30- day months) using a discount rate equal to the Treasury Yield over
(b) the outstanding principal amount of such Equipment Note plus accrued
interest to the date of determination. For purposes of determining the
Make-Whole Amount, "Treasury Yield" means, at the date of determination with
respect to any Equipment Note, the interest rate (expressed as a decimal and,
in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the semi-annual yield to
maturity for United States Treasury securities maturing on the Average Life
Date of such Equipment Note and trading in the public securities markets either
as determined by interpolation between the most recent weekly average yield to
maturity for two series of United States Treasury securities, trading in the
public securities markets, (A) one maturing as close as possible to, but
earlier than, the Average Life Date of such Equipment Note and (B) the other
maturing as close as possible to, but later than, the Average Life Date of such
Equipment Note, in each case as published in the most recent H.15(519) or, if a
weekly average yield to maturity for United States Treasury securities maturing
on the Average Life Date of such Equipment Note is reported on the most recent
H.15(519), such weekly average yield to maturity as published in such H.15(519)
"H.15(519)" means the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of a Make-Whole Amount shall be the
third Business Day prior to the applicable payment or redemption date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable payment or
redemption date.

"Manufacturer's Purchase Price" means the amount required to be paid
to the Airframe Manufacturer to purchase the Aircraft pursuant to the Purchase
Agreement Assignment.

"Material Adverse Change" means, with respect to any person, any
event, condition or circumstance that materially and adversely affects such
person's business or consolidated financial condition, or its ability to
observe or perform its obligations, liabilities and agreements under the
Operative Agreements.

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"Minimum Liability Insurance Amount" is defined in Schedule 1 to the
Lease.

"Mortgaged Property" is defined in Section 3.03 of the Trust
Indenture.

"Mortgagee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as loan trustee under
the Trust Indenture.

"Mortgagee Agreements" means, collectively, the Participation
Agreement, the Trust Indenture and each other agreement between Mortgagee and
any other party to the Participation Agreement, relating to the Transactions,
delivered on the Delivery Date.

"Mortgagee Event" means (i) in the event of a reorganization
proceeding involving the Lessee under Chapter 11 of the Bankruptcy Code, (A)
the trustee in such proceeding or the Lessee not assuming or agreeing to
perform its obligations under the Lease, as contemplated under Section 1110,
during the 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or
such longer period as may apply under Section 1110(b) of the Bankruptcy Code)
or (B) at any time after agreeing to perform or assume such obligations, such
trustee or the Lessee ceasing to perform or assuming such obligations with the
result that the Continuous Stay Period comes to an end or (ii) either the
Equipment Notes shall have become due and payable pursuant to Section 4.04(b)
of the Trust Indenture or Mortgagee has taken action or notified Owner Trustee
that it intends to take action to foreclose the Lien of the Trust Indenture or
otherwise commence the exercise of any significant remedy in accordance with
Section 4.04(a) of the Trust Indenture.

"Net Economic Return" means the Owner Participant's net after-tax
yield utilizing the multiple investment sinking fund method of analysis and
aggregate net after-tax cash flow, computed on the basis of the same
methodology and assumptions as were utilized by the initial Owner Participant
in determining Basic Rent, Stipulated Loss Value percentages and Termination
Value percentages, as of the Delivery Date, as such assumptions may be adjusted
for events that have been the basis for

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adjustments to Basic Rent pursuant to Section 3.2.1(b) of the Lease or events
giving rise to indemnity payments pursuant to Section 5.1 of the Tax Indemnity
Agreement; provided, that, if the initial Owner Participant shall have
transferred its interest, Net Economic Return shall be calculated as if the
initial Owner Participant had retained its interest; provided further, that,
notwithstanding the preceding proviso, solely for purposes of Section 11 of the
Participation Agreement and calculating any adjustments to Basic Rent,
Stipulated Loss Values and Termination Values in connection with a refunding
pursuant to such Section 11 at a time when Owner Participant is a transferee
(other than an Affiliate of the initial Owner Participant), the after-tax yield
(but not the after-tax cash flow) component of Net Economic Return shall be
calculated on the basis of the methodology and assumptions utilized by the
transferee Owner Participant as of the date on which it acquired its interest.

"Net Present Value of Rents" means the present value, as of the date
of determination, discounted at 10% per annum, compounded semiannually to the
date of determination, of all unpaid Basic Rent payments during the
then-remaining portion of the Base Lease Term, expressed as a percentage of
Lessor's Cost.

"Net Worth" means, for any person, the excess of its total assets over
its total liabilities.

"New Debt" means debt securities in an aggregate principal amount
specified in the Refunding Information.

"Non-U.S. Person" means any Person other than a United States person,
as defined in Section 7701(a)(30) of the Code.

"Note Holder" means at any time each registered holder of one or more
Equipment Notes.

"Note Purchase Agreement" means the Note Purchase Agreement, dated as
of the Issuance Date, among Continental Airlines, Inc., the Subordination
Agent, the Escrow Agent, the Paying Agent and the Pass Through Trustee under
each Pass Through Trust Agreement providing for, among other things, the
issuance and sale of certain equipment notes.

"Officer's Certificate" means, in respect of any party to the
Participation Agreement, a certificate signed by the Chairman, the President,
any Vice President (including those with

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varying ranks such as Executive, Senior, Assistant or Staff Vice President),
the Treasurer or the Secretary of such party.

"Operative Agreements" means, collectively, the Participation
Agreement, the Trust Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement, the Lease, Lease Supplement
No. 1, the Trust Indenture, the initial Trust Indenture Supplement, the Bills
of Sale, the Tax Indemnity Agreement and the Equipment Notes.

"Operative Indentures" means each of the indentures under which notes
have been issued and purchased by the Pass Through Trustees pursuant to the
Note Purchase Agreement.

"OP Jurisdiction" is defined in Schedule 3 to the Participation
Agreement.

"Original Amount," with respect to an Equipment Note, means the stated
original principal amount of such Equipment Note and, with respect to all
Equipment Notes, means the aggregate stated original principal amounts of all
Equipment Notes.

"Owner Participant" means the person executing the Participation
Agreement as "Owner Participant" or, if a second person becomes an "Owner
Participant" pursuant to Section 10.1.1 of the Participation Agreement, both of
such persons; provided that if an Owner Participant Transfers 100% of its
interest to a successor Owner Participant, such transferring Owner Participant
shall thereafter no longer be considered an "Owner Participant".

"Owner Participant Agreements" means, collectively, the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and each other
agreement between Owner Participant and any other party to the Participation
Agreement relating to the Transactions, delivered on the Delivery Date.

"Owner Participant's Percentage" means the percentage of Lessor's Cost
allocated to the Owner Participant in Schedule 2 to the Participation
Agreement.

"Owner Trustee" means First Security Bank, National Association, a
national banking association, not in its individual capacity, except as
expressly provided in any

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Operative Agreement, but solely as Owner Trustee under the Trust Agreement.

"Owner Trustee Agreements" means, collectively, the Participation
Agreement, the Lease, Lease Supplement No. 1, the Trust Agreement, the Trust
Indenture, the initial Trust Indenture Supplement, the Equipment Notes, the
Purchase Agreement Assignment, and each other agreement between Owner Trustee
and any other party to the Participation Agreement, relating to the
Transactions, delivered on the Delivery Date.

"Participants" means, collectively, Owner Participant and each Loan
Participant and "Participant" means Owner Participant or a Loan Participant,
individually.

"Participation Agreement" means the Participation Agreement dated as
of _____________ among Lessee, Owner Participant, Owner Trustee, the Applicable
Pass Through Trustees, Subordination Agent and Mortgagee.

"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than (a) Engines or engines, and (b) any items leased by Lessee
from a third party other than Lessor)), that may from time to time be installed
or incorporated in or attached or appurtenant to the Airframe or any Engine.

"Pass Through Agreements" means the Pass Through Trust Agreements, the
Note Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Liquidity Facilities and the Fee Letters referred
to in Section 2.03 of each of the Liquidity Facilities provided, that no
amendment, modification or supplement to, or substitution or replacement of,
any such Fee Letter shall be effective for purposes of any obligation of
Lessee, unless consented to by Lessee.

"Pass Through Certificates" means the pass through certificates issued
by the Pass Through Trusts (and any other pass through certificates for which
such pass through certificates may be exchanged).

"Pass Through Trust" means each of the four separate pass through
trusts created under the Pass Through Trust Agreements.

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"Pass Through Trust Agreement" means each of the four separate pass
through trust agreements dated as of the Issuance Date by and between the
Lessee and a Pass Through Trustee.

"Pass Through Trustee" means Wilmington Trust Company, a Delaware
banking corporation, in its capacity as trustee under each Pass Through Trust
Agreement.

"Pass Through Trustee Agreements" means the Participation Agreement,
the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Escrow Agreements, and the Intercreditor Agreement.

"Payment Date" means each April 1 and October 1 during the Term,
commencing with the first such date to occur after the Commencement Date.

"Payment Due Rate" is defined in Schedule 1 to the Lease.

"Payment Period" means each of the consecutive semiannual periods
during the Term ending on a Payment Date, the first such period commencing on
and including the Commencement Date.

"Paying Agent" means Wilmington Trust Company, as Paying Agent under
each of the Escrow Agreements.

"Permitted Air Carrier" means (i) any manufacturer of airframes or
aircraft engines, or any Affiliate of a manufacturer of airframes or aircraft
engines, (ii) any Permitted Foreign Air Carrier, (iii) any person approved in
writing by Lessor or (iv) any U.S. Air Carrier.

"Permitted Country" means any country listed on Schedule 5 to the
Lease.

"Permitted Foreign Air Carrier" means any air carrier with its
principal executive offices in any Permitted Country and which is authorized to
conduct commercial airline operations and to operate jet aircraft similar to
the Aircraft under the applicable Laws of such Permitted Country.

"Permitted Government Entity" means (i) the U.S. Government or (ii)
any Government Entity if the Aircraft is then registered under the laws of the
country of such Government Entity.

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"Permitted Institution" means (a) any bank, trust company, insurance
company, financial institution or corporation (other than, without Lessee's
consent, a commercial air carrier, a commercial aircraft operator, a freight
forwarder or Affiliate of any of the foregoing), in each case with a combined
capital and surplus or net worth of at least $50,000,000.

"Permitted Lien" means any Lien described in clauses (a) through (g),
inclusive, of Section 6 of the Lease.

"Permitted Sublease" means a sublease permitted under Section 7.2.7 of
the Lease.

"Permitted Sublessee" means the sublessee under a Permitted Sublease.

"Persons" or "persons" means individuals, firms, partnerships, joint
ventures, trusts, trustees, Government Entities, organizations, associations,
corporations, government agencies, committees, departments, authorities and
other bodies, corporate or incorporate, whether having distinct legal status or
not, or any member of any of the same.

"Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA, or any plan within the meaning of Section 4975(e)(1) of the
Code.

"Preliminary Notice" is defined in Section 17.1 of the Lease.

"Premium Termination Date" means April 1, 2010 in the case of the
Series A Equipment Notes, April 1, 2007 in the case of the Series B Equipment
Notes and April 1, 2003 in the case of the Series C Equipment Notes.

"PTT Percentage" means, with respect to each Applicable Pass Through
Trustee, the percentage of Lessor's Cost allocated to such Pass Through Trustee
in Schedule 2 to the Participation Agreement.

"Purchase Agreement" means the Purchase Agreement between Airframe
Manufacturer and Lessee (including all exhibits thereto, together with all
letter agreements entered into that by their terms constitute part of such
Purchase Agreement), to the extent assigned pursuant to the Purchase Agreement
Assignment.

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"Purchase Agreement Assignment" means the Purchase Agreement and
Engine Warranties Assignment , dated as of even date with the Participation
Agreement, between Lessee and Owner Trustee.

"Purchase Date" means the last Business Day of the Base Lease Term or
any Renewal Lease Term, as specified in any Purchase Notice.

"Purchase Notice" is defined in Section 17.3.1 of the Lease.

"QIB" is defined in Section 2.08 of the Trust Indenture.

"Refunding Certificate" means a certificate of an authorized
representative of Owner Participant delivered pursuant to Section 11.1.1 of the
Participation Agreement, setting forth (a) the Refunding Date and (b) the
following information, subject to the limitations set forth in Section 11 of
the Participation Agreement: (i) the principal amount of debt to be issued by
Owner Trustee on the Refunding Date, (ii) the proposed adjusted debt/equity
ratio and (iii) the proposed revised schedules of Basic Rent, Stipulated Loss
Value percentages and Termination Value percentages, and the proposed
Amortization Schedules, calculated in accordance with Section 3.2.1 of the
Lease.

"Refunding Date" means the proposed date on which the outstanding
Equipment Notes will be redeemed and refinanced pursuant to Section 11 of the
Participation Agreement.

"Refunding Information" means the information set forth in the
Refunding Certificate (other than the Refunding Date) as such information may
have been revised by any verification procedures demanded by Lessee pursuant to
Section 3.2.1(d) of the Lease.

"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated the Issuance Date by and among the Lessee and certain
initial purchasers of the Pass Through Certificates named therein, providing
for, among other things, the exchange offer with respect to such Pass Through
Certificates to be registered under the Securities Act or the shelf
registration of such Pass Through Certificates for a period specified therein.

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"Renewal Lease Term" means, collectively, the Fixed Renewal Lease
Terms and the Subsequent Renewal Lease Terms, in each case, if any.

"Renewal Notice" is defined in Section 17.2.1 of the Lease.

"Renewal Rent" for the Aircraft means the rent payable therefor in
respect of a Renewal Lease Term determined pursuant to Section 17.2.2 of the
Lease.

"Rent" means, collectively, Interim Rent, Basic Rent, Renewal Rent and
Supplemental Rent.

"Replacement Airframe" means any airframe substituted for the Airframe
pursuant to Section 10 of the Lease.

"Replacement Engine" means an engine substituted for an Engine
pursuant to the Lease.

"Return Acceptance Supplement" means a Return Acceptance Supplement,
dated as of the date the Aircraft is returned to Lessor pursuant to Section 5
of the Lease, by Lessor and Lessee substantially in the form of Exhibit B to
the Lease.

"Scheduled Delivery Date" means the expected Delivery Date notified to
each Participant, Owner Trustee and Mortgagee by Lessee pursuant to Section 4.1
of the Participation Agreement, which expected Delivery Date shall be a
Business Day not later than the Commitment Termination Date.

"Scheduled Expiration Date" is defined in Schedule 1 to the Lease.

"Scheduled Renewal Term Expiration Date" means, in the case of the
first Fixed Renewal Lease Term, the second anniversary of the Scheduled
Expiration Date, in the case of the second Fixed Renewal Lease Term, the fourth
anniversary of the Scheduled Expiration Date and, in the case of any Subsequent
Renewal Lease Term, the day preceding the first anniversary of the commencement
date of such Subsequent Renewal Lease Term.

"SEC" means the Securities and Exchange Commission of the United
States, or any Government Entity succeeding to the functions of such Securities
and Exchange Commission.

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"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor or analogous section of the federal bankruptcy Law in effect from
time to time.

"Secured Obligations" is defined in Section 2.06 of the Trust
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

"Security" means a "security" as defined in Section 2(1) of the
Securities Act.

"Senior Holder" is defined in Section 2.14(c) of the Trust Indenture.

"Series" means any of Series A, Series B or Series C.

"Series A" or "Series A Equipment Notes" means Equipment Notes issued
under the Trust Indenture and designated as "Series A" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series A."

"Series B" or "Series B Equipment Notes" means Equipment Notes issued
under the Trust Indenture and designated as "Series B" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series B."

"Series C" or "Series C Equipment Notes" means Equipment Notes issued
under the Trust Indenture and designated as "Series C" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series C."

"Similar Aircraft" is defined in Schedule 1 to the Lease.

"SLV Rate" is defined in Schedule 1 to the Lease.

"Special Default" means (i) the failure by Lessee to pay any amount of
Interim Rent, Basic Rent, Renewal Rent, Stipulated Loss Value or Termination
Value when due or (ii) the occurrence of any Lease Default or Lease Event of
Default referred to in Section 14.5 of the Lease.

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"Stipulated Loss Value" means, with respect to the Aircraft, (a)
during the Base Lease Term, the amount determined by multiplying (i) the
percentage set forth in Schedule 3 to the Lease (as adjusted from time to time
in accordance with Section 3.2.1 of the Lease) opposite the Stipulated Loss
Value Date by (ii) Lessor's Cost and (b) during any Renewal Term, the amount
determined pursuant to Section 17.2.3 of the Lease. Notwithstanding anything to
the contrary in any Operative Agreement, Stipulated Loss Value shall always be
sufficient to pay in full, as of the date of payment thereof (assuming timely
payment of the Equipment Notes prior to such date), the aggregate unpaid
principal amount of all Equipment Notes outstanding as of such date, together
with accrued and unpaid interest on all such Equipment Notes as of such date.

"Stipulated Loss Value Date" means, for any month, the day in such
month specified in Schedule 3 to the Lease or, if such day is not a Business
Day, the immediately succeeding Business Day.

"Subordination Agent" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement.

"Subordination Agent Agreements" means the Participation Agreement,
the Liquidity Facilities and the Intercreditor Agreement.

"Subsequent Renewal Lease Term" means each term for which the Lease is
extended by Lessee, if any, after the second Fixed Renewal Lease Term.

"Supplemental Rent" means, without duplication (a) all amounts,
liabilities, indemnities and obligations (other than Interim Rent, Basic Rent
or Renewal Rent but including Make-Whole Amount, if any) that Lessee assumes or
becomes obligated to or agrees to pay under any Lessee Operative Agreement to
or on behalf of Lessor or any other person, including, without limitation,
payments of Stipulated Loss Value, Termination Value and payments of
indemnities under Section 9 of the Participation Agreement, (b) (i) to the
extent not payable (whether or not in fact paid) under Section 6(a) of the Note
Purchase Agreement (as originally in effect or amended with the consent of the
Owner Participant), an amount or amounts equal to the fees payable to the
relevant Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter (as defined in the

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Intercreditor Agreement) multiplied by a fraction the numerator of which shall
be the then outstanding aggregate principal amount of the Series A Equipment
Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal amount
of all "Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement); (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) (x) the amount equal to
interest on any Non-Extension Advance (other than any Applied Non-Extension
Advance) payable under Section 3.07(a)(i) of each Liquidity Facility minus
Investment Earnings from such Non-Extension Advance multiplied by (y) the
fraction specified in the forgoing clause (i); (iv) if any payment default
shall have occurred and be continuing with respect to interest on any Series A
Equipment Notes, Series B Equipment Notes or Series C Equipment Notes, (x) the
excess, if any, of (1) an amount equal to interest on any Unpaid Advance,
Applied Downgrade Advance or Applied Non-Extension Advance payable under
Section 3.07(a) of each Liquidity Facility over (2) the sum of Investment
Earnings from any Final Advance plus any amount of interest at the Payment Due
Rate actually payable (whether or not in fact paid) by Lessee in respect of the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and
the denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (each as defined in the Note Purchase Agreement)
(other than interest becoming due and payable solely as a result of
acceleration of any such "Equipment Notes"); and (v) Lessee's pro rata share of
any other amounts owed to the Liquidity Providers by the Subordination Agent as
borrower under each Liquidity Facility (other than amounts due as repayment of
advances thereunder or as interest on such advances), except to the extent
payable pursuant to clause (ii), (iii) or (iv) above, (c) Lessee's pro rata
share of all compensation and reimbursement

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of expenses, disbursements and advances payable by Lessee under the Pass
Through Trust Agreements, (d) Lessee's pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination Agent
under the Intercreditor Agreement except with respect to any income or
franchise taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement and (e) in the event
Lessee requests any amendment to any Operative Agreement or Pass Through
Agreement, Lessee's pro rata share of all reasonable fees and expenses
(including, without limitation, fees and disbursements of counsel) of the
Escrow Agents and the Paying Agents in connection therewith payable by the Pass
Through Trustees under the Escrow Agreements. As used herein, "Lessee's pro
rata share" means as of any time a fraction, the numerator of which is the
principal balance then outstanding of Equipment Notes and the denominator of
which is the aggregate principal balance then outstanding of all "Equipment
Notes" (as such term is defined in each of the Operative Indentures). For
purposes of this definition, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Cash Collateral Account", "Downgrade Advance", "Final
Advance", "Investment Earnings", "Non-Extension Advance" and "Unpaid Advance"
shall have the meanings specified in each Liquidity Facility.

"Tax Attribute Period" is defined in Section 1(e) of the Tax Indemnity
Agreement.

"Tax Indemnitee" means (a) First Security and Owner Trustee, (b) WTC
and Mortgagee, (c) each separate or additional trustee appointed pursuant to
the Trust Agreement or the Trust Indenture, (d) each Participant, (e) the Trust
Estate and the Trust Indenture Estate and (f) the respective successors,
assigns, agents and servants of the foregoing. For purposes of this
definition, the term "Owner Participant" shall include any member of an
affiliated group (within the meaning of Section 1504 of the Code) of which
Owner Participant is, or may become, a member if consolidated, joint or
combined returns are filed for such affiliated group for federal, state or
local income tax purposes.

"Tax Indemnity Agreement" means the Tax Indemnity Agreement, dated as
of even date with the Participation Agreement, between Lessee and Owner
Participant.

"Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies,

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imposts, duties, charges, assessments or withholdings of any nature whatsoever
imposed by any Taxing Authority, together with any penalties, additions to tax,
fines or interest thereon or additions thereto.

"Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.

"Term" means the term, commencing on the Delivery Date, for which the
Aircraft is leased pursuant to Section 3 of the Lease, and shall include the
Interim Lease Term, the Base Lease Term and, if applicable, any Renewal Lease
Term; provided that if at the scheduled end of the Term the Aircraft or
Airframe is being used, or was within six (6) months prior thereto being used,
by the U.S. Government pursuant to CRAF, the Term shall be deemed extended for
the period necessary to accommodate usage of the Aircraft or Airframe pursuant
to CRAF plus six months thereafter, and Lessee shall be obligated to pay Basic
Rent with respect to any such period of extension at a semiannual rate equal to
the average of the Basic Rent paid during the Base Lease Term or the applicable
Renewal Lease Term, whichever shall have ended immediately prior to such
extension.

"Termination Date" means any Payment Date occurring after the fifth
anniversary of the Delivery Date on which the Lease shall terminate in
accordance with Section 9 of the Lease.

"Termination Value" means, with respect to the Aircraft, the amount
determined by multiplying (a) the percentage set forth in Schedule 4 to the
Lease (as adjusted from time to time in accordance with Section 3.2.1 of the
Lease) opposite the Termination Value Date by (b) Lessor's Cost.
Notwithstanding anything to the contrary in any Operative Agreement,
Termination Value shall always be sufficient to pay in full, as of the date of
payment thereof (assuming timely payment of the Equipment Notes prior to such
date), the aggregate unpaid principal amount of all Equipment Notes outstanding
as of such date, together with accrued and unpaid interest on all such
Equipment Notes as of such date.

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"Termination Value Date" means, for any month, the day in such month
specified in Schedule 4 to the Lease or, if such day is not a Business Day, the
immediately succeeding Business Day.

"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Agreements.

"Transaction Expenses" means: (i) the reasonable and actual fees,
expenses and disbursements of (1) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel
for Mortgagee, such information to be furnished by Mortgagee, (2) Ray, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, special counsel for the Owner Trustee under the Trust Agreement,
such information to be furnished by Owner Trustee, (3) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, special counsel to the Loan Participants, such information to be
furnished by the Subordination Agent, (4) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel in Oklahoma City, Oklahoma, such information to be furnished by Lessee,
(ii) all fees, taxes and other charges payable in connection with the recording
or filing of instruments and financing statements, such information to be
furnished by Lessee, (iii) the initial fee and reasonable and actual
disbursements of Owner Trustee under the Trust Agreement, such information to
be furnished by the Owner Trustee, (iv) the initial fee and reasonable and
actual disbursements of Mortgagee under the Trust Indenture, such information
to be furnished by Mortgagee, (v) the fee of the Appraiser with respect to the
appraisal of the Aircraft referred to in Section 5.1.2(xv) of the Participation
Agreement, such information to be furnished by the Owner Participant, (vi) the
reasonable and actual fees, out-of-pocket expenses and disbursements of special
counsel to the Owner Participant (as defined in Schedule 3 to the Participation
Agreement), such information to be furnished by the Owner Participant, and
(vii) the equity placement fee and reasonable disbursements of Lessee's
Advisor, such information to be furnished by Lessee.

"Transfer" means the transfer, sale, assignment or other conveyance of
all or any interest in any property, right or interest.

"Transferee" means a person to which any Owner Participant, Owner
Trustee or any Loan Participant or Note Holder purports or intends to Transfer
any or all of its right, title or interest in the Trust Estate or in its
Equipment Note and the Trust Indenture Estate, respectively, as described in
Section 10.1.1(a), 10.1.2 or 10.1.3 (but excluding participants in any
participation

ANNEX A BASE
154
35

referred to in Section 10.1.3), respectively, of the Participation Agreement.

"Trust" means the trust created by the Trust Agreement.

"Trust Agreement" means the Trust Agreement , dated as of even date
with the Participation Agreement, between Owner Participant and Owner Trustee.

"Trust Estate" means all estate, right, title and interest of Owner
Trustee in and to the Aircraft, the Lease, any Lease Supplement and the
Purchase Agreement including, without limitation, all amounts of Basic Rent and
Supplemental Rent including, without limitation, insurance proceeds (other than
insurance proceeds payable to or for the benefit of Owner Participant, Note
Holders or WTC) and requisition, indemnity or other payments of any kind for of
with respect to the Aircraft (except amounts owing to Owner Participant, Note
Holders or WTC, or to any of their respective directors, officers, employees,
servants and agents, pursuant to Section 10 of the Participation Agreement).
Notwithstanding the foregoing, "Trust Estate" shall not include any Excluded
Payment.

"Trust Indenture" means the Trust Indenture and Mortgage
_____________, dated as of even date with the Participation Agreement, between
Owner Trustee and Mortgagee.

"Trust Indenture Estate" is defined in the "Granting Clause" of the
Trust Indenture.

"Trust Indenture Supplement" means a Trust Indenture and Mortgage
_____________ Supplement, substantially in the form of Exhibit A to the Trust
Indenture, with appropriate modifications to reflect the purpose for which it
is being used.

"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

"United States" or "U.S." means the United States of America;
provided, that for geographic purposes, "United States" means, in aggregate,
the 50 states and the District of Columbia of the United States of America.

"U.S. Air Carrier" means any United States air carrier that is a
Citizen of the United States holding an air carrier operating certificate
issued by the Secretary of Transportation

ANNEX A BASE
155
36

pursuant to chapter 447 of title 49 of the United States Code for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo, and
as to which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the FAA Regulations, or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.

"U.S. Person" means any Person described in Section 7701(a)(30) of the
Code.

"U.S. Government" means the federal government of the United States,
or any instrumentality or agency thereof the obligations of which are
guaranteed by the full faith and credit of the federal government of the United
States.

"Weighted Average Life to Maturity" means, with respect to any
specified Debt, at the time of the determination thereof the number of years
obtained by dividing the then Remaining Dollar-years of such Debt by the then
outstanding principal amount of such Debt. The term "Remaining Dollar-years"
shall mean the amount obtained by (1) multiplying the amount of each
then-remaining principal payment on such Debt by the number of years
(calculated at the nearest one- twelfth) that will elapse between the date of
determination of the Weighted Average Life to Maturity of such Debt and the
date of that required payment and (2) totaling all the products obtained in
clause (1) above.

"Wet Lease" means any arrangement whereby Lessee or a Permitted
Sublessee agrees to furnish the Aircraft, Airframe or any Engine to a third
party pursuant to which the Aircraft, Airframe or Engine shall at all times be
in the operational control of Lessee or a Permitted Sublessee, provided that
Lessee's obligations under this Lease shall continue in full force and effect
notwithstanding any such arrangement.

"WTC" means Wilmington Trust Company, a Delaware banking corporation,
not in its capacity as Mortgagee under the Trust Indenture, but in its
individual capacity.

ANNEX A BASE
156
-----------------------
SCHEDULE 1
TO
PARTICIPATION AGREEMENT
-----------------------

ACCOUNTS; ADDRESSES

ADDRESS FOR NOTICES
-------------------

CONTINENTAL Continental Airlines, Inc.
AIRLINES, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
INC. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice
President and Chief
Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

OWNER
PARTICIPANT

THE BOEING The Boeing Company
COMPANY ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
M/S 68-34
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

FIRST SECURITY First Security Bank
BANK, National Association
NATIONAL ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

SCHEDULE 1 TO PARTICIPATION AGREEMENT BASE PAGE 1
▇▇▇

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Trust Company
TRUST One ▇▇▇▇▇▇ Square
COMPANY, AS ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON Wilmington Trust Company
TRUST One ▇▇▇▇▇▇ Square
COMPANY, AS ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
AGENT Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON Wilmington Trust Company
TRUST One ▇▇▇▇▇▇ Square
COMPANY, AS ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ THROUGH ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TRUSTEE FOR Attention: Corporate Trust
THE ▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ THROUGH Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
TRUST

WILMINGTON Wilmington Trust Company
TRUST One ▇▇▇▇▇▇ Square
COMPANY, AS ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ THROUGH ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TRUSTEE FOR Attention: Corporate Trust
THE 1997-[1C-I] Administration
[1C-II] Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PASS THROUGH
TRUST

SCHEDULE 1 TO PARTICIPATION AGREEMENT BASE PAGE 2
158
-----------------------
SCHEDULE 2
TO
PARTICIPATION AGREEMENT
-----------------------
COMMITMENTS

PARTICIPANT PERCENTAGE OF LESSOR'S DOLLAR AMOUNT
----------- ---------------------- -------------
COST
----

OWNER PARTICIPANT OWNER PARTICIPANT'S
PERCENTAGE

PASS THROUGH TRUSTEE LOAN PARTICIPANT'S
PTT PERCENTAGE

TOTAL 100%

SCHEDULE 2 TO PARTICIPATION AGREEMENT BASE PAGE 1

159
-----------------------
SCHEDULE 3
TO
PARTICIPATION AGREEMENT
-----------------------

CERTAIN TERMS

DEFINED TERM DEFINITION

BFE Amount
----------------
Commitment Termination Date
----------------
Lessor's Cost
----------------
Lessee's Advisor
----------------
OP Jurisdiction
----------------
Special counsel to the Owner Participant
----------------

SCHEDULE 3 TO PARTICIPATION AGREEMENT BASE PAGE 1
160

EXHIBIT A

[Form of Opinion of Lessee's Special Counsel]

_________________

To the Persons Listed on Schedule I
Attached Hereto

Re: Lease of Boeing Model _________Aircraft with Manufacturer's
Serial Number _______ _ and U.S. Registration
Number N______________________________________________

Gentlemen:

We have been requested by Continental Airlines, Inc., a
Delaware corporation (the "Company"), to act as special counsel with respect
to, and to render this opinion letter in connection with, the transactions
contemplated by the Participation Agreement ________, dated as of __________
________________(the "Participation Agreement"), among , as Owner Participant
(the "Owner Participant"), First Security Bank, National Association, a
national banking association ("First Security"), as Owner Trustee (the "Owner
Trustee"), Wilmington Trust Company, a Delaware banking corporation ("WTC"), as
Mortgagee (the "Mortgagee"), the Company as Lessee (the "Lessee"), and WTC, in
its capacity as Subordination Agent under the Intercreditor Agreement (as
defined in the Participation Agreement) and Pass Through Trustee under the
Applicable Pass Through Trust Agreements (as defined in the Participation
Agreement), as Loan Participant (the "Loan Participant"). Capitalized terms
used herein and not otherwise defined herein have the respective meanings given
those terms in the Participation Agreement.

In connection with this opinion letter we have examined, among
other things, originals or copies certified or otherwise identified to our
satisfaction of the following documents:

(i) Participation Agreement;
(ii) Lease;
161

(iii) Lease Supplement No. 1;
(iv) Tax Indemnity Agreement;
(v) Trust Agreement;
(vi) Trust Indenture;
(vii) Trust Indenture Supplement No. 1;
(viii) Purchase Agreement Assignment;
(ix) Airframe Manufacturer Consent and Agreement;
(x) Engine Manufacturer Consent and Agreement;
(xi) Forms of the Equipment Notes; and
(xii) Bills of Sale.

We have also examined and relied upon such other documents and
such other corporate records, certificates and other statements of governmental
officials and corporate officers and other representatives of the Company as we
have deemed necessary or appropriate for the purposes of this opinion. As to
certain facts material to the opinions expressed herein, we have relied upon
representations and warranties contained in the Operative Agreements. The
opinions expressed herein are subject to the following exceptions, assumptions,
qualifications and limitations:

A. The opinions set forth below are limited to the laws
of the State of New York, the federal laws of the United States of America and
the General Corporation Law of the State of Delaware, except that we express no
opinion with respect to (i) the laws, regulations or ordinances of any county,
town or municipality or governmental subdivision or agency thereof, (ii) state
securities or blue sky laws or federal securities laws, including the
Securities Act and the Investment Company Act of 1940, (iii) any federal or
state tax, antitrust or fraudulent transfer or conveyance laws, (iv) the
Employee Retirement Income Security Act of 1974, as amended, or (v) the Act
(except as expressly provided in paragraph 5 below), or any other laws, rules
or regulations governing, regulating or relating to the acquisition, ownership,
registration, use or sale of an aircraft, airframe or aircraft engine or to the
particular nature of the equipment to be acquired by the Owner Trustee. In
addition, our opinions are based upon a review of those laws, statutes, rules
and regulations which, in our experience, are normally applicable to
transactions of the type contemplated by the Participation Agreement.

remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. In addition, certain
remedial and procedural provisions of the Company Documents (as defined in
paragraph 2 below) and the Trust Indenture are or may be unenforceable in whole
or in part, but the inclusion of such provisions does not affect the validity
of those agreements and does not, in our opinion, make the remedies provided in
those agreements, or otherwise available under applicable law, inadequate for
the practical realization of the substantive benefits purported to be provided
thereby, except for the economic consequences resulting from any delay imposed
by, or any procedure required by, applicable laws, rules, regulations and by
constitutional requirements. We express no opinion as to (i) any provision
contained in any Operative Agreement (a) providing for indemnification or
exculpation of any Person for such Person's gross negligence, willful
misconduct, recklessness or unlawful conduct or in respect of liabilities under
the Securities Act, (b) providing for late payment charges or an increase in
interest rate upon delinquency in payment or the occurrence of a default or
other specified event but only to the extent such provision is deemed to
constitute a penalty or liquidated damages provision, (c) as such provision
relates to the subject matter jurisdiction of federal courts or the waiver of
inconvenient forum with respect to proceedings in federal courts, (d) that
purports to establish (or may be construed to establish) evidentiary standards
or (e) providing for the waiver of any statutory right or any broadly or
vaguely stated rights or unknown future rights, or any waiver which is against
public policy considerations or (ii) Section 15.8(c) of the Participation
Agreement or any comparable provision of any other Operative Agreement. Under
certain circumstances the requirement that the provisions of an Operative
Agreement may be modified or waived only in writing or only in a specific
instance and provisions to the effect that failure or delay in exercising any
right, remedy, power and/or privilege will not impair or waive such right,
remedy, power and/or privilege may be unenforceable to the extent that an oral
agreement has been effected or a course of dealing has occurred modifying such
provisions. A court may modify or limit contractual agreements regarding
attorneys' fees.

C. To the extent that our opinions expressed herein
involve conclusions as to the matters set forth in the opinions dated the date
hereof of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ or ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇ being delivered to you on the date hereof, we have assumed, without
independent investigation, the correctness of the matters set forth in such
opinions.

D. We have assumed the due authorization, execution and
delivery of the Operative Agreements by each of the parties thereto, that each
of such parties (other than the Company) has the power and authority to
execute, deliver and perform each such Operative Agreement and has obtained or
made all necessary consents, approvals, filings and registrations in connection
therewith (except any required under New York law by the Company), that such
execution, delivery and performance does not violate its charter, by-laws or
similar instrument, that the Trust Agreement constitutes the valid, binding and
enforceable obligations of the parties thereto and duly creates the trust it
purports to create, that the Owner Trustee for purposes of Section 9-103(3) of
the Uniform Commercial Code of the State of New York (the "UCC") is
163
4

located in Utah and that, under applicable law, the Owner Trustee would be
deemed to be the owner of the Trust Estate and Trust Indenture Estate, that
First Security has the legal ability to exercise its trust powers with respect
to the Trust Estate in the State of New York, that value has been given by the
Loan Participant to the Owner Trustee under the Trust Indenture, that the Owner
Trustee has rights in the Trust Indenture Estate, that each of First Security
and WTC is duly organized, validly existing and in good standing in its
jurisdiction of organization and qualified to transact business in each other
jurisdiction where such qualification is required.

E. We have assumed the due authorization, execution and
issuance of the Equipment Notes by the Owner Trustee and the due authentication
of the Equipment Notes by the Mortgagee and the delivery thereof against
payment therefor, all in accordance with the Participation Agreement and the
Trust Indenture, and that the Equipment Notes conform to the forms thereof
examined by us.

F. We have assumed that all signatures on documents
examined by us are genuine, that all persons signing such documents have legal
capacity, that all documents submitted to us as originals are authentic and
that all documents submitted to us as copies or specimens conform with the
originals, which facts we have not independently verified.

G. We express no opinion as to (i) any provision in any
Operative Agreement that is contrary to Section 2A-303, Section 9-311, or Part
V of Article 9, of the UCC, or (ii) whether or not the Lease constitutes a
"security interest" within the meaning of Section 1-201(37) of the UCC. We
express no opinion as to whether or not the Lease constitutes a "Finance Lease"
within the meaning of Section 2A-103(g) of the UCC and we express no opinion as
to the enforceability of any provision of any Operative Agreement which
purports to categorize the Lease as such.

H. We have not made any examination of, and express no
opinion with respect to (and to the extent relevant have assumed the accuracy
and sufficiency of), (i) descriptions of, the legal or beneficial ownership of,
or the title or condition of title to, the Trust Estate or the Trust Indenture
Estate or any other property covered by any of the Operative Agreements, (ii)
except as expressly set forth in paragraphs 5 and 8 below, the existence,
creation, validity or attachment of any Lien thereon, (iii) except as expressly
set forth in paragraph 5 below, the perfection of any Lien thereon and (iv) the
priority or enforcement of any Lien thereon.

I. In giving an opinion regarding the valid existence
and good standing of the Company, we have relied solely upon certificates of
public officials.

J. The opinions expressed herein are given as of the
date hereof. We assume no obligation to advise you of any facts or
circumstance that may come to our attention, or any changes in law that may
occur after the date hereof, which may affect the opinion expressed herein.
164
5

Based on and subject to the foregoing, we are of the opinion
that:

1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.

2. The Company has all necessary corporate power to
execute, deliver and perform its obligations under the Participation Agreement,
the Lease, the Lease Supplement No. 1, the Purchase Agreement Assignment, the
BFE ▇▇▇▇ of Sale and the Tax Indemnity Agreement (collectively, the "Company
Documents"). Neither the execution nor delivery of the Company Documents by
the Company nor the consummation of the transactions contemplated thereby will
result in any violation of (a) its Restated Certificate of Incorporation or
By-laws or (b) any law, governmental rule or regulation known to us to be
applicable to, or binding on, the Company, or requires the approval of the
stockholders of the Company.

3. Each Company Document constitutes the valid and
binding obligation of the Company and is enforceable against the Company in
accordance with its terms.

4. Except for the matters referred to in clauses (i)
through (iv) of paragraph 5 below, no approval, authorization or other action
by or filing with any governmental authority is required for the execution and
delivery by the Company of the Company Documents or the consummation of the
transactions contemplated thereby to occur at the Closing.

5. Except for (i) the registration of the Aircraft with
the FAA pursuant to the Act, (ii) the filing and recordation in accordance with
the Act of the FAA Filed Documents, and assuming that at the time of such
filing no other unrecorded document relating to the Aircraft has been filed
pursuant to the Act, (iii) the filing of Financing Statements referred to in
Section 5.1.12 of the Participation Agreement, and the filing of periodic
continuation statements with respect thereto, and (iv) the taking of possession
by the Mortgagee of the original counterparts of the Lease and Lease Supplement
No. 1, (a) no further filing or recording of any document is necessary (x) to
establish the Owner Trustee's title to the Airframe and Engines, and (y) to
create a valid security interest in the Owner Trustee's interest as owner of
the Airframe and Engines, the Lease and the Lease Supplement No. 1 covering the
Aircraft, the Purchase Agreement (to the extent assigned by the Purchase
Agreement Assignment) and the Purchase Agreement Assignment in favor of the
Mortgagee pursuant to the Trust Indenture and (b) no further filing or
recording of any document in the State of New York or under the Act is required
to perfect a security interest in the Owner Trustee's interest as owner of the
Airframe and Engines, the Lease and Lease Supplement No. 1 covering the
Aircraft, the Purchase Agreement (to the extent assigned by the Purchase
Agreement Assignment) and the Purchase Agreement Assignment in favor of the
Mortgagee pursuant to the Trust Indenture.

6. Each of the Participation Agreement, the Trust
Indenture, the Lease and the Equipment Notes constitutes the valid and binding
obligation of First Security, in its individual capacity (but only to the
extent expressly stated in such document that First Security is entering into
such document in its individual capacity) and otherwise solely as Owner
Trustee,
165
6

enforceable against First Security in its individual capacity (but only to the
extent expressly stated in such document that First Security is entering into
such document in its individual capacity) and otherwise solely as Owner Trustee
in accordance with its terms.

7. So long as the Company continues to be a "citizen of
the United States", as defined in section 40102 of Title 49 of the United
States Code, holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United
States Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo, the Owner Trustee, as lessor under the Lease, and the
Mortgagee, as assignee of Owner Trustee's rights under the Lease pursuant to
the Trust Indenture, will be entitled to the benefits of Section 1110 of Title
11 of the United States Code with respect to the Airframe and Engines delivered
on the date hereof in connection with any case commenced by or against the
Company under Chapter 11 of Title 11 of the United States Code.

8. Upon issuance, execution, authentication and delivery
of the Equipment Notes at the Closing, the Trust Indenture creates the security
interest in favor of the Mortgagee, as trustee for the benefit of the holders
of the Equipment Notes, in the Trust Indenture Estate it purports to create to
the extent that the UCC applies to a security interest in such property.

This opinion is being delivered pursuant to Section
5.1.2(xxiii)(A) of the Participation Agreement. This opinion may be relied
upon by you (and any permitted Transferee under Section 10.1.1(a) or 10.1.3 of
the Participation Agreement) in connection with the matters set forth herein
and, without our prior written consent, may not be relied upon for any other
purpose and may not be furnished to any other Person for any purpose.

Very truly yours,
166

SCHEDULE I

__________________________, as Owner Participant

First Security Bank, National Association, individually and as Owner Trustee

Wilmington Trust Company, individually, as Mortgagee, and as Loan Participant

ABN AMRO Bank N.V., Chicago Branch as Liquidity Provider

ING Bank N.V., as Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

167
EXHIBIT B

[Form of Opinion of Lessee's Legal Department]

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

To the Persons
Listed on
Schedule I Hereto

Re: Lease of Boeing Model ____________Aircraft with Manufacturer's
Serial Number and U.S. Registration Number N

Ladies and Gentlemen:

This opinion letter is being delivered by Continental Airlines,
Inc., a Delaware corporation ("Continental"), through its Legal Department in
connection with the transactions contemplated by the Participation Agreement
___ ___ dated as of ____________, among ___________________, as Owner
Participant, First Security Bank, National Association, a national banking
corporation, as Owner Trustee (the "Owner Trustee"), Wilmington Trust Company,
a Delaware banking corporation, as Mortgagee, Subordination Agent under the
Intercreditor Agreement (as defined in the Participation Agreement) and as Pass
Through Trustee under the Applicable Pass Through Trust Agreements (as defined
in the Participation Agreement) (the "Mortgagee and Loan Participant"), and
Continental, as Lessee (the "Participation Agreement"). All capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
given those terms in the Participation Agreement. This opinion letter is being
furnished to you pursuant to Section 5.1.2 (xxiii)(B) of the Participation
Agreement.

In giving the following opinions, members of Continental's Legal
Department or lawyers retained by Continental's Legal Department have reviewed
the Participation Agreement and the other Operative Agreements to which
Continental is a party and have relied upon originals, or copies certified or
otherwise identified to our satisfaction, of such records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinions expressed below. In addition,
Continental's Legal Department has assumed and has not verified the accuracy as
to factual matters of each document reviewed. As used herein, the phrase "to
our knowledge" or words of similar import shall mean to actual knowledge of
Continental's Legal Department after reasonable investigation, but shall not be
168
2

interpreted to impute knowledge of others (other than members of Continental's
Legal Department).

Based on the foregoing, and subject to the assumptions and
limitations contained herein, Continental's Legal Department is of the opinion
that:

(a) Continental is an "air carrier" within the meaning of
Section 40102 of the Act, operating under a certificate issued pursuant to
Chapter 447 of the Act, is a "citizen of the United States" as such term is
defined in Section 40102 of such Act and holds all authority, necessary
licenses and certificates under such Act and the rules and regulations
promulgated thereunder necessary for the conduct of its business and to perform
its obligations under the Participation Agreement, the Lease, the Lease
Supplement No. 1, the Purchase Agreement Assignment, the BFE ▇▇▇▇ of Sale and
the Tax Indemnity Agreement (collectively, the "Agreements").

(b) The execution, delivery and performance by Continental of
each of the Agreements do not, to our knowledge, breach or result in a default
under any indenture, mortgage, deed of trust, credit agreement, conditional
sale contract or other loan agreement to which Continental is a party or by
which Continental or its property may be bound.

(c) The execution, delivery and performance of each of the
Agreements has been duly authorized by all necessary corporate action on the
part of Continental, and each of the Agreements has been duly executed and
delivered by Continental.

(d) There are no pending or, to our knowledge, threatened
actions, suits or proceedings before any court or administrative agency or
arbitrator that question the validity of any of the Agreements or that would
have been required to be disclosed in Continental's Annual Report on Form 10-K
filed for the year ended ____________, on any subsequent Quarterly Report on
Form 10-Q or Current Report on Form 8-K, except such as are therein disclosed.

The foregoing opinions are limited to the federal law of the
United States of America (other than (i) the Act (except as expressly provided
in paragraph 1 above) or any other laws, rules or regulations governing,
regulating or relating to the acquisition, ownership, registration, use or sale
of an aircraft, airframe or aircraft engine or to the particular nature of the
equipment to be acquired by Continental, (ii) state securities or blue sky
laws, or federal securities laws, (iii) federal or state tax, antitrust or
fraudulent transfer or conveyance laws, as to which we express no opinion), the
General Corporation Law of the State of Delaware and the law of the State of
Texas.
169
3

This opinion letter is furnished to you for the purpose indicated
above, and may not be relied upon by any other Person (except any permitted
Transferee under Sections 10.1.1(a) or 10.1.3 of the Participation Agreement)
or for any other purpose without our written consent.

Very truly yours,

Continental Airlines, Inc.
Legal Department
170

SCHEDULE I

_____________________, as Owner Participant

First Security Bank, National Association, individually and as Owner Trustee

Wilmington Trust Company, individually and as Mortgagee and Loan Participant

ABN AMRO Bank N.V., as a Liquidity Provider

ING Bank N.V., as a Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

171
EXHIBIT D

[Form of Owner Trustee Counsel's Opinion]

TO EACH OF THE PARTIES SET FORTH
IN SCHEDULE A HERETO:

Re: Continental Airlines, Inc. 1997-1 Pass
Through Certificates

Dear Sir or Madam:

We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("First
Security") and in its capacity as trustee (the "Owner Trustee") under Trust
Agreement ____ dated as of ____________ (the "Trust Agreement") between it and
___________________, as beneficiary (the "Owner Participant"), in connection
with the transactions contemplated by the Participation Agreement (as defined
below). Except as otherwise defined herein, the terms used herein shall have
the meanings set forth in Annex A to the Participation Agreement ____, dated as
of __________ among Continental Airlines, Inc., the Owner Participant, First
Security, not in its individual capacity except as provided therein, and as
Owner Trustee, and Wilmington Trust Company, not in its individual capacity
except as expressly provided therein, but solely as Mortgagee, Subordination
Agent under the Intercreditor Agreement (as defined in the Participation
Agreement) and as Pass Through Trustee under the Applicable Pass Through Trust
Agreements (as defined in the Participation Agreement) (the "Participation
Agreement"). This opinion is furnished pursuant to Section 5.1.2 (xxiii)(D) of
the Participation Agreement.

We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records and other instruments
as we have deemed necessary or advisable for the purpose of rendering this
opinion.

Based upon the foregoing, we are of the opinion that:

(1) First Security is a national banking association duly organized,
validly existing and in good standing under the laws of the United States, is a
"citizen of the United States" within the meaning of Section 40102(a)(15) of
the Act and has the full power and authority to enter into and perform its
obligations under the Trust Agreement and each other Operative
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2

Agreement to which it, in its individual capacity or as Owner Trustee, as the
case may be, is a party and, as Owner Trustee, to issue, execute, and deliver
and perform the Equipment Notes.

(2) The Owner Trustee is the duly appointed trustee under the Trust
Agreement and the Trust Agreement creates a legal and valid trust under the
laws of the State of Utah; the trust created by the Trust Agreement has been
duly created and exists for the benefit of the Owner Participant, and the Trust
Agreement creates for the benefit of the Owner Participant the rights and
interests in the Trust Estate which the Trust Agreement by its terms purports
to create; and assuming the Trust Agreement was properly authorized, executed
and delivered by the Owner Participant and that the terms of the Trust
Agreement are not in violation of any laws, documents, judgments, regulations
or other provisions applicable to the Owner Participant, the Trust Agreement
constitutes, under the laws of the State of Utah, a legal, valid and binding
obligation of the Owner Participant enforceable against the Owner Participant
in accordance with its terms.

(3) The Trust Agreement, the Participation Agreement, and each other
Operative Agreement to which First Security or the Owner Trustee, as the case
may be, is a party, and the Equipment Notes, have been duly authorized,
executed and delivered by First Security, or the Owner Trustee, as the case may
be, and assuming due authorization, execution and delivery by the other parties
thereto is a legal, valid and binding obligation of First Security, or the
Owner Trustee, as the case may be, enforceable in accordance with their
respective terms.

(4) The execution and delivery by First Security of the Trust
Agreement and the Participation Agreement and the execution and delivery by the
Owner Trustee of the Operative Agreements to which it is a party is not, and
the performance by First Security, or the Owner Trustee, as the case may be, of
its respective obligations under each such agreements will not be, inconsistent
with the articles of association or by-laws of First Security, do not and will
not contravene any State of Utah or federal law, or any State of Utah or
federal governmental rule or regulation or any judgment or order of which we
have knowledge and which is applicable to it and do not and will not contravene
any provision of, or result in the creation of any lien upon any property of
First Security, or constitute a default under, any indenture, mortgage,
contract or other instrument of which we have knowledge and to which First
Security or the Owner Trustee is a party or by which either is bound or require
the consent or approval of, the giving of notice to, or the registration with,
or the taking of any action in respect of, or under federal law or the laws of
the State of Utah or any subdivision or agency thereof.

(5) There are no fees, taxes or other charges, except taxes imposed
on fees payable to First Security, required to be paid under the laws,
ordinances or regulations of the State of Utah or any political subdivision
thereof, including, without limitation, Salt Lake City, in connection with the
execution, delivery or performance by the Lessee, Owner Trustee, Mortgagee or
any Participant of the Operative Agreements solely because First Security, or
the Owner Trustee as
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3

the case may be, performs certain of its obligations under the Operative
Documents in the State of Utah.

(6) There are no pending or threatened actions or proceedings against
or affecting First Security or the Owner Trustee, as the case may be, before
any court, governmental authority or administrative agency which, if adversely
determined, could materially adversely affect the right, power or ability,
either in its individual capacity or as Owner Trustee, or both, as the case may
be, to enter into or perform its obligations under the Operative Agreements.

(7) The Trust Indenture (or financing statements or other notices
with respect thereto) has been filed for record or recorded with the Division
of Corporations and Commercial Code in the State of Utah and such offices are
all the places in the State of Utah wherein such filing or recordation is
necessary and no other actions or filings are necessary in the State of Utah to
perfect the lien and security interest of the Mortgagee in the Trust Estate as
against creditors of or purchasers from the Owner Trustee or the Lessee, or
both.

(8) The Owner Trustee has received such right, title and interest in
and to the Aircraft as was conveyed to the Owner Trustee on the date hereof,
subject to (i) the rights of the Lessee under the Lease and the Lease
Supplement; (ii) the beneficial interest of the Owner Participant in the
Aircraft; and (iii) the Lien created pursuant to the Trust Indenture and the
Trust Indenture Supplement; and to our knowledge there exist no Liens affecting
the right, title or interest of the Owner Trustee in and to the Trust Estate
resulting from claims against First Security, not related to the ownership of
the Trust Estate or the administration of the Trust Estate or any other
transaction contemplated by the Operative Agreements.

(9) Assuming that (i) the Aircraft is not physically located in the
State of Utah at the commencement or termination of the Term, (ii) in
connection with any sale of the Aircraft, such Aircraft will not be physically
delivered in the State of Utah to a buyer, and (iii) the trust created by the
Trust Agreement is treated as a grantor trust for federal income tax purposes
in accordance with Sections 671 through 678 of the Internal Revenue Code of
1986, as amended, there are no fees, taxes or other charges (except taxes
imposed on fees payable to the Owner Trustee) payable to the State of Utah or
any political subdivision thereof in connection with the execution, delivery or
performance by the Owner Trustee, the Mortgagee, the Lessee or any Participant
of the Operative Agreements or in connection with the making by the Owner
Participant of its investment in the Aircraft or its acquisition of the
beneficial interest in the Trust Estate or in connection with the issuance and
acquisition of the Equipment Notes, and neither the Owner Trustee, the Trust
Estate nor the trust created by the Trust Agreement will be subject to any fee,
tax or other governmental charge (except taxes on fees payable to the Owner
Trustee) under the laws of the State of Utah or any political subdivision
thereof on, based on or measured by, directly or indirectly, the gross
receipts, net income or value of the Trust Estate by reason of the creation or
continued existence of the trust under the terms of the Trust Agreement
pursuant to

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4

the laws of the State of Utah or the Owner Trustee's performance of its duties
under the Trust Agreement within such State.

(10) Neither a Utah court nor a federal court applying Utah law or
federal law, if properly presented with the issue and after having properly
considered such issue, would permit the Owner Participant to terminate the
Trust Agreement, except in accordance with its terms

(11) Although there is no Utah case directly on point, under the laws
of the State of Utah, so long as the Trust Agreement has not been terminated in
accordance with its terms, creditors of any person that is an Owner
Participant, holders of a lien against the assets of any such person that is an
Owner Participant, such as trustees, receivers or liquidators (whether or not
an insolvency proceeding has been commenced) (collectively the "Creditors") may
acquire valid claims and liens, as to the Trust Estate, only against the rights
of such Owner Participant under the Trust Agreement or in the Trust Estate, and
do not have, and may not through the enforcement of such Creditors' rights
acquire, any greater rights than such Owner Participant with respect to the
Trust Agreement or the Trust Estate.

The foregoing opinions are subject to the following assumptions, exception and
qualifications:

A. The foregoing opinions are limited to the laws of the State of
Utah and the federal laws of the United States of America governing the banking
and trust powers of First Security and Title 11 of the United States Code
entitled "Bankruptcy". In addition, we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended; (ii) the Federal Aviation Act of 1958, as amended (except
with respect to the opinion set forth in paragraph 1 above concerning the
citizenship of First Security); or (iii) state securities or blue sky laws.
Insofar as the foregoing opinions relate to the legality, validity, binding
effect and enforceability of the documents involved in these transactions,
which by their terms are governed by the laws of a state other than Utah, we
have assumed that such documents constitute legal, valid, binding and
enforceable agreements under the laws of such state, as to which we express no
opinion.

B. The foregoing opinions regarding enforceability of any document
or instrument are subject (i) except as otherwise set forth in the opinions in
paragraphs 10 and 11, to applicable bankruptcy, insolvency, moratorium,
reorganization, receivership and similar laws affecting the rights and remedies
of creditors generally, and (ii) general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
We call to your attention that bankruptcy courts are courts in equity with wide
discretion in applying the provisions of the Bankruptcy Code.

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5

C. As to the documents involved in these transactions, we have
assumed that each is a legal, valid and binding obligation of each party
thereto, other than First Security or the Owner Trustee, and is enforceable
against each such party in accordance with their respective terms.

D. The opinion in paragraph 1 above concerning the citizenship of
First Security is based upon the facts contained in an affidavit of First
Security, made by its authorized officer, which facts we have not independently
verified.

E. We have assumed that all signatures, other than those of the
Owner Trustee or First Security, on documents and instruments involved in these
transactions are genuine, that all documents and instruments submitted to us as
originals are authentic, and that all documents and instruments submitted to us
conform with the originals, which facts we have not independently verified.

F. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment involved in these transactions.

G. We have made no investigation of, and express no opinion
concerning, the nature of the title to any part of the equipment involved in
these transactions or the priority of any mortgage or security interest.

H. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.

I. In addition to any other limitation by operation of law upon the
scope, meaning or purpose of this opinion, this opinion speaks only as of the
date hereof. We have no obligation to advise the recipients of this opinion (or
any third party) of changes of law or fact that may occur after the date
hereof, even though the change may effect the legal analysis, a legal
conclusion or any information contained herein.

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6

J. The opinions expressed in this letter are solely for the use of
the parties which it is addressed in matters directly related to the
Participation Agreement and the transactions contemplated thereunder and these
opinions may not be relied on by any other persons or for any other purpose
without our prior written approval. The opinions expressed in this letter are
limited to the matters set forth in this letter and no other opinions should be
inferred beyond the matters expressly stated.

Very truly yours,

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7

SCHEDULE A

First Security Bank, National Association

Continental Airlines, Inc.

Wilmington Trust Company, individually and as Loan Participant and
Mortgagee

[Owner Participant]

Standard & Poor's Rating Services

▇▇▇▇▇'▇ Investors Services, Inc.

ABN AMRO Bank N.V.

ING Bank N.V.

178
EXHIBIT E

[FORM OF WTC COUNSEL'S OPINION]

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

To Each of the Parties Listed
on Schedule A Hereto

Re: Continental Airlines, Inc. - Financing of One Boeing Model
Aircraft Bearing Manufacturer's Serial Number

Ladies and Gentlemen:

We have acted as counsel to Wilmington Trust Company, a Delaware
banking corporation ("WTC"), in connection with the Trust Indenture and
Mortgage ____, dated as of ____________ (the "Trust Indenture"), between WTC,
as mortgagee (the "Mortgagee"), and First Security Bank, National Association
(the "Owner Trustee"). Pursuant to Participation Agreement ____, dated as of
___________ (the "Participation Agreement"), among Continental Airlines, Inc.,
as Lessee, _______________, as Owner Participant, the Owner Trustee and WTC, as
Mortgagee, Subordination Agent under the Intercreditor Agreement (as defined in
the Participation Agreement) and as Applicable Pass Through Trustee (as defined
in the Participation Agreement), financing is being provided for the
acquisition of one Boeing Model __________ aircraft bearing manufacturer's
serial number _______. This opinion is furnished pursuant to Section 5.1.2
(xxiii)(E) of the Participation Agreement. Capitalized terms used herein and
not otherwise defined are used as defined in Annex A to the Participation
Agreement or as defined in the Trust Indenture, except that reference herein to
any document shall mean such document as in effect on the date hereof.

We have examined originals or copies of the following documents:

(a) The Trust Indenture and the initial Trust Indenture Supplement;

(b) The Participation Agreement (the documents referred to in
paragraphs (a) and (b) above being collectively referred to as
the "Mortgagee Documents"); and

We have also examined originals or copies of such other documents and such
corporate records, certificates and other
179
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 2

statements of governmental officials and corporate officers and other
representatives of the corporations or entities referred to herein as we have
deemed necessary or appropriate for the purposes of this opinion. Moreover, as
to certain facts material to the opinions expressed herein, we have relied upon
representations and warranties contained in the documents referred to in this
paragraph.

Based upon the foregoing and upon an examination of such questions of
law as we have considered necessary or appropriate, and subject to the
assumptions, exceptions and qualifications set forth below, we advise you that,
in our opinion:

1. WTC has been duly incorporated and is validly existing in good
standing as a banking corporation under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15) of
Title 49 of the United States Code, as amended, and has full power, authority
and legal right to execute, deliver and perform its obligations under the
Mortgagee Documents and to authenticate the Equipment Notes.

2. The Mortgagee, the Subordination Agent, the Applicable Pass
Through Trustee or WTC, as the case may be, has duly authorized, executed and
delivered each Mortgagee Document to which it is party, and each such document
constitutes a legal, valid and binding obligation of the Mortgagee, the
Subordination Agent, the Applicable Pass Through Trustee or WTC, as the case
may be, enforceable against the Mortgagee, the Subordination Agent, the
Applicable Pass Through Trustee or WTC, as the case may be, in accordance with
its terms.

3. The execution, delivery and performance by the Mortgagee,
Subordination Agent, Applicable Pass Through Trustee or WTC, as the case may
be, of the Mortgagee Documents to which it is a party, the authentication by
the Mortgagee of the Equipment Notes and the consummation by the Mortgagee, the
Subordination Agent, the Applicable Pass Through Trustee or WTC, as the case
may be, of any of the transactions contemplated thereby are not in violation of
the charter or by-laws of WTC or of any law, governmental rule or regulation of
the State of Delaware or the United States governing the banking or trust
powers of WTC or, to our knowledge, any indenture, mortgage, bank credit
agreement, note or bond purchase agreement, long-term lease, license or other
agreement or instrument to which WTC is a party or by which it is bound or, to
our knowledge, any judgment or order applicable to WTC.

4. None of the execution and delivery by the Mortgagee, the
Subordination Agent, the Applicable Pass Through Trustee or WTC, as the case
may be, of the Mortgagee Documents to which it is a party, the authentication
of the Equipment Notes or the consummation of any of the transactions by the
Mortgagee, the Subordination Agent, the Applicable Pass Through Trustee or WTC,
as the case may be, contemplated thereby, requires the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action in respect of, any governmental authority or agency of the State of
Delaware or the United States governing the banking or trust powers of WTC or
under any Delaware law.
180
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 3

5. No taxes, fees or other charges (other than taxes payable by WTC
on or measured by any compensation received by WTC for its services as
Mortgagee, Subordination Agent or Applicable Pass Through Trustee) are required
to be paid by the Subordination Agent, the Applicable Pass Through Trustee or
the Mortgagee or the trust created by the Indenture under the laws of the State
of Delaware, or any political subdivision thereof, in connection with the
execution, delivery or performance of the Mortgagee Documents to which the
Mortgagee, the Subordination Agent or the Applicable Pass Through Trustee is
party and the Equipment Notes, which taxes, fees or other charges would not be
required to be paid if WTC were not a Delaware banking corporation and did not
perform its obligations as Mortgagee under the Indenture in the State of
Delaware.

6. The Equipment Notes have been duly and validly authenticated by
the Mortgagee in accordance with the Trust Indenture.

7. To our knowledge, there are no proceedings pending or threatened
against or affecting the Mortgagee, the Subordination Agent, the Applicable
Pass Through Trustee or WTC in any court or before any governmental authority,
agency, arbitration board or tribunal which, if adversely determined,
individually or in the aggregate, would materially and adversely affect the
Mortgaged Property or the right, power and authority of the Mortgagee, the
Subordination Agent, the Applicable Pass Through Trustee or WTC, as the case
may be, to enter into or perform its obligations under the Mortgagee Documents
to which is party.

The foregoing opinions are subject to the following assumptions,
exceptions and qualifications:

A. We are admitted to practice law in the State of Delaware and we
do not hold ourselves out as being experts on the law of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Delaware (and its political subdivisions to the extent set forth in paragraph
5, above) and the federal laws of the United States of America governing the
banking or trust powers of WTC, except that we express no opinion with respect
to (i) federal securities laws, including the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the Investment
Company Act of 1940, as amended, and the Trust Indenture Act of 1939, as
amended, (ii) Part A of Subtitle VII of Title 49 of the United States Code, as
amended (except with respect to the opinion set forth in paragraph 1 above
concerning the citizenship of WTC), (iii) the Federal Communications Act of
1934, as amended, (iv) state securities or blue sky laws, or (v) laws, rules
and regulations applicable to the particular nature of the equipment acquired
by the Company. Insofar as the foregoing opinions relate to the validity and
enforceability of the Mortgagee Documents expressed to be governed by the laws
of the State of New York, we have assumed that each such document is legal,
valid, binding and enforceable in accordance with its terms under such laws (as
to which we express no opinion).
181
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 4

B. The foregoing opinions regarding enforceability are subject to
(i) applicable bankruptcy, insolvency, moratorium, reorganization,
receivership, fraudulent conveyance and similar laws relating to or affecting
the enforcement of the rights and remedies of creditors generally, and (ii)
principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).

C. We have assumed that each of the parties to the Mortgagee
Documents and the Equipment Notes (except the Mortgagee, the Subordination
Agent, the Applicable Pass Through Trustee or WTC, as the case may be) has full
power, authority and legal right to execute, deliver and perform each such
document and that each such document has been duly authorized, executed and
delivered by each such party.

D. We have assumed that all signatures (other than signatures of
officers of WTC) on documents examined by us are genuine, that all documents
submitted to us as originals are authentic and that all documents submitted to
us as copies conform with the originals, which facts we have not independently
verified.

E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.

F. No opinion is expressed as to the creation, attachment,
perfection or priority of any mortgage or security interests or as to the
nature or validity of title to any part of the Mortgaged Property.

G. The opinion set forth in paragraph (1) above concerning the
citizenship of WTC is based upon an affidavit of WTC, made by one of its Vice
Presidents, the facts set forth in which we have not independently verified.

This opinion may be relied upon by you in connection with the matters
set forth herein. This opinion may also be relied upon by any transferee of a
Note Holder, subject to the understanding that the opinions expressed herein
are rendered as of the date hereof and only with respect to the laws, rules and
regulations in effect as of such date. Otherwise, without our prior written
consent, this opinion may not be relied upon by any other person or entity for
any purpose.

Very truly yours,
182

SCHEDULE A

Mortgagee
---------
Wilmington Trust Company

Loan Participant
----------------
Wilmington Trust Company

Owner Trustee
-------------
First Security Bank, National Association

Owner Participant
-----------------

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

Lessee
------
Continental Airlines, Inc.

Liquidity Providers
-------------------
ABN AMRO Bank N.V., Chicago Branch
ING Bank N.V.

Rating Agencies
---------------

Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.

183
EXHIBIT H

[Form of FAA Counsel Opinion]

______________

Re: Continental Airlines. Inc. (the "Lessee")

To the Addressees on
Exhibit A Attached Hereto

Ladies and Gentlemen:

Pursuant to Section 5.1.2(xxiii)(I) of Participation Agreement
____ dated as of _______________ (the "Participation Agreement") among the
Lessee, ___________________ as Owner Participant (the "Owner Participant"), the
Loan Participant named therein, First Security Bank, National Association, as
Owner Trustee (the "Owner Trustee") under Trust Agreement ____ dated as of
______________ (the "Trust Agreement") with the Owner Participant, and
Wilmington Trust Company, not in its individual capacity, except as expressly
provided therein but solely as Mortgagee (the "Mortgagee"), which provides for
the financing of the purchase today by the Owner Trustee of the Boeing model
_________ aircraft with manufacturer's serial number _________ and United
States nationality and registration marks N________ (the "Aircraft") and two
Rolls Royce model __________________ aircraft engines with manufacturer's
serial numbers ________ and ________ (the "Engines") and the leasing of the
Aircraft and the Engines by the Owner Trustee to the Lessee, this opinion is
rendered with respect to matters arising under that portion of Title 49 of the
United States Code (the "Transportation Code") relating to the recordation of
the instruments hereinafter described and the registration of the Aircraft
pursuant to the Transportation Code. As contemplated by the Participation
Agreement, title to the Aircraft has been conveyed by The Boeing Company to the
Owner Trustee by an AC Form 8050-2 Aircraft ▇▇▇▇ of Sale (the "FAA ▇▇▇▇ of
Sale"), the registration of the Aircraft will be accomplished by the filing
with the Federal Aviation Administration (the "FAA") of an AC Form 8050-1
Aircraft Registration Application in the name of the Owner Trustee (the
"Aircraft Registration Application"), the leasing of the Aircraft and the
Engines is pursuant to Lease Agreement ____ dated as of ____________ (the
"Lease") between the Owner Trustee and the Lessee, as supplemented by Lease
Supplement No. 1 dated this date (the "Lease Supplement"), and the creation of
a security interest in the Aircraft and the Engines is pursuant to the Trust
Indenture and Mortgage _____ dated as of _____________ (the "Trust Indenture")
between the Owner Trustee and the Mortgagee, as supplemented by Trust Indenture
and Mortgage ____ Supplement No. 1 dated this date (the "Trust Supplement").
184

Based upon our examination of the above described instruments
and of such records of the FAA as we deemed necessary to express the following
opinion and as were made available to us by the FAA, it is our opinion that:

(a) the FAA ▇▇▇▇ of Sale, the Trust Indenture with the Trust
Supplement attached and the Lease with the Lease Supplement,
the Trust Indenture and the Trust Supplement attached are in
due form for recording and have been duly filed for
recordation with the FAA pursuant to and in accordance with
the provisions of the Transportation Code today at
_____________, _____________, and _____________, respectively;

(b) the Aircraft Registration Application, to which were attached
the Affidavits of the Owner Trustee and the Owner Participant
required by Section 47.7(c)(2)(ii) of Part 47 of the Federal
Aviation Regulations, and the Trust Agreement were duly filed
with the FAA today at ________________;

(c) the Owner Trustee is the owner of legal title to the Aircraft,
and the Aircraft and the Engines are free and clear of all
Liens (as such term is defined in the Lease) except the
security interest created by the Trust Indenture, as
supplemented by the Trust Supplement, and the interests of the
parties created by the Lease, as supplemented by the Lease
Supplement;

(d) the Aircraft is eligible for registration in the name of the
Owner Trustee under the Transportation Code, and the Aircraft
will be duly registered by the FAA in the name of the Owner
Trustee in due course pursuant to and in accordance with the
provisions of the Transportation Code;

(e) the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with respect
to the Aircraft and the Engines are perfected;

(f) the Trust Indenture, as supplemented by the Trust Supplement,
constitutes a valid, duly perfected first priority mortgage
and security interest in favor of the Mortgagee, as trustee
for the benefit of the Note Holders (as such term is defined
in the Trust Indenture), in the Aircraft and the Engines and a
valid, duly perfected first priority security interest in and
collateral assignment of all of the right, title and interest
of the Owner Trustee in, to and under the Lease, as
supplemented by the Lease Supplement (insofar as such security
interest and collateral assignment affect an interest covered
by the recording system established by the FAA pursuant to
Section 44107(a) of the Transportation Code), subject only to
the Lease, as supplemented by the Lease Supplement;
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3

(g) none of the Trust Indenture, the Trust Agreement, the Trust
Supplement, the Lease or the Lease Supplement is required to
be filed or recorded in any other place within the United
States in order to perfect the mortgage and security interest
in the Aircraft and the Engines or the security interest in
and collateral assignment of the Lease, as supplemented by the
Lease Supplement (insofar as such security interest and
collateral assignment affect an interest covered by the
recording system established by the FAA pursuant to Section
44107(a) of the Transportation Code) under the applicable laws
of any jurisdiction within the United States;

(h) no other registration of the Aircraft and no filings or
recordings (other than the filings and recordings with the FAA
which have been effected) are necessary to perfect in any
jurisdiction within the United States the Owner Trustee's
title to the Aircraft, the first priority security interest
and collateral assignment created by the Trust Indenture and
the Trust Supplement in the Aircraft and the Engines and in
all right, title and interest of the Owner Trustee in and to
the Lease, as supplemented by the Lease Supplement (insofar as
such security interest and collateral assignment affect an
interest covered by the recording system established by the
FAA pursuant to Section 44107(a) of the Transportation Code);
and

(i) no authorization, approval, consent, license or order of, or
registration or filing with, or the giving of notice to, the
FAA Aircraft Registry is required for the valid authorization,
delivery or performance of the Lease, the Lease Supplement,
the Trust Agreement, the Trust Indenture and the Trust
Supplement except for such authorizations, approvals,
consents, licenses, orders, registrations, and notices as have
been effected.

No opinion is herein expressed as to: (i) laws other than the
federal laws of the United States; (ii) the validity or enforceability under
local law of the Trust Indenture, as supplemented by the Trust Supplement; or
(iii) the recognition of the perfection of the security interest and collateral
assignment created by the Trust Indenture, as supplemented by the Trust
Supplement, as against third parties in any legal proceedings outside the
United States. Since our examination was limited to records maintained by the
FAA Aircraft Registry, our opinion does not cover liens which are perfected
without the filing of notice thereof with the FAA, such as federal tax liens,
liens arising under Section 1368(a) of Title 29 of the United States Code and
possessory artisans' liens, and was subject to the accuracy of FAA personnel in
the filing, indexing and recording of instruments filed with the FAA and in the
search for encumbrance cross-reference index cards for the Engines. In
rendering this opinion, we have relied upon the opinion of the Assistant Chief
Counsel for the Aeronautical Center dated __________________ (a copy of which
is attached hereto) and upon the past practice of the FAA which is consistent
with said opinion.
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4

Although this opinion is not addressed to special counsel for
the Loan Participant, special counsel for the Owner Participant or counsel for
the Lessee, they may rely upon it as though addressed to them.

Very truly yours,

▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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5

EXHIBIT A

MORTGAGEE, SUBORDINATION AGENT
AND LOAN PARTICIPANT
------------------------------

Wilmington Trust Company

OWNER TRUSTEE
-------------

First Security Bank, National Association

OWNER PARTICIPANT
-----------------

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

LESSEE
------

Continental Airlines, Inc.

LIQUIDITY PROVIDERS
-------------------

ABN AMRO Bank, N.V., Chicago Branch

ING Bank, N.V.

RATING ENTITIES
---------------

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group
188

EXHIBIT A-2 to
Note Purchase Agreement

FORM OF LEASE
189
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***************************************************************************
* *
* CONFIDENTIAL: ANNEXES B, C AND D AND SCHEDULES 1, 2, 3 AND 4 OF THIS *
* LEASE AGREEMENT ARE SUBJECT TO RESTRICTIONS ON DISSEMINATION SET *
* FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN) *
* *
***************************************************************************

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LEASE AGREEMENT ______

Dated as of _______________

Between

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

Lessor

and

CONTINENTAL AIRLINES, INC.,

Lessee

One Boeing Model [737-524] [737-724] [757-224] Aircraft
Bearing United States Registration No. N______ and
Bearing Manufacturer's Serial No. ______ with two
[CFM MODEL 56-3-B1] [CFM MODEL 56-____]
[ROLLS-ROYCE MODEL RB211-535E4-B-37] Engines
Bearing Engine Manufacturer's Serial Nos. ______ and ______

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

The right, title and interest of Lessor in and to, among other things,
this Lease Agreement has been assigned to and is subject to a security interest
in favor of Wilmington Trust Company, a Delaware banking corporation, as
Mortgagee, under the Trust Indenture and Mortgage ______, dated as of
_______________, for the benefit of the holders of the Equipment Notes referred
to in such Trust Indenture, all to the extent provided in such Trust Indenture.
This Lease Agreement has been executed in multiple counterparts; to the extent,
if any, that this Lease Agreement constitutes chattel paper (as defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no
security interest in Lessor's right, title and interest in and to this Lease
Agreement may be perfected through the delivery or possession of any
counterpart of this Lease Agreement other than the counterpart of this Lease
Agreement that contains the original receipt executed by Wilmington Trust
Company, as Mortgagee.

LEASE AGREEMENT BASE
190
CONTENTS

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

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

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

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

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

SECTION 4. DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR;
SECTION 1110 MATTERS . . . . . . . . . . . . . . . . . . . . . 7

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

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

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

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

SECTION 7. REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND RECORDS . . 13

7.1 Registration and Operation . . . . . . . . . . . . . . . . . . 13
7.2 Possession . . . . . . . . . . . . . . . . . . . . . . . . . . 15

LEASE AGREEMENT BASE PAGE i
191

7.3 Certain Limitations on Subleasing or Other
Relinquishment of Possession . . . . . . . . . . . . . . . . . 19

SECTION 8. MAINTENANCE; REPLACEMENT AND POOLING OF
PARTS; ALTERATIONS, MODIFICATIONS AND
ADDITIONS; OTHER LESSEE COVENANTS . . . . . . . . . . . . . . 20

8.1 Maintenance; Replacement and Pooling of Parts;
Alterations, Modifications and Additions . . . . . . . . . . . 20
8.2 Information, Certificates, Notices and Reports . . . . . . . . 20

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

9.1 Right of Termination . . . . . . . . . . . . . . . . . . . . . 21
9.2 Election by Lessor to Sell . . . . . . . . . . . . . . . . . . 22
9.3 Retention of Aircraft by Lessor . . . . . . . . . . . . . . . 25

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

10.1 Event of Loss With Respect to Aircraft . . . . . . . . . . . . 26
10.2 Event of Loss With Respect to an Engine . . . . . . . . . . . 29
10.3 Conditions to any Replacement . . . . . . . . . . . . . . . . 30
10.4 Conveyance to Lessee . . . . . . . . . . . . . . . . . . . . . 32
10.5 Application of Payments . . . . . . . . . . . . . . . . . . . 32
10.6 Requisition of Aircraft for Use . . . . . . . . . . . . . . . 33
10.7 Requisition of an Engine for Use . . . . . . . . . . . . . . . 34
10.8 Application of Payments . . . . . . . . . . . . . . . . . . . 34
10.9 Application of Payments During
Existence of a Lease Event of Default . . . . . . . . . . . . 34

SECTION 11. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 35

11.1 Lessee's Obligation to Insure . . . . . . . . . . . . . . . . 35
11.2 Insurance for Own Account . . . . . . . . . . . . . . . . . . 35
11.3 Indemnification by Government in Lieu of Insurance . . . . . . 35
11.4 Application of Insurance Proceeds . . . . . . . . . . . . . . 36
11.5 Application of Payments During Existence of Default . . . . . 36

LEASE AGREEMENT BASE PAGE ii
192

SECTION 12. INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE . . . . . . . . . 37

13.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.2 Merger of Lessee . . . . . . . . . . . . . . . . . . . . . . . 38
13.3 Assignment Security for Lessor's Obligations . . . . . . . . . 39
13.4 Successor Owner Trustee . . . . . . . . . . . . . . . . . . . 39

SECTION 14. LEASE EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . 39

14.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14.2 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 40
14.3 Other Covenants . . . . . . . . . . . . . . . . . . . . . . . 40
14.4 Representations and Warranties . . . . . . . . . . . . . . . . 41
14.5 Bankruptcy and Insolvency . . . . . . . . . . . . . . . . . . 41

SECTION 15. REMEDIES AND WAIVERS . . . . . . . . . . . . . . . . . . . . . 42

15.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.2 Limitations Under CRAF . . . . . . . . . . . . . . . . . . . . 45
15.3 Right to Perform for Lessee . . . . . . . . . . . . . . . . . 46
15.4 Determination of Fair Market Rental
Value and Fair Market Sales Value . . . . . . . . . . . . . . 46
15.5 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 47

SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC. . . . . . 47

SECTION 17. RENEWAL AND PURCHASE OPTIONS . . . . . . . . . . . . . . . . . 48

17.1 Notices Generally . . . . . . . . . . . . . . . . . . . . . . 48
17.2 Renewal Options . . . . . . . . . . . . . . . . . . . . . . . 48
17.3 Purchase Option . . . . . . . . . . . . . . . . . . . . . . . 50
17.4 Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . 51

SECTION 18. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 52

18.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 52
18.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 53
18.3 Third-Party Beneficiary . . . . . . . . . . . . . . . . . . . 53
18.4 Reproduction of Documents . . . . . . . . . . . . . . . . . . 53
18.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

LEASE AGREEMENT BASE PAGE iii
193

18.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE . . . . . . . 54
18.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 55

ANNEXES, EXHIBITS AND SCHEDULES
-------------------------------
ANNEX A Definitions
ANNEX B Return Conditions
ANNEX C Maintenance
ANNEX D Insurance
EXHIBIT A Form of Lease Supplement
EXHIBIT B Form of Return Acceptance Supplement
SCHEDULE 1 Certain Terms
SCHEDULE 2 Basic Rent
SCHEDULE 3 Stipulated Loss Value Schedule
SCHEDULE 4 Termination Value Schedule
SCHEDULE 5 Permitted Countries
SCHEDULE 6 Placards

LEASE AGREEMENT BASE PAGE iv
194
LEASE AGREEMENT ______

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

RECITALS

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

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

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

SECTION 1. DEFINITIONS AND CONSTRUCTION

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

SECTION 2. DELIVERY AND ACCEPTANCE

2.1 DELIVERY AND LEASE OF AIRCRAFT

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

LEASE AGREEMENT BASE PAGE 1
195
upon acquisition of the Aircraft by Lessor pursuant to the Purchase Agreement
Assignment.

2.2 ACCEPTANCE BY LESSEE

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

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

SECTION 3. TERM AND RENT

3.1 TERM

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

3.2 RENT

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

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

LEASE AGREEMENT BASE PAGE 2
196
Payment Date, if designated as a payment in advance, in each case as specified
in Schedule 2, as such amount may be (i) adjusted pursuant to Section 3.2.1(b)
or (ii) increased in an amount equal to any increase in the amount of interest
due on the Equipment Notes on the relevant Payment Date pursuant to Section
2(e) of the Registration Rights Agreement.

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

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

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

(iii) In the event that Lessee is required to indemnify the
Owner Participant under the Tax Indemnity Agreement, then (A) in the
event that the Lessee agrees to satisfy such indemnity obligation
pursuant to SECTION __ OF THE TAX INDEMNITY AGREEMENT, the Basic Rent
percentages set forth in Schedule 2, and (B) in any event, the
Stipulated Loss Value percentages set forth in Schedule 3 and the
Termination Value percentages set forth in Schedule 4 shall be

LEASE AGREEMENT BASE PAGE 3
197
recalculated (upwards or downwards) by Owner Participant, using the same
methods and assumptions (except to the extent such assumptions shall be
varied to take into account the Loss or Foreign Tax Credit Loss (as each
such term is defined in the Tax Indemnity Agreement) that is the subject
of such indemnification and any prior or contemporaneous Loss or Foreign
Tax Credit Loss) used to calculate the Basic Rent percentages, the
Stipulated Loss Value percentages and the Termination Value percentages
on the Delivery Date, in order to (1) maintain the Owner Participant's
Net Economic Return and (2) to the extent possible consistent with
clause (1) hereof, minimize the Net Present Value of Rents to Lessee.

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

LEASE AGREEMENT BASE PAGE 4
198
(d) If Lessee believes that any calculations by Owner Participant
pursuant to Section 3.2.1(c) are in error, and if, after consultation, Lessee
and Owner Participant are unable to agree on an adjustment, then a nationally
recognized firm of accountants selected by Lessee and reasonably satisfactory
to Owner Participant shall verify such calculations. Owner Participant will
make available to such firm, but not, in any circumstances, to Lessee or any
representative of Lessee, the methodology and assumptions referred to in
Section 3.2.1(c) and any modifications thereto made to reflect the events
giving rise to adjustments hereunder (subject to the execution by such firm of
a confidentiality agreement, reasonably acceptable to Owner Participant,
prohibiting disclosure of such methodology and assumptions to any third party).
The determination by such firm of accountants shall be final. Lessee will pay
the reasonable costs and expenses of such further verification by such
accountants, provided that if it results in a decrease in Basic Rent which
decreases the remaining Net Present Value of Rents by ten or more basis points
from the remaining Net Present Value of Rents as recalculated by the Owner
Participant, then the Owner Participant will pay such costs and expenses.

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

3.2.2 SUPPLEMENTAL RENT

Lessee shall pay to Lessor, or to whosoever shall be entitled thereto,
any and all Supplemental Rent when and as the

LEASE AGREEMENT BASE PAGE 5
199
same shall become due and owing. Lessee will also pay to Lessor, or to
whosoever shall be entitled thereto as Supplemental Rent, to the extent
permitted by applicable law, interest at the Payment Due Rate on any part of
any amount of Rent (including, without limitation, Supplemental Rent) not paid
by 12:30 p.m., New York time, on the date when due (so long as, in the case of
any person not a party to the Participation Agreement, Lessee had received
timely notice of the account to which such payment was required to be made),
for the period from and including the date on which the same was due to, but
excluding, the date of payment in full.

3.3 PAYMENTS

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

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

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

LEASE AGREEMENT BASE PAGE 6
200
(d) Excluded Payments shall be paid by wire transfer of immediately
available Dollars to the account of the person specified in the Participation
Agreement or, if not so specified, to such account in the United States as may
be specified by such person by written notice to Lessor and Lessee from time to
time at least 10 Business Days prior to the date such payment is required to be
made.

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

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

4.1 DISCLAIMER

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

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

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

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

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

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

LEASE AGREEMENT BASE PAGE 7
201
4.2 CERTAIN AGREEMENTS OF LESSOR

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

4.3 QUIET ENJOYMENT

So long as no Lease Event of Default shall have occurred and be
continuing, Lessor shall not interfere with Lessee's rights hereunder to
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft during the Term.

4.4 INVESTMENT OF FUNDS HELD AS SECURITY

4.4.1 INVESTMENT

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

4.4.2 PAYMENT OF GAIN OR LOSS

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

LEASE AGREEMENT BASE PAGE 8
202
(together with any fees, commissions and other reasonable expenses, if any,
incurred in connection with such investment), such amount so paid to be held
and applied by Lessor as contemplated in Section 4.4.1 above.

4.4.3 LIMITATION OF LIABILITY

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

4.5 Title Transfers by Lessor

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

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4.6 LESSOR'S INTEREST IN CERTAIN ENGINES

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

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

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

SECTION 5. RETURN OF AIRCRAFT

5.1 COMPLIANCE WITH ANNEX B

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

5.2 STORAGE AND RELATED MATTERS

If Lessor gives written notice to Lessee not less than 60 days nor more
than 120 days prior to the end of the Term requesting storage of the Aircraft
upon its return hereunder, Lessee will provide Lessor, or cause Lessor to be
provided, with outdoor parking facilities for the Aircraft for a period up to
30 days, commencing on the date of such return, and upon request of Lessor to
Lessee made at least 10 days prior to the end of such

LEASE AGREEMENT BASE PAGE 10
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initial 30 day period, for an additional 30 day period commencing upon
expiration of such initial period, at such storage facility in the 48
contiguous states of the United States as Lessee may select. Lessee shall, at
Lessor's written request, maintain insurance (if available) for the Aircraft
during such storage period, provided that Lessor shall reimburse Lessee for
Lessee's out-of-pocket cost of providing such insurance. Such storage shall be
at Lessor's risk, and Lessor shall pay all applicable storage fees, except that
Lessee shall pay the parking fees for the initial 30 day storage period;
provided that Lessee's obligation to provide parking shall be subject to Lessor
entering into an agreement prior to the commencement of the storage period with
the storage facility providing, among other things, that Lessor shall bear all
maintenance charges and other costs (other than parking fees for the initial 30
day period) incurred.

5.3 RETURN OF OTHER ENGINES

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

5.4 FUEL

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

SECTION 6. LIENS

Lessee shall not, directly or indirectly, create, incur, assume or
suffer to exist any Lien on or with respect to the Aircraft, the Airframe, any
Engine or any Part, title to any of the foregoing or any interest of Lessee
therein, or the Lessee's

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rights in and to this Lease or any Permitted Sublease, except (a) the
respective rights of Lessor, Mortgagee, the Participants or Lessee under the
Operative Agreements, or of any Permitted Sublessee under any Permitted
Sublease; (b) Lessor Liens; (c) the rights of others under agreements or
arrangements to the extent permitted by the terms of Sections 7.2 and 7.3;
(d) Liens for Taxes of Lessee (and its U.S. federal tax law consolidated
group), or Liens for Taxes of any Tax Indemnitee (and its U.S. federal tax law
consolidated group) for which Lessee is obligated to indemnify such Tax
Indemnitee under any of the Lessee Operative Agreements, in any such case
either not yet due or being contested in good faith by appropriate proceedings
so long as such Liens and such proceedings do not involve any material risk of
the sale, forfeiture or loss of the Aircraft, the Airframe, any Engine or the
interest of any Participant therein or impair the lien of the Trust Indenture;
(e) materialmen's, mechanics', workers', repairers', employees' or other like
Liens arising in the ordinary course of business for amounts the payment of
which is either not yet delinquent for more than 60 days or is being contested
in good faith by appropriate proceedings, so long as such Liens and such
proceedings do not involve any material risk of the sale, forfeiture or loss of
the Aircraft, the Airframe, any Engine or the interest of any Participant
therein or impair the lien of the Trust Indenture; (f) Liens arising out of any
judgment or award against Lessee (or against any Permitted Sublessee), so long
as such judgment shall, within 60 days after the entry thereof, have been
discharged or vacated, or execution thereof stayed pending appeal or shall have
been discharged, vacated or reversed within 60 days after the expiration of
such stay, and so long as during any such 60-day period there is not, or any
such judgment or award does not involve, any material risk of the sale,
forfeiture or loss of the Aircraft, the Airframe, any Engine or the interest of
any Participant therein or impair the lien of the Trust Indenture, and (g) any
other Lien with respect to which Lessee (or any Permitted Sublessee) shall have
provided a bond, cash collateral or other security adequate in the reasonable
opinion of Lessor. Lessee shall promptly take (or cause to be taken) such
action as may be necessary duly to discharge (by bonding or otherwise) any Lien
not excepted above if the same shall at any time arise in respect of the
Aircraft, the Airframe, any Engine or any Part during the Term.

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

7.1 REGISTRATION AND OPERATION

7.1.1 REGISTRATION AND RECORDATION

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

7.1.2 REREGISTRATION

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

7.1.3 MARKINGS

If permitted by applicable Law, on or reasonably promptly after the
Delivery Date, Lessee will cause to be affixed to, and maintained in, the
cockpit of the Airframe and on each Engine, in each case, in a clearly visible
location (it being understood that the location of such placards, as identified
to the Owner Participant prior to the Delivery Date, shall be deemed to be in

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compliance with this requirement), a placard of a reasonable size and shape
bearing the legend, in English, set forth in Schedule 6. Such placards may be
removed temporarily, if necessary, in the course of maintenance of the Airframe
or Engines. If any such placard is damaged or becomes illegible, Lessee shall
promptly replace it with a placard complying with the requirements of this
Section 7.1.3.

7.1.4 COMPLIANCE WITH LAWS

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

7.1.5 OPERATION

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

LEASE AGREEMENT BASE PAGE 14
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navigational error, hijacking, weather condition or other similar unforeseen
circumstances, so long as Lessee diligently and in good faith proceeds to
remove the Aircraft from such area.

7.2 POSSESSION

7.2.1 INTERCHANGE AND POOLING

Subject or permit any Permitted Sublessee to subject any Engine to
normal interchange agreements or pooling agreements or arrangements, in each
case customary in the commercial airline industry and entered into by Lessee or
such Permitted Sublessee, as the case may be, in the ordinary course of
business; provided, however, that if Lessor's title to any such Engine is
divested under any such agreement or arrangement, then such Engine shall be
deemed to have suffered an Event of Loss as of the date of such divestiture,
with the effect that Lessee shall be required to replace such Engine with a
Replacement Engine meeting the requirements of, and in accordance with,
Section 10.

7.2.2 TESTING AND SERVICE

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

7.2.3 TRANSFER TO U.S. GOVERNMENT

Transfer or permit any Permitted Sublessee to transfer possession of the
Aircraft, Airframe or any Engine to the U.S. Government, in which event Lessee
shall promptly notify Lessor

LEASE AGREEMENT BASE PAGE 15
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and Mortgagee in writing of any such transfer of possession and, in the case of
any transfer pursuant to CRAF, in such notification shall identify by name,
address and telephone numbers the Contracting Office Representative or
Representatives for the Military Airlift Command of the United States Air Force
to whom notices must be given and to whom requests or claims must be made to
the extent applicable under CRAF.

7.2.4 INSTALLATION OF ENGINES ON OWNED AIRCRAFT

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

7.2.5 INSTALLATION OF ENGINES ON OTHER AIRFRAMES

Install or permit any Permitted Sublessee to install an Engine on an
airframe leased to Lessee or such Permitted Sublessee, or purchased by Lessee
or such Permitted Sublessee subject to a mortgage, security agreement,
conditional sale or other secured financing arrangement, but only if (a) such
airframe is free and clear of all Liens, except (i) the rights of the parties
to such lease, or any such secured financing arrangement, covering such
airframe and (ii) Liens of the type permitted by clauses (a) and (b) of Section
7.2.4 and (b) Lessee or Permitted Sublessee, as the case may be, shall have
received from the lessor, mortgagee, secured party or conditional seller, in
respect of such airframe, a written agreement (which may be a copy of the
lease, mortgage, security agreement, conditional sale or other agreement
covering such airframe), whereby such Person agrees that it will not acquire or
claim any right, title or interest in, or Lien on, such Engine by reason of
such Engine being installed on such airframe at any time while such Engine is
subject to this Lease or is owned by Lessor.

7.2.6 INSTALLATIONS OF ENGINES ON FINANCED AIRCRAFT

Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, leased to Lessee or such
Permitted Sublessee, or

LEASE AGREEMENT BASE PAGE 16
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purchased by Lessee or such Permitted Sublessee subject to a conditional sale
or other security agreement under circumstances where neither Section 7.2.4 or
7.2.5 is applicable; provided, however, that any such installation shall be
deemed an Event of Loss with respect to such Engine, and Lessee shall comply
with Section 10.2 hereof in respect thereof.

7.2.7 SUBLEASING

With respect to the Aircraft, Airframe or any Engine, enter into a
sublease with any Permitted Air Carrier, but only if:

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

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

(c) Any such sublease (i) shall not extend beyond the expiration of
the Basic Term or any Renewal Term then in effect unless Lessee shall have
irrevocably committed to purchase the Aircraft, (ii) shall include provisions
for the maintenance, operation, possession, inspection and insurance of the
Aircraft that are the same in all material respects as the applicable
provisions of this Lease and (iii) shall be expressly subject and subordinate
to all the terms of this Agreement and to the rights, powers and remedies of
Lessor hereunder, including, without limitation, Lessor's rights under Section
15 to repossess the Aircraft, Airframe and Engines and to terminate such
sublease upon the occurrence of a Lease Event of Default;

(d) In connection with a sublease to a Permitted Foreign Air Carrier,
(1) the United States maintains diplomatic relations with the country of
domicile of such Permitted Foreign Air Carrier (or, in the case of Taiwan,
diplomatic relations at least as good as those in effect on the Delivery Date)
and (2) Lessee shall have furnished Lessor and Mortgagee a favorable opinion of
counsel, reasonably satisfactory to Lessor, in the country of

LEASE AGREEMENT BASE PAGE 17
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domicile of such Permitted Foreign Air Carrier, that (i) the terms of such
sublease are the legal, valid and binding obligations of the parties thereto
enforceable under the laws of such jurisdiction, (ii) it is not necessary for
Owner Participant, Lessor or Mortgagee to register or qualify to do business in
such jurisdiction, if not already so registered or qualified, as a result, in
whole or in part, of the proposed sublease, (iii) Lessor's title to, and
Mortgagee's Lien in respect of, the Aircraft, Airframe and Engines will be
recognized in such jurisdiction, (iv) the Laws of such jurisdiction of domicile
require fair compensation by the government of such jurisdiction, payable in a
currency freely convertible into Dollars, for the loss of title to the
Aircraft, Airframe or Engines in the event of the requisition by such
government of such title (unless Lessee shall provide insurance in the amounts
required with respect to hull insurance under Section 11 covering the
requisition of title to the Aircraft, Airframe or Engines by the government of
such jurisdiction so long as the Aircraft, Airframe or Engines are subject to
such sublease) and (v) the agreement of such Permitted Air Carrier that its
rights under the sublease are subject and subordinate to all the terms of this
Lease is enforceable against such Permitted Air Carrier under applicable law;

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

(f) All necessary documents shall have been duly filed, registered or
recorded in such public offices as may be required fully to preserve the title
of Lessor, and the first priority security interest (subject to Permitted
Liens) of Mortgagee, in the Aircraft, Airframe and Engines;

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

(h) For all purposes of this Section 7.2.7, the term "sublease" shall
be deemed to include interchange agreements with respect to the Aircraft or
Airframe; and

LEASE AGREEMENT BASE PAGE 18
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(i) No such sublease shall be made to a Permitted Foreign Air Carrier
prior to the close of the Tax Attribute Period, unless Lessee prepays on a
lump-sum basis any liability due under the Tax Indemnity Agreement as a result
of such sublease based upon the assumption that such sublease were to continue
for the remainder of the term of such sublease.

7.3 CERTAIN LIMITATIONS ON SUBLEASING OR OTHER RELINQUISHMENT OF
POSSESSION

Notwithstanding anything to the contrary in Section 7.2:

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

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

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

(d) Any event that constitutes or would, with the passage of time,
constitute an Event of Loss under paragraph (c), (d), or (e) of the definition
of such term (as set forth in Annex A) shall not be deemed to violate the
provisions of Section 7.2; and

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

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

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

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

8.2 INFORMATION, CERTIFICATES, NOTICES AND REPORTS

8.2.1 FINANCIAL INFORMATION

Lessee will furnish to Lessor:

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

(b) Within 120 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as of the end of such fiscal
year and related statements of income and cash flows of Lessee
for such fiscal year, in comparative form with the preceding
fiscal year, prepared in accordance with GAAP, together with a
report of Lessee's independent certified public accountants with
respect to their audit of such financial statements; provided
that so long as Lessee is subject to the reporting requirements
of the Securities Exchange Act of 1934, a copy of Lessee's report
on Form 10-K for such fiscal year (excluding exhibits) will
satisfy this paragraph (b).

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8.2.2 ANNUAL CERTIFICATE

Within 120 days after the close of each fiscal year of Lessee, Lessee
shall deliver to Lessor and Mortgagee an Officer's Certificate of Lessee to the
effect that such officer is familiar with or has reviewed or caused to be
reviewed the relevant terms of this Lease and the other Lessee Operative
Agreements and that such officer does not have knowledge of the existence as at
the date of such certificate of any Lease Event of Default.

8.2.3 INFORMATION FOR FILINGS

Lessee shall promptly furnish to Owner Participant or Lessor such
information (other than with respect to the citizenship of Owner Participant
and Lessor) within Lessee's or any Permitted Sublessee's possession, or
reasonably available to or obtainable by Lessee or such Permitted Sublessee, as
may be required to enable Lessor timely to file any reports required to be
filed by it as lessor under the Lease or to enable Owner Participant to timely
file any reports required to be filed by it, as the beneficiary of the Trust
Estate, in either case, with any Government Entity because of, or in connection
with, the interest of Owner Participant or Lessor in the Aircraft, Airframe or
Engines, this Lease or any other part of the Trust Estate; provided, however,
that with respect to any such information which Lessee reasonably deems
commercially sensitive or confidential, Owner Participant or Lessor, as the
case may be, shall afford Lessee a reasonable opportunity to seek from any such
Government Entity a waiver of the obligation of Owner Participant or Lessor to
file any such information, or shall consent to the filing of such information
directly by Lessee in lieu of filing by Owner Participant or Lessor, and if any
such waiver or consent is evidenced to the reasonable satisfaction of Owner
Participant or Lessor, as the case may be, then Lessee shall not be required to
furnish such information to Owner Participant or Lessor.

SECTION 9. VOLUNTARY TERMINATION UPON OBSOLESCENCE

9.1 RIGHT OF TERMINATION

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

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

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

(b) Lessor shall notify Lessee and Mortgagee of Lessor's intention to
sell or retain the Aircraft, as provided in this Section 9, no less than 30
days after Lessee gives Lessor written notice pursuant to Section 9.1(a)(ii).
Any failure by Lessor to give such notice of its election shall be deemed to be
an election to sell the Aircraft, as provided in this Section 9.

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

9.2 ELECTION BY LESSOR TO SELL

9.2.1 BIDS; CLOSING OF SALE

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

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amount and terms of such bid, the proposed date of such sale and the name and
address of the person submitting such bid.

9.2.2 CLOSING OF SALE

(a) On the proposed Termination Date (i) Lessee shall deliver the
Airframe and Engines or engines constituting part of the Aircraft to the
bidder, if any, which shall have submitted the highest cash bid on or before
the date ten Business Days prior to such Termination Date, in the same manner
as if delivery were made to Lessor pursuant to Section 5 and Annex B and in
full compliance with the terms thereof, and shall duly transfer to Lessor title
to any such engines not owned by Lessor, all in accordance with the terms of
Section 5 and Annex B, and (ii) Lessor shall simultaneously therewith transfer
the Airframe and Engines or engines to such bidder, in the manner described in
Section 4.5, against cash paid to Lessor in the amount of such highest bid and
in the manner and in funds of the type specified in Section 3.3.

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

(i) all unpaid Basic Rent due at any time prior to such
Termination Date; plus

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

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

As a further condition precedent to such sale and delivery, Lessee shall
pay all Supplemental Rent due by Lessee to Lessor, Mortgagee or the
Participants under this Lease (including, without limitation, (A) Supplemental
Rent in respect of Make-Whole Amount, if any, payable pursuant to Section
2.10(b) of the Trust Indenture in connection with a prepayment of the Equipment

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Notes upon such sale, (B) all interest charges provided for hereunder or under
any other Lessee Operative Agreement with respect to the late payment of any
amounts so payable, and (C) the reasonable out-of-pocket fees and expenses
incurred by Lessor, Mortgagee and Owner Participant in connection with such
termination and sale).

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

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

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

(d) A sale of the Aircraft pursuant to this Section 9.2.2 shall take
place only on a Termination Date. Subject to Section 9.3, if no sale shall
have occurred on or as of the proposed Termination Date, this Agreement shall
continue in full force and effect, and all of Lessee's obligations shall
continue, including, without limitation, its obligation to pay Rent, in each
case, as if the notice under Section 9.1 shall not have been given and, subject
to Section 9.2.3(b), Lessee may give another notice pursuant to Section 9.1.

9.2.3 WITHDRAWAL OF NOTICE OF TERMINATION

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

(b) Lessee shall pay all reasonable out-of-pocket fees and expenses
of Lessor, Mortgagee and Owner Participant in connection with any notice of
termination withdrawn by Lessee or in connection

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with any notice of termination pursuant to which a sale of the Aircraft fails
to occur.

9.3 RETENTION OF AIRCRAFT BY LESSOR

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

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

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

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

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

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

(iv) Lessee shall also pay all Supplemental Rent due and
payable by Lessee to Lessor, Mortgagee or the other Participants under
this Lease (other than any Supplemental Rent in respect of Make-Whole
Amount, if any, payable pursuant to Section 2.10(b) of the Trust
Indenture in connection with a prepayment of the Equipment Notes upon
such sale), including without limitation all interest charges provided
for hereunder or under any other Lessee

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Operative Agreement with respect to the late payment of any amounts, so
payable, and the reasonable out-of-pocket fees and expenses incurred by
Lessor, Mortgagee and Owner Participant in connection with such
termination and sale.

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

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

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

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.

10.1 EVENT OF LOSS WITH RESPECT TO AIRCRAFT

10.1.1 NOTICE AND ELECTION

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

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

(c) For purposes of Section 10.1.2, an Event of Loss with respect to
the Airframe shall be deemed to constitute an Event of

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Loss with respect to the Aircraft. For purposes of Section 10.1.3, any Engine
not actually suffering an Event of Loss shall not be required to be replaced.

10.1.2 PAYMENT OF LOSS AND TERMINATION OF LEASE

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

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

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

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

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

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

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

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thereafter at the Payment Due Rate to the date of payment
of such amounts in full;

provided that, in the event that the Commencement Date or a Payment Date
shall occur (x) on or after the Stipulated Loss Value Date used in the
foregoing clause (1) for the computation of unpaid Rent, and (y) on or
before the date of payment of the amounts specified above in this
subparagraph (i), then Lessee shall pay the Interim Rent, Basic Rent or
the Renewal Rent, as the case may be, due on such Commencement Date or
Payment Date, and thereupon such amounts payable under this subparagraph
(i) shall be reduced by the amount of such payment of Interim Rent,
Basic Rent or Renewal Rent, as the case may be; and

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

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

10.1.3 REPLACEMENT OF AIRFRAME AND ENGINES

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

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Section 10.3, then Lessee shall be deemed to have initially made the election
set forth in Section 10.1.2 with the effect that Lessee shall immediately pay,
in the manner and in funds of the type specified in Section 3.3, the amounts
required under, and in accordance with, Section 10.1.2.

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

10.2 EVENT OF LOSS WITH RESPECT TO AN ENGINE

10.2.1 NOTICE

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

10.2.2 REPLACEMENT OF ENGINE

Lessee shall, promptly and in any event within 60 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Engine with respect to
which any Event of Loss occurred, title to a Replacement Engine free and clear
of all Liens other than Permitted Liens. Such Replacement Engine shall be an
engine manufactured by Engine Manufacturer that is the same model as the Engine
to be replaced thereby, or an improved model, and that is suitable for
installation and use on the Airframe, and that has a value, utility and
remaining useful life (without regard to hours and cycles remaining until
overhaul) at least equal to the Engine to be replaced thereby (assuming that
such Engine had been maintained in accordance with the Lease).

LEASE AGREEMENT BASE PAGE 29
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10.2.3 ENGINE EXCHANGE

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

10.3 CONDITIONS TO ANY REPLACEMENT

10.3.1 DOCUMENTS

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

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

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

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

(d) furnish an opinion or opinions of Lessee's counsel (which may be
Lessee's legal department) reasonably satisfactory to Lessor and addressed to
Lessor and Mortgagee to the effect that (i) such full warranty ▇▇▇▇ of sale
referred to in

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Section 10.3.1(a) constitutes an effective instrument for the conveyance of
title to the Replacement Airframe or Replacement Engine and (ii) in the case of
a Replacement Airframe, Lessor and Mortgagee, as assignee of Lessor, will be
entitled to the benefits of Section 1110 with respect to the Replacement
Airframe, provided that such opinion referred to in this clause (ii) need not
be delivered to the extent that immediately prior to such replacement the
benefits of Section 1110 were not, solely by reason of a change in law or court
interpretation thereof, available to Lessor or Mortgagee, as assignee of
Lessor;

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

(f) with respect to any Replacement Airframe, furnish an opinion of
tax counsel, selected by Owner Participant and reasonably satisfactory to
Lessee, as to the federal income tax consequences (without any requirement as
to the nature of such Federal income tax consequences) to Lessor and Owner
Participant of any such replacement;

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

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

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10.3.2 OTHER OBLIGATIONS

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

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

10.4 CONVEYANCE TO LESSEE

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

10.5 APPLICATION OF PAYMENTS

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

10.5.1 REPLACEMENT OF AIRFRAME AND ENGINES

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

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amounts are received, such amounts shall be paid over to, or retained by,
Lessee.

10.5.2 LOSS OF ENGINE

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

10.5.3 PAYMENT OF LOSS

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

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

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

10.6 REQUISITION OF AIRCRAFT FOR USE

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

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Loss had occurred as of the end of the Term. If Lessor shall not have elected
to treat such event as an Event of Loss, Lessee shall be obligated to return
the Airframe and Engines or engines to Lessor pursuant to, and in all other
respects to comply with the provisions of, Section 5 promptly upon their return
by such Government Entity, and Lessee shall pay to Lessor upon such return an
amount equal to the average daily Basic Rent payable by Lessee during the Term
for each day after the end of the Term to but excluding the day of such return,
up to a maximum of 30 days.

10.7 REQUISITION OF AN ENGINE FOR USE

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

10.8 APPLICATION OF PAYMENTS

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

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

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given notice to Lessee that the Trust Indenture has been duly discharged) as
security for the obligations of Lessee under this Lease and the other Lessee
Operative Agreements and shall be invested pursuant to Section 4.4 hereof
unless and until Lessor shall have demanded liquidated damages pursuant to
Section 15.1.3 or 15.1.4 and such amount is applied, at the option of Lessor,
or upon the written request of Lessee to Lessor, from time to time during the
continuance of a Lease Event of Default, to Lessee's obligations under this
Lease as and when due, it being understood that any such application shall be
made to such obligations of Lessee as Lessor may determine in its sole
discretion. At such time as there shall not be continuing any Special Default,
such amount shall be paid to Lessee to the extent not previously applied in
accordance with this Section 10.9.

SECTION 11. INSURANCE

11.1 LESSEE'S OBLIGATION TO INSURE

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

11.2 INSURANCE FOR OWN ACCOUNT

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

11.3 INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE

Lessor agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft described in Annex D, indemnification from, or
insurance provided by, the U.S. Government, or upon the written consent of
Lessor, other Government Entity, against such risk in an amount that, when
added to the amount of insurance (including permitted self-insurance), if any,
against such risk that Lessee (or any Permitted Sublessee) may continue to
maintain, in accordance with

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this Section 11, during the period of such requisition or transfer, shall be at
least equal to the amount of insurance against such risk otherwise required by
this Section 11.

11.4 APPLICATION OF INSURANCE PROCEEDS

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

11.5 APPLICATION OF PAYMENTS DURING EXISTENCE OF DEFAULT

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

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SECTION 12. INSPECTION

(a) At all reasonable times Lessor, Mortgagee or the Owner
Participant, and their respective authorized representatives (the "Inspecting
Parties") may (not more than once every 12 months unless a Lease Event of
Default has occurred and is continuing then such inspection right shall not be
so limited) inspect the Aircraft, Airframe and Engines (including, without
limitation, the Aircraft Documents) and any such Inspecting Party may make
copies of such Aircraft Documents not reasonably deemed confidential by Lessee
or such Permitted Sublessee.

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

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

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

SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE

13.1 IN GENERAL

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

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13.2 MERGER OF LESSEE

13.2.1 IN GENERAL

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

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

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

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

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

13.2.2 EFFECT OF MERGER

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

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13.3 ASSIGNMENT SECURITY FOR LESSOR'S OBLIGATIONS

In order to secure the indebtedness evidenced by the Equipment Notes,
Lessor has agreed in the Trust Indenture, among other things, to assign to
Mortgagee this Lease and to mortgage the Aircraft, Airframe and Engines in
favor of Mortgagee, subject to the reservations and conditions therein set
forth. Lessee hereby accepts and consents to the assignment of all Lessor's
right, title and interest in and to this Lease pursuant to the terms of the
Trust Indenture. In accordance with Section 3.3(c), Lessee agrees to pay
directly to Mortgagee (or, after receipt by Lessee of notice from Mortgagee of
the discharge of the Trust Indenture, to Lessor), all amounts of Rent (other
than Excluded Payments) due or to become due hereunder and assigned to
Mortgagee and Lessee agrees that Mortgagee's right to such payments hereunder
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, the circumstances set forth in
Section 16 hereof. Notwithstanding the foregoing assignment of this Lease,
the obligations of Lessee to Lessor to perform the terms and conditions of this
Lease shall remain in full force and effect.

13.4 SUCCESSOR OWNER TRUSTEE

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

SECTION 14. LEASE EVENTS OF DEFAULT

The occurrence of any one or more of the following circumstances,
conditions, acts or events, for any reason whatsoever and whether any such
circumstance, condition, act or

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event shall be voluntary or involuntary or come about or be effected by
operation of Law or pursuant to or in compliance with any judgment, decree,
order, rule or regulation of any Government Entity, shall constitute a Lease
Event of Default so long as it shall not have been remedied:

14.1 PAYMENTS

Lessee shall fail to pay any amount of Interim Rent, Basic Rent, Renewal
Rent, Stipulated Loss Value or Termination Value within ten (10) Business Days
after the same shall have become due; or Lessee shall fail to pay any
Supplemental Rent (other than Stipulated Loss Value or Termination Value) when
due and such failure shall continue for a period in excess of ten (10) Business
Days from and after the date of any written notice to Lessee from Lessor of the
failure to make such payment when due; provided that any such failure to pay
any Excluded Payment shall not constitute a Lease Event of Default until
written notice is given by the Owner Participant to Lessee and Mortgagee that
such failure constitutes a Lease Event of Default and such failure shall have
continued for a period in excess of ten (10) Business Days after such notice.

14.2 INSURANCE

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

14.3 OTHER COVENANTS

Lessee shall fail to observe or perform (or caused to be observed and
performed) in any material respect any other covenant, agreement or obligation
set forth herein or in any other Lessee Operative Agreement (other than the
covenants, agreements and obligations set forth in the Tax Indemnity
Agreement), and such failure shall continue unremedied for a period of 30 days
from and after the date of written notice thereof to Lessee from Lessor or
Mortgagee, unless such failure is capable of being corrected and Lessee shall
be diligently proceeding to correct such failure, in which case there shall be
no Lease Event of Default unless and until such failure shall continue
unremedied for a period of 180 days after receipt of such notice.

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14.4 REPRESENTATIONS AND WARRANTIES

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

14.5 BANKRUPTCY AND INSOLVENCY

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

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

(c) a petition against Lessee in a case under any bankruptcy Laws or
other insolvency Laws (as in effect at such time) is filed and not withdrawn or
dismissed within 90 days thereafter, or if, under the provisions of any Law
providing for

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reorganization or winding-up of corporations which may apply to Lessee, any
court of competent jurisdiction assumes jurisdiction, custody or control of
Lessee or of substantially all of its property and such jurisdiction, custody
or control remains in force unrelinquished, unstayed and unterminated for a
period of 90 days.

SECTION 15. REMEDIES AND WAIVERS

15.1 REMEDIES

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

15.1.1 RETURN AND REPOSSESSION

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

15.1.2 SALE AND USE

Lessor may sell the Airframe and/or any Engine at public or private
sale, at such times and places, and to such Persons (including Lessor,
Mortgagee or any Participant), as Lessor may determine; or Lessor may otherwise
dispose of, hold, use, operate, lease to others or keep idle the Airframe
and/or any Engine, as Lessor, in its sole discretion, may determine, all free
and clear of any rights of Lessee and without any duty to account to Lessee
with respect to such action or inaction or for any proceeds with respect
thereto, except as hereinafter set forth in this Section 15, and except to the
extent that such proceeds would constitute, under applicable Law, a mitigation
of Lessor's damages suffered or incurred as a result of the subject

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Lease Event of Default. Lessor shall give Lessee at least 15 days prior
written notice of the date fixed for any public sale of the Airframe and/or any
Engine or of the date on or after which will occur the execution of any
contract providing for any private sale.

15.1.3 CERTAIN LIQUIDATED DAMAGES

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

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

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

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

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

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

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

15.1.4 LIQUIDATED DAMAGES UPON SALE

If Lessor, pursuant to Section 15.1.2 or applicable Law, shall have sold
the Airframe and/or any Engine, Lessor, in lieu of exercising its rights under
Section 15.1.3 with respect to the Aircraft, Airframe or any Engine, as the
case may be, may, if Lessor shall so elect, upon giving written notice to
Lessee, demand Lessee to pay Lessor, and Lessee shall pay to Lessor, on the
date of such sale and in the manner and in funds of the type specified in
Section 3.3, as liquidated damages for loss of a bargain and not as a penalty
(in lieu of the Interim Rent, Basic Rent or Renewal Rent, as the case may be,
for the Aircraft in respect of all periods commencing on or after the date of
such sale), the following amounts:

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

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

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principal amount of the Equipment Notes at the rate per annum
borne thereby from and including the Stipulated Loss Value Date
used in the foregoing clause (a) for the computation of unpaid
Rent to the date of such sale; plus

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

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

15.1.5 RESCISSION

Lessor may (i) at its option, rescind or terminate this Lease as to the
Aircraft, Airframe or any Engine, or any Part thereof, or (ii) exercise any
other right or remedy that may be available to it under applicable Law or
proceed by appropriate court action to enforce the terms hereof.

15.1.6 OTHER REMEDIES

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

15.2 LIMITATIONS UNDER CRAF

Notwithstanding the provisions of Section 15.1, during any period that
the Aircraft, Airframe or any Engine is subject to

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

15.3 RIGHT TO PERFORM FOR LESSEE

If Lessee (i) fails to make any payment of Rent required to be made by
it hereunder or (ii) fails to perform or comply with any of its agreements
contained herein and such failure continues for a period of thirty days after
written notice thereof is given by Lessor or Mortgagee to Lessee, Lessor or
Mortgagee may (but shall not be obligated to) make such payment or perform or
comply with such agreement, and the amount of such payment and the amount of
the expenses of Lessor or Mortgagee incurred in connection with such payment or
the performance of or compliance with such agreement, as the case may be,
together with interest thereon at the Payment Due Rate, shall be deemed
Supplemental Rent, payable by Lessee upon demand by Lessor or Mortgagee,
whichever is entitled thereto. No such payment, performance or compliance
shall be deemed to cure any Lease Default or Lease Event of Default or
otherwise relieve Lessee of its obligations with respect thereto.

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

For the purpose of this Section 15, the "Fair Market Rental Value" or
the "Fair Market Sales Value" of the Aircraft, Airframe or any Engine, shall be
determined on an "as is, where is" basis and shall take into account customary
brokerage and other out-of-pocket fees and expenses which typically would be
incurred in connection with a re-lease or sale of the Aircraft, Airframe or any
Engine. Any such determination shall be made by an Appraiser

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selected by Lessor and the costs and expenses associated therewith shall be
borne by Lessee, unless Lessor does not obtain possession of the Aircraft,
Airframe and Engines pursuant to this Section 15, in which case an Appraiser
shall not be appointed and Fair Market Rental Value and Fair Market Sales Value
for purposes of this Section 15 shall be zero.

15.5 REMEDIES CUMULATIVE

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

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

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

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

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

SECTION 17. RENEWAL AND PURCHASE OPTIONS

17.1 NOTICES GENERALLY

(a) At least 120 days prior to the Scheduled Expiration Date or, if a
Renewal Lease Term is then in effect, prior to the Scheduled Renewal Term
Expiration Date of such Renewal Lease Term, Lessee may provide notice to Lessor
that Lessee may exercise either the option to extend the leasing of the
Aircraft for a Renewal Lease Term pursuant to Section 17.2 or the option to
purchase the Aircraft on the Scheduled Expiration Date or Scheduled Renewal
Term Expiration Date of such Renewal Lease Term, as the case may be, pursuant
to Section 17.3 (a "Preliminary Notice").

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

17.2 RENEWAL OPTIONS

17.2.1 RENEWAL NOTICE

(a) If Lessee has given a Preliminary Notice, as specified in
Section 17.1, and subject to the terms and conditions of this Section 17.2,
Lessee may exercise its option to extend the

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

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

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

(ii) Any Renewal Notice shall be revocable by Lessee until 10
Business Days after the Renewal Rent is determined in accordance with
Sections 17.2.2 and unless revoked by written notice by Lessee to Lessor
shall thereafter become irrevocable and shall constitute an
unconditional obligation of Lessee to extend the leasing of the Aircraft
hereunder for the Renewal Lease Term to which such Renewal Notice
relates.

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

17.2.2 RENEWAL RENT

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

(b) The Renewal Rent payable by Lessee on each Payment Date during
any Fixed Renewal Lease Term shall be the lower of (i) an amount equal to one-
half of the average of the semiannual Basic Rent amounts payable during the
Base Lease Term and(ii) the Fair Market Rental Value of the Aircraft for such
Renewal Lease Term. The Renewal Rent payable by Lessee on each Payment Date
during any Subsequent Renewal Lease Term shall be the Fair Market Rental

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Value of the Aircraft for such Renewal Lease Term. Any such Fair Market Rental
Value shall be determined not more than 120 days and not less than 100 days
prior to the date of commencement of such Renewal Lease Term by mutual
agreement of Lessor and Lessee or, if they shall be unable to agree, by an
appraisal in accordance with Section 17.4.

17.2.3 STIPULATED LOSS AND TERMINATION VALUES

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

(b) Stipulated Loss Value and Termination Value amounts that are
payable during any such Renewal Lease Term shall be determined at the same time
that the Renewal Rent for such Renewal Lease Term is determined under
Section 17.2.2. Stipulated Loss Values and Termination Values for any such
Renewal Lease Term shall, commencing on the first day of such Renewal Lease
Term, be equal to the Fair Market Sales Value of the Aircraft, computed as of
the first day of such Renewal Lease Term, and shall decline ratably on a
monthly basis to the Fair Market Sales Value of the Aircraft as of the last day
of such Renewal Lease Term.

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

17.3 PURCHASE OPTION

17.3.1 PURCHASE NOTICE

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

(b) Lessee may exercise such option to purchase the Aircraft, by
delivery of a notice (a "Purchase Notice") to Lessor

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not less than 90 days prior to the Purchase Date specified in such Purchase
Notice.

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

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

17.3.2 DETERMINATION OF FAIR MARKET SALES VALUE

The Fair Market Sales Value of the Aircraft shall be determined not more
than 120 days and not less than 100 days prior to the applicable Purchase Date
by mutual agreement of Lessor and Lessee or, if they shall be unable to agree,
by an appraisal in accordance with Section 17.4.

17.3.3 TITLE

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

17.4 APPRAISALS

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Appraiser appointed shall be final. If two Appraisers are appointed and within
7 days after the appointment of the latter of such two Appraisers, they cannot
agree upon such amount, such two Appraisers shall, within 8 days after such
latter appointment, appoint a third Appraiser and such amount shall be
determined by such three Appraisers, who shall make their separate appraisals
within 7 days following the appointment of the third Appraiser, and any
determination so made shall be conclusive and binding upon Lessor and Lessee.
If no such third Appraiser is appointed within such 8-day period, either Lessor
or Lessee may apply to the American Arbitration Association to make such
appointment, and both parties shall be bound by such appointment. The
foregoing appraisal procedure shall in any event be completed no less than 125
days before the end of the Base Lease Term or the current Renewal Lease Term,
as the case may be. If three Appraisers are appointed and the difference
between the determination which is farther from the middle determination and
the middle determination is more than 125% of the difference between the middle
determination and the third determination, then such farther determination
shall be excluded, the remaining two determinations shall be averaged and such
average shall be final and binding upon Lessor and Lessee. Otherwise, the
average of all three determinations shall be final and binding upon Lessor and
Lessee. The fees and expenses of all such Appraisers and such appraisal
procedure shall be borne equally by Lessee and Lessor, provided that if Lessee
elects not to renew this Lease or purchase the Aircraft following the
conclusion of such appraisal, Lessee shall pay all expenses of such appraisal.

SECTION 18. MISCELLANEOUS

18.1 AMENDMENTS

No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate or otherwise vary and is signed by Lessor and Lessee. Each such
amendment, supplement, waiver, modification, discharge, termination or variance
shall be effective only in the specific instance and for the specific purpose
for which it is given. No provision of this Agreement shall be varied or
contradicted by oral communication, course of dealing or performance or other

LEASE AGREEMENT BASE PAGE 52
246
manner not set forth in an agreement, document or instrument in writing and
signed by Lessor and Lessee.

18.2 SEVERABILITY

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

18.3 THIRD-PARTY BENEFICIARY

This Agreement is not intended to, and shall not, provide any person not
a party hereto (other than Mortgagee, the Participants, the Indenture
Indemnitees and the Persons referred to in Section 4.6) with any rights of any
nature whatsoever against either of the parties hereto, and no person not a
party hereto (other than Mortgagee, the Participants, the Indenture Indemnitees
and the Persons referred to in Section 4.6) shall have any right, power or
privilege in respect of, or have any benefit or interest arising out of, this
Agreement.

18.4 REPRODUCTION OF DOCUMENTS

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

LEASE AGREEMENT BASE PAGE 53
247
business) and any enlargement, facsimile or further reproduction of such
reproduction likewise is admissible in evidence.

18.5 COUNTERPARTS

This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument.

18.6 NOTICES

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

18.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

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

LEASE AGREEMENT BASE PAGE 54
248
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT.

(c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 18.7. EACH PARTY HERETO HEREBY AGREES
THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH
THIS SECTION 18.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE
UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF
ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT
IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY
JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.

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

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

18.8 ENTIRE AGREEMENT

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

[This space intentionally left blank.]

LEASE AGREEMENT BASE PAGE 55
249
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.

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

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

CONTINENTAL AIRLINES, INC.,
as Lessee

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

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

WILMINGTON TRUST COMPANY,
as Mortgagee

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

LEASE AGREEMENT BASE PAGE 56
250
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.

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

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

CONTINENTAL AIRLINES, INC.,
as Lessee

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

LEASE AGREEMENT BASE PAGE 57

ANNEX A
[SEE PARTICIPATION AGREEMENT ANNEX A]

ANNEXES B-D
[INTENTIONALLY OMITTED]

251
EXHIBIT A - LEASE SUPPLEMENT
LEASE AGREEMENT __

LEASE SUPPLEMENT NO.__

LEASE SUPPLEMENT No. __, dated ________, 199_, between FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Owner Trustee under the Trust Agreement
_____, dated as of _____________, with the Owner Participant named therein
(such Owner Trustee, in its capacity as such Owner Trustee being herein called
"Lessor"), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
("Lessee").

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

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

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

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

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

EXHIBIT A TO LEASE AGREEMENT BASE PAGE 1
252
(i) Airframe: U.S. Registration No. ___________;
manufacturer's serial no. ___________; and

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

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

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

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

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

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

[This space intentionally left blank.]

EXHIBIT A TO LEASE AGREEMENT BASE PAGE 2
253
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.

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

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

CONTINENTAL AIRLINES, INC.,
as Lessee

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

EXHIBIT A TO LEASE AGREEMENT BASE PAGE 3
254
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.

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

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

CONTINENTAL AIRLINES, INC.,
as Lessee

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

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

WILMINGTON TRUST COMPANY,
as Mortgagee

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

EXHIBIT A TO LEASE AGREEMENT BASE PAGE 4
255
EXHIBIT B - LEASE SUPPLEMENT
LEASE AGREEMENT __

RETURN ACCEPTANCE SUPPLEMENT

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

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

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

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

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

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

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

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

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

EXHIBIT B TO LEASE AGREEMENT BASE PAGE 1
256
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return
Acceptance Supplement to be duly executed as of the day and year first above
written.

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

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

CONTINENTAL AIRLINES, INC.,
as Lessee

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

EXHIBIT B TO LEASE AGREEMENT BASE PAGE 2

SCHEDULES 1-4

[INTENTIONALLY OMITTED]

257
SCHEDULE 5 - PERMITTED COUNTRIES
LEASE AGREEMENT __

PERMITTED COUNTRIES

Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile Peoples Republic of China
Denmark Philippines
Egypt Portugal
Ecuador Republic of China (Taiwan)
Finland Singapore
France South Africa
Germany South Korea
Greece Spain
Hungary Sweden
Iceland Switzerland
India Thailand
Indonesia Tobago
Ireland Trinidad
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia

SCHEDULE 5 TO LEASE AGREEMENT BASE PAGE 1
258
SCHEDULE 6 - PLACARDS
LEASE AGREEMENT __

PLACARDS

Leased from

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

and
Mortgaged to

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

SCHEDULE 6 TO LEASE AGREEMENT BASE PAGE 1
259
EXHIBIT A-3 to
Note Purchase Agreement

FORM OF LEASED AIRCRAFT INDENTURE

260
Exhibit A-3
to the Note Purchase Agreement

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

TRUST INDENTURE AND MORTGAGE ___

Dated as of ____________, 199_

Between

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,

Owner Trustee

and

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

Mortgagee

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

EQUIPMENT NOTES COVERING
ONE BOEING ________ AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ N_____
LEASED BY CONTINENTAL AIRLINES, INC.

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

261
TABLE OF CONTENTS

Page
----

GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE I

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE II

THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02. Issuance and Terms of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.03. Payments from Trust Indenture Estate Only . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.06. Termination of Interest in Trust Indenture Estate . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.07. Registration Transfer and Exchange of Equipment Notes . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.13. Option to Purchase Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.14. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . . . . . . . . . . . . 25

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

(i)
262

Page
----

ARTICLE IV

COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE . . . . . . . . . . . . . . . . . . . . 32

SECTION 4.01. Covenants of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.03. Certain Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.05. Return of Aircraft, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.10. Mortgagee Authorized to Execute Bills of Sale, Etc. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 42

ARTICLE V

DUTIES OF THE MORTGAGEE . . . . . . . . . . . . . . . . . . . . . . 42

SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.02. Action Upon Instructions; Certain Rights and Limitations . . . . . . . . . . . . . . . . . . . 43
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.05. No Action Except Under Lease, Trust Indenture or Instructions . . . . . . . . . . . . . . . . 47
SECTION 5.06. Replacement Airframes and Replacement Engines . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.07. Indenture Supplements for Replacements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.09. Investment of Amounts Held by Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE VI

THE OWNER TRUSTEE AND THE MORTGAGEE . . . . . . . . . . . . . . . . . . . 49

SECTION 6.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.03. No Representations or Warranties as to Aircraft or Documents . . . . . . . . . . . . . . . . . 50
SECTION 6.04. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.06. Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.08. Instructions from Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

(ii)
263

Page
----

ARTICLE VII

INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE . . . . . . . . . . . . . . . . 52

SECTION 7.01. Scope of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE VIII

SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . . 53

SECTION 8.01. Notice of Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.02. Resignation of Mortgagee; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.03. Appointment of Additional and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE IX

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . 56

SECTION 9.01. Instructions of Majority; Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.02. Trustees Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.03. Documents Mailed to Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Indenture Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

ARTICLE X

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 10.01. Termination of Trust Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note Holders . . . . . . . . . . . . . . . . . . 60
SECTION 10.03. Sale of Aircraft by Mortgagee Is Binding . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee, Mortgagee,
Owner Participant, Note Holders and the other
Indenture Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.05. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.07. No Oral Modification or Continuing Waivers . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.09. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.10. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.11. Governing Law; Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.12. Voting By Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.13. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

(iii)
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EXHIBIT A Form of Trust Indenture and Mortgage Supplement

SCHEDULE I Equipment Notes Amortization and Interest Rates

(iv)
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TRUST INDENTURE AND MORTGAGE ___

TRUST INDENTURE AND MORTGAGE ___, dated as of ___________, 199_
("Trust Indenture"), between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely
as Mortgagee hereunder (together with its successors hereunder, the
"Mortgagee").

W I T N E S S E T H

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

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

WHEREAS, the parties hereto desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate
hereunder, among other things, of all of the Owner Trustee's right, title and
interest in and to the Aircraft and, except as hereinafter expressly provided,
all of the Owner Trustee's right, title and interest in, to and under the Lease
and the Participation Agreement and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof or thereof, as
security for, among other things, the Owner Trustee's and the Lessee's
obligations to the Noteholders and the Indenture Indemnitees;

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

WHEREAS, all things necessary to make this Trust Indenture the valid,
binding and legal obligation of the Owner Trustee for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed
and have happened;
266
GRANTING CLAUSE

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

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

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267
(2) All right, title, interest, claims and demands of the Owner
Trustee, as Lessor, in, to and under the Lease, together with all rights,
powers, privileges, options and other benefits of the Owner Trustee as lessor
under the Lease, including the immediate and continuing right to receive and
collect all Rent, income, revenues, issues, profits, insurance proceeds,
condemnation awards and other payments, tenders and security now or hereafter
payable to or receivable by the Lessor under the Lease pursuant thereto, and,
subject to Section 5.02 hereof, the right to make all waivers and agreements,
to give and receive copies of all notices and other instruments or
communications, to accept surrender or redelivery of the Aircraft or any part
thereof, as well as all the rights, powers and remedies on the part of the
Owner Trustee as Lessor under the Lease, to take such action upon the
occurrence of a Lease Event of Default thereunder, including the commencement,
conduct and consummation of legal, administrative or other proceedings, as
shall be permitted by the Lease or by Law, and to do any and all other things
whatsoever which the Owner Trustee or any lessor is or may be entitled to do
under or in respect of the Lease and any right to restitution from the Lessee
or any other Person in respect of any determination of invalidity of the Lease;

[(3) Each Permitted Sublease assignment and each assigned Permitted
Sublease (to the extent assigned under such Permitted Sublease assignment), and
including, without limitation, all rents or other payments of any kind made
under such assigned Permitted Sublease (to the extent assigned under such
Permitted Sublease assignment);](1)

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

(a) the Purchase Agreement and the GTA;

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

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

together with all rights, powers, privileges, licenses, easements, options and
other benefits of the Owner Trustee under each contract, agreement and
instrument referred to in this clause [(3)/(4)],

__________________________________

(1) Insert bracketed language if the Lease provides for an assignment of a
permitted sublease.

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including the right to receive and collect all payments to the Owner Trustee
thereunder now or hereafter payable to or receivable by the Owner Trustee
pursuant thereto and, subject to Section 5.02 hereof, the right to make all
waivers and agreements, to give and receive notices and other instruments or
communications, or to take any other action under or in respect of any thereof
or to take such action upon the occurrence of a default thereunder, including
the commencement, conduct and consummation of legal, administrative or other
proceedings, as shall be permitted thereby or by Law, and to do any and all
other things which the Owner Trustee is or may be entitled to do thereunder and
any right to restitution from the Lessee, the Owner Participant or any other
Person in respect of any determination of invalidity of any thereof;

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

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

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

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

[(8)/(9)] All proceeds of the foregoing;

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

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

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Purchase Agreement Assignment), the Purchase Agreement Assignment, with the
Consent and Agreement and the Engine Consent and Agreement attached thereto.

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

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

The Owner Trustee does hereby constitute the Mortgagee the true and
lawful attorney of the Owner Trustee, irrevocably, granted for good and
valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner Trustee or
otherwise) to ask for, require, demand, receive, compound and give acquittance
for any and all monies and claims for monies (in each case including insurance
and requisition proceeds but in all cases excluding Excluded Payments) due and
to become due under or arising out of the Indenture Agreements, and all other
property which now or hereafter constitutes part of the Trust Indenture Estate,
to endorse any checks or other instruments or orders in connection therewith
and to file any claims or to take any action or to institute any proceedings
which the Mortgagee may deem to be necessary or advisable in the premises.
Without limiting the generality of the foregoing, but subject to the rights of
the Owner Trustee and the Owner Participant under Sections 2.13, 4.03 and
4.04(a) hereof, during the continuance of any Event of Default under this Trust
Indenture, the Mortgagee shall have the right under such power of attorney to
accept any offer in connection with the exercise of remedies as set forth
herein of any purchaser to purchase the Airframe and Engines and upon such
purchase to execute

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and deliver in the name of and on behalf of the Owner Trustee an appropriate
▇▇▇▇ of sale and other instruments of transfer relating to the Airframe and
Engines, when purchased by such purchaser, and to perform all other necessary
or appropriate acts with respect to any such purchase, and in its discretion to
file any claim or take any other action or proceedings, either in its own name
or in the name of the Owner Trustee or otherwise, which the Mortgagee may deem
necessary or appropriate to protect and preserve the right, title and interest
of the Mortgagee in and to such Rents and other sums and the security intended
to be afforded hereby; provided, however, that no action of the Mortgagee
pursuant to this paragraph shall increase the obligations or liabilities of the
Owner Trustee to any Person beyond those obligations and liabilities
specifically set forth in this Trust Indenture and in the other Operative
Agreements. Under the Lease, Lessee is directed, so long as this Trust
Indenture shall not have been fully discharged, to make all payments of Rent
(other than Excluded Payments) and all other amounts which are required to be
paid to or deposited with the Owner Trustee pursuant to the Lease (other than
Excluded Payments) directly to, or as directed by, the Mortgagee at such
address or addresses as the Mortgagee shall specify, for application as
provided in this Trust Indenture. The Owner Trustee agrees that promptly upon
receipt thereof, it will transfer to the Mortgagee any and all monies from time
to time received by it constituting part of the Trust Indenture Estate, for
distribution by the Mortgagee pursuant to this Trust Indenture, except that the
Owner Trustee shall accept for distribution pursuant to the Trust Agreement any
amounts distributed to it by the Mortgagee under this Trust Indenture.

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

The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the
Lien hereof shall not have been released pursuant to Section 10.01 hereof, any
of its right, title or interest hereby assigned, to anyone other than the
Mortgagee, and that it will not, except as otherwise provided in this Trust
Indenture and except with respect to Excluded Payments to which it is entitled,
(i) accept any payment from Lessee [or any Permitted Sublessee](1) under any
Indenture Agreement, (ii) enter into any agreement amending or supplementing
any Indenture Agreement, (iii) execute any waiver or modification of, or
consent under, the terms of, or exercise any rights, powers or

__________________________________

(2) Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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privileges under, any Indenture Agreement, (iv) settle or compromise any claim
arising under any Indenture Agreement or (v) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.

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

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

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

It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall ipso facto, and without any other conveyance, assignment or
act on the part of the Owner Trustee or the Mortgagee, become and be subject to
the Lien herein granted as fully and completely as though specifically
described herein, but nothing contained in this paragraph shall be deemed to
modify or change the obligations of the Owner Trustee contained in the
foregoing paragraphs.

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

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

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

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ARTICLE I

DEFINITIONS

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

ARTICLE II

THE EQUIPMENT NOTES

SECTION 2.01. FORM OF EQUIPMENT NOTES

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

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

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT ___
DATED AS OF _______________, 199_.

SERIES [_____] LIMITED RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION
WITH THE BOEING MODEL _______ AIRCRAFT BEARING UNITED STATES REGISTRATION
NUMBER N_____.

No. ____ Date: [__________,____]

$_______________________

INTEREST RATE MATURITY DATE

[___________] [____________]

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FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement ___, dated as of ____________,
199_, between the Owner Participant named therein and First Security Bank,
National Association (herein as such Trust Agreement may be supplemented or
amended from time to time called the "Trust Agreement"), hereby promises to pay
to __________________, or the registered assignee thereof, the principal sum of
$____________ (the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time (calculated on the basis
of a year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Debt Rate. The Original
Amount of this Equipment Note shall be payable in installments on the dates set
forth in Schedule I hereto equal to the corresponding percentage of the
Original Amount of this Equipment Note set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semiannual installments
commencing on _____________, 199_, and thereafter on April 1 and October 1 of
each year, to and including _______________. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount sufficient
to discharge in full the unpaid Original Amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment Note.
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day and if such payment is made on such
next succeeding Business Day, no interest shall accrue on the amount of such
payment during such extension.

For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage ___, dated as of _____________, 199_, between the Owner
Trustee and Wilmington Trust Company (the "Mortgagee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.

This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not paid
when due (whether at stated maturity, by acceleration or otherwise).

The interest rate borne by this Equipment Note shall be subject to
adjustments to the extent, and under the circumstances, specified by the
Registration Rights Agreement.

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

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

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

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Original Amount of this Equipment Note then due, third, to the payment of Make-
Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and fourth, the balance, if any, remaining thereafter, to the
payment of installments of the Original Amount of this Equipment Note remaining
unpaid in the inverse order of their maturity.

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

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

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

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

__________________________________

(3) To be inserted in the case of a Series B Equipment Note.

(4) To be inserted in the case of a Series C Equipment Note.

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Note is issued subject to such provisions. The Note Holder of this Equipment
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Mortgagee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Trust Indenture and (c) appoints the Mortgagee his attorney-in-
fact for such purpose.]*

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

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

* * *

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

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

By __________________________
Name:
Title:

MORTGAGEE'S CERTIFICATE OF AUTHENTICATION

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

WILMINGTON TRUST COMPANY, as
Mortgagee

By____________________________
Name:
Title:

__________________________________

* To be inserted for each Equipment Note other than any Series A Equipment
Note.

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SCHEDULE I

EQUIPMENT NOTE AMORTIZATION

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

[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]

* * *

SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES

The Equipment Notes shall be dated the date of issuance thereof, shall
be issued in three separate series consisting of Series A, Series B and Series
C and in the maturities and principal amounts and shall bear interest as
specified in Schedule I hereto. On the date of the consummation of the
Transaction, each Equipment Note shall be issued to the Subordination Agent on
behalf of the Pass Through Trustees under the Pass Through Trust Agreements.
The Equipment Notes shall be issued in registered form only. The Equipment
Notes shall be issued in denominations of $1,000 and integral multiples
thereof, except that one Equipment Note of each Series may be in an amount that
is not an integral multiple of $1,000.

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

The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) to the extent not payable (whether or
not in fact paid) under Section 6(a) of the Note Purchase Agreement (as
originally in effect or amended with the consent of the Owner Participant), an
amount equal to the fees payable to the relevant Liquidity Provider under
Section 2.03 of each Liquidity Facility and the related Fee Letter (as defined
in the Intercreditor Agreement) multiplied by a fraction the numerator of which
shall be the then outstanding aggregate principal amount of the Series A
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal amount
of all "Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement); (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) (x) the amount equal to
interest on any Non-Extension Advance (other than any Applied Non-Extension
Advance) payable under Section 3.07(a)(i) of each Liquidity Facility minus
Investment Earnings from such Non-Extension Advance multiplied by (y) the
fraction specified in the foregoing clause (i); and (iv) if any payment default
shall have occurred and be continuing with respect to interest on any Series A
Equipment Note, Series B Equipment Note or Series C Equipment Note, (x) the
excess, if any, of (1) the amount equal to interest on any Unpaid Advance,
Applied Downgrade Advance or Applied Non-Extension Advance payable under
Section 3.07(a)(i) of each Liquidity Facility over (2) the sum of Investment
Earnings from any Final Advance plus any amount of interest at the Payment Due
Rate actually payable (whether or not in fact paid) by the Owner Trustee on the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Downgrade Advance or Applied Non-

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Extension Advance was made multiplied by (y) a fraction the numerator of which
shall be the then aggregate overdue amounts of interest on the Series A
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes (other
than interest becoming due and payable solely as a result of acceleration of
any such Equipment Notes) and the denominator of which shall be the then
aggregate overdue amounts of interest on all "Series A Equipment Notes",
"Series B Equipment Notes" and "Series C Equipment Notes" (each as defined in
the Note Purchase Agreement) (other than interest becoming due and payable
solely as a result of acceleration of any such "Equipment Notes"). For
purposes of this paragraph, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Cash Collateral Account", "Downgrade Advance", "Final
Advance", "Investment Earnings", "Non-Extension Advance" and "Unpaid Advance"
shall have the meanings specified in each Liquidity Facility or the
Intercreditor Agreement referred to therein.

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

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

SECTION 2.03. PAYMENTS FROM TRUST INDENTURE ESTATE ONLY

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Agreement, (i) the obligation to make all payments of the Original Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with respect
to the Equipment Notes, and the performance by the Owner Trustee of every
obligation or covenant contained in this Trust Indenture and in the
Participation Agreement or any of the other Operative Agreements, shall be
payable only from the income and proceeds from the Trust Estate to the extent
included in the Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate to enable the Mortgagee to make
such payments in accordance with the terms of Article III hereof, and all of
the statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Trust Indenture and any
agreement referred to herein other than the Trust Agreement, unless expressly
otherwise stated, are made and intended only for the purpose of binding the
Trust Estate and establishing the existence of rights and remedies which can be
exercised and enforced against the Trust Estate; therefore, anything contained
in this Trust Indenture or such other agreements to the contrary
notwithstanding (except for any express provisions or representations that the
Owner Trustee is responsible for, or is making, in its individual capacity, for
which there would be personal liability of the Owner Trustee), no recourse
shall be had with respect to this Trust Indenture or such other agreements
against the Owner Trustee in its individual capacity or against any institution
or person which becomes a successor trustee or co-trustee or any officer,
director, trustee, servant or direct or indirect parent or controlling Person
or Persons of any of them, and (ii) none of the Owner Trustee, in its
individual capacity, the Owner Participant, the Mortgagee and any officer,
director, trustee, servant, employee, agent or direct or indirect parent or
controlling Person or Persons of any of them shall have any personal liability
for any amounts payable hereunder, under the Participation Agreement or any of
the other Operative Agreements or under the Equipment Notes except as expressly
provided herein, in the Lease or in the Participation Agreement; provided,
however, that nothing contained in this Section 2.03(a) shall be construed to
limit the exercise and enforcement in accordance with the terms of this Trust
Indenture or such other agreements of rights and remedies against the Trust
Indenture Estate.

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

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on account of clause (ii) above, then such Note Holder or the Mortgagee, as the
case may be, shall promptly refund to the Owner Trustee (in its individual
capacity) or the Owner Participant (whichever shall have made such payment)
such Excess Amount.

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

SECTION 2.04. METHOD OF PAYMENT

(a) The Original Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 12:30
p.m., New York City time, on the due date of payment to the Mortgagee at the
Corporate Trust Office for distribution among the Note Holders in the manner
provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, the Mortgagee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder's Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed pursuant
to Article III of this Trust Indenture) by transferring, or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 2:00 p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United States
the amount to be distributed to such holder, for credit to the account of such
holder maintained at such bank. If the Mortgagee shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, the Mortgagee, in its
individual capacity and not as trustee, agrees to compensate such holders for
loss of use of funds at Debt Rate until such payment is made and the Mortgagee
shall be entitled to any interest earned on such funds until such payment is
made. Any payment made hereunder shall be made without any presentment or
surrender of any Equipment Note, except that, in the case of the final payment
in respect of any Equipment Note, such Equipment Note shall be surrendered to
the Mortgagee for cancellation promptly after such payment. Notwithstanding
any other provision of this Trust Indenture to the contrary, the Mortgagee
shall not be required to make, or cause to be made, wire transfers as aforesaid
prior to the first Business Day on which it is practicable for the Mortgagee to
do so in

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view of the time of day when the funds to be so transferred were received by it
if such funds were received after 12:30 p.m., New York City time, at the place
of payment. Prior to the due presentment for registration of transfer of any
Equipment Note, the Owner Trustee and the Mortgagee shall deem and treat the
Person in whose name any Equipment Note is registered on the Equipment Note
Register as the absolute owner and holder of such Equipment Note for the
purpose of receiving payment of all amounts payable with respect to such
Equipment Note and for all other purposes, and none of the Owner Trustee or the
Mortgagee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of such
Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Mortgagee
consistent with this Section 2.04.

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

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

Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Mortgagee to withhold taxes in the manner
provided for herein or for any false, inaccurate or untrue evidence provided
by any Note Holder hereunder.

SECTION 2.05. APPLICATION OF PAYMENTS

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

First: to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and to the extent permitted by Law, any overdue interest
and any other overdue amounts thereunder) to the date of such payment;

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

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

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

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

SECTION 2.06. TERMINATION OF INTEREST IN TRUST INDENTURE ESTATE

No Note Holder nor any other Indenture Indemnitee shall, as such, have
any further interest in, or other right with respect to, the Trust Indenture
Estate when and if the Original Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under all Equipment Notes held by such Note
Holder and all other sums then due and payable to such Note Holder, such
Indenture Indemnitee or the Mortgagee hereunder (including, without limitation,
under the third paragraph of Section 2.02 hereof) and under the other Operative
Agreements by the Owner Trustee and the Lessee (collectively, the "Secured
Obligations") shall have been paid in full.

SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES

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

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

If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft.
If the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be
furnished to the Owner Trustee. If the Equipment Note being replaced has been
destroyed, lost or stolen, the holder of such Equipment Note shall furnish to
the Owner Trustee and the Mortgagee such security or indemnity as may be
required by them to save the Owner Trustee and the Mortgagee harmless and
evidence satisfactory to the Owner Trustee and the Mortgagee of the
destruction, loss or theft of such Equipment Note and of the ownership thereof.
If a "qualified institutional buyer" of the type referred to in paragraph
(a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a "QIB")
is the holder of any such destroyed, lost or stolen Equipment Note, then the
written indemnity of such QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Lessee, Owner
Trustee and Mortgagee shall be accepted as satisfactory indemnity and security
and no further indemnity or security shall be required as a condition to the
execution and delivery of such new Equipment Note. Subject to compliance by
the Note Holder of the requirements set forth in this Section 2.08, Mortgagee
and Owner Trustee shall use all reasonable efforts to issue new Equipment Notes
within 10 Business Days of the date of the written request therefor from the
Note Holder.

SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION

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

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

SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES

(a) On the date on which Lessee is required pursuant to Section 10.1.2
of the Lease to make payment for an Event of Loss with respect to the Aircraft,
all of the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Original Amount thereof, together with all accrued
interest thereon to the date of redemption and all other

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Secured Obligations owed or then due and payable to the Note Holders but
without Make-Whole Amount.

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

SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES

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

SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION

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

(b) Notice of redemption or purchase with respect to the Equipment
Notes shall be given by the Mortgagee by first-class mail, postage prepaid,
mailed not less than 25 nor more than 60 days prior to the applicable
redemption date, to each Note Holder of such Equipment Notes to be redeemed or
purchased, at such Note Holder's address appearing in the Equipment Note
Register; provided that, in the case of a redemption to be made pursuant to
Section 2.10(b) or Section 2.11, such notice shall be revocable and shall be
deemed revoked in the event that the Lease does not in fact terminate on the
specified termination date or if notice of such redemption shall have been
given in connection with a refinancing of Equipment Notes and the Mortgagee
receives written notice of such revocation from the Lessee or the Owner Trustee
not later than three days prior to the redemption date. All notices of
redemption shall state: (1) the redemption date, (2) the applicable basis for
determining the redemption price, (3) that on the

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redemption date, the redemption price will become due and payable upon each
such Equipment Note, and that, if any such Equipment Notes are then
outstanding, interest on such Equipment Notes shall cease to accrue on and
after such redemption date, and (4) the place or places where such Equipment
Notes are to be surrendered for payment of the redemption price.

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

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

SECTION 2.13. OPTION TO PURCHASE EQUIPMENT NOTES

The Owner Trustee and the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.13, purchase all but not less than all of the Equipment Notes outstanding
hereunder, and each Note Holder agrees that it will, upon such events and
subject to such terms and conditions and upon receipt of such price, sell,
assign, transfer and convey to such purchaser or its nominee (without recourse
or warranty of any kind except against Liens on such Equipment Notes arising
by, through or under such holder), all of the right, title and interest of such
Note Holder in and to the Equipment Notes held by it, and such purchaser or its
nominee shall assume all of such holder's obligations under the Participation
Agreement and hereunder.

Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant at any time following the occurrence of
any of the following events, and in any such event the purchase price thereof
shall equal for each Equipment Note, the aggregate unpaid Original Amount
thereof, plus accrued and unpaid interest thereon to, but not

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including, the date of purchase and all other Secured Obligations owed, or then
due and payable hereunder, to the holder thereof (including under the third
paragraph of Section 2.02 hereof). Such option to purchase the Equipment Notes
may be exercised (x) upon a Mortgagee Event or (y) in the event there shall
have occurred and be continuing a Lease Event of Default or (z) upon either the
Equipment Notes becoming due and payable pursuant to Section 4.04(b) hereof or
the Mortgagee taking action or notifying the Owner Trustee that it intends to
take action to foreclose the Lien of this Trust Indenture or otherwise commence
the exercise of any significant remedy under this Trust Indenture or the Lease,
provided that if such option is exercised pursuant to clause (y) at a time when
there shall have occurred and be continuing for less than 120 days a Lease
Event of Default, the purchase price thereof shall equal the price provided in
the preceding sentence plus the Make-Whole Amount, if any.

Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant giving irrevocable written notice of its
election of such option to the Mortgagee, which notice shall specify a date for
such purchase within 15 days of the date of such notice. The Mortgagee shall
not exercise any of the remedies hereunder and, without the consent of the
Owner Trustee or the Owner Participant, under the Lease, during the period from
the date of the giving of such notice until the date on which such purchase is
required to occur pursuant to the terms of the preceding sentence.

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

SECTION 2.14. SUBORDINATION

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

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

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hereof) and will forthwith turn over such payment to the Mortgagee in the form
received to be applied as provided in Article III hereof.

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

ARTICLE III

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

SECTION 3.01. BASIC RENT DISTRIBUTION

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

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

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

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aggregate amount of the payments then due under all Series B
Equipment Notes; and

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

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

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

OPTIONAL REDEMPTION

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

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Indenture Indemnitees under this Trust Indenture, the Participation
Agreement or the Equipment Notes;

Second,

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

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

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

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

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

SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT

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

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

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

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in full as aforesaid, then ratably, without priority of one over
the other, in the proportion that the aggregate unpaid Original
Amount of all Series A Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due hereunder or
thereunder (other than Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original Amount of all
Series A Equipment Notes held by all such holders plus the accrued
but unpaid interest and other amounts due thereon (other than
Make-Whole Amount) to the date of distribution;

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

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

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

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

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

SECTION 3.04. CERTAIN PAYMENTS

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

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

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

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

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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SECTION 3.05. OTHER PAYMENTS

Any payments received by the Mortgagee for which no provision
as to the application thereof is made in the Lease, the Participation
Agreement, elsewhere in this Trust Indenture or in any other Operative
Agreement shall be distributed by the Mortgagee to the extent received or
realized at any time (i) prior to the payment in full of all Secured
Obligations due the Note Holders, in the order of priority specified in Section
3.01 hereof subject to the proviso thereto, and (ii) after payment in full of
all Secured Obligations, in the following order of priority:

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

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

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

SECTION 3.06. PAYMENTS TO OWNER TRUSTEE

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

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ARTICLE IV

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

SECTION 4.01. COVENANTS OF OWNER TRUSTEE

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

(a) the Owner Trustee will duly and punctually pay the
Original Amount of, Make-Whole Amount, if any, and interest on and
other amounts due under the Equipment Notes and hereunder in
accordance with the terms of the Equipment Notes and this Trust
Indenture and all amounts, if any, payable by it to the Note Holders
under the Participation Agreement or Section 9 of the Lease;

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

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

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

(e) except with the consent of the Mortgagee (acting pursuant
to instructions given in accordance with Section 9.01 hereof) or as
provided in Sections 2 and 11 of the Participation Agreement, the
Owner Trustee will not contract for, create, incur, assume or

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suffer to exist any Debt, and will not guarantee (directly or
indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing, or
otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other
person; and

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

SECTION 4.02. EVENT OF DEFAULT

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

(a) any Lease Event of Default (provided that any such Lease
Event of Default caused solely by a failure of Lessee to pay to the
Owner Trustee or the Owner Participant when due any amount that is
included in the definition of Excluded Payments shall not constitute
an Event of Default unless notice is given by the Owner Trustee to the
Mortgagee that such failure shall constitute an Event of Default); or

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

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

(d) any representation or warranty made by the Owner
Participant or the Owner Trustee in the Participation Agreement or
this Trust Indenture or in any certificate

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

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

(f) if at any time when the Aircraft is registered under the
Laws of the United States, the Owner Participant shall not be a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Part A of Subtitle VII of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, and as the result thereof the registration of the Aircraft under
the Federal Aviation Act, and regulations then applicable thereunder,
shall cease to be effective; provided that no Event of Default shall
be deemed to have occurred under this paragraph (f) unless such
circumstances continue unremedied for more than 30 days after the
Owner Participant has Actual Knowledge of the state of facts that
resulted in such ineffectiveness and of such loss of citizenship; or

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

SECTION 4.03. CERTAIN RIGHTS

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

If as a result of the occurrence of an Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease, the
Mortgagee shall have insufficient funds to make any payment of Original Amount
and interest on any Equipment Note on the day

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

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

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

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obtaining and enforcing a judgment against the Lessee for the payment of such
amount or taking appropriate action in a pending action at law against the
Lessee (provided, that at no time while an Event of Default shall have occurred
and be continuing shall any such demand be made or shall any such action be
commenced (or continued) and any amounts nevertheless received by the Owner
Trustee in respect thereof shall be held in trust for the benefit of, and
promptly paid to, the Mortgagee for distribution as provided in Section 3.03
hereof).

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

SECTION 4.04. REMEDIES

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

Anything in this Trust Indenture to the contrary
notwithstanding, the Mortgagee shall not be entitled to exercise any remedy
hereunder as a result of an Event of Default which arises solely by reason of
one or more events or circumstances which constitute a Lease Event of Default
unless the Mortgagee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the dispossessory
remedies provided for in Section 15

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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of the Lease with respect to the Aircraft; provided, however, that such
requirement to exercise one or more of such remedies under the Lease shall not
apply in circumstances where the Mortgagee is, and has been, for a continuous
period in excess of 60 days or such other period as may be specified in Section
1110(a)(1)(A) of the Bankruptcy Code (such 60-day or other period being the
"New Section 1110 Period"), involuntarily stayed or prohibited by applicable
law or court order from exercising such remedies under the Lease (a "Continuous
Stay Period"); provided further, however, that the requirement to exercise one
or more of such remedies under the Lease shall nonetheless be applicable during
a Continuous Stay Period subsequent to the expiration of the New Section 1110
Period to the extent that the continuation of such Continuous Stay Period
subsequent to the expiration of the New Section 1110 Period (A) results from an
agreement by the trustee or the debtor-in-possession in such proceeding during
the New Section 1110 Period with the approval of the relevant court to perform
the Lease in accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and
continues to perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy
Code or (B) is an extension of the New Section 1110 Period with the consent of
the Mortgagee pursuant to Section 1110(b) of the Bankruptcy Code or (C) results
from the Lessee's assumption during the New Section 1110 Period with the
approval of the relevant court of the Lease pursuant to Section 365 of the
Bankruptcy Code and Lessee's continuous performance of the Lease as so assumed
or (D) is the consequence of the Mortgagee's own failure to give any requisite
notice to any person. In the event that the applicability of Section 1110 of
the Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, both of the Mortgagee and the Owner Trustee shall have the right
to participate in such proceedings; provided that any such participation by the
Owner Trustee shall not affect in any way any rights or remedy of the Mortgagee
hereunder.

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

(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Mortgagee may (and shall, upon
receipt of a written demand therefor from a Majority in Interest of Note
Holders), subject to Section 4.03 hereof, at any time, by delivery of written
notice or notices to the Owner Trustee and the Owner Participant, declare all
the Equipment Notes to be due and payable, whereupon the unpaid Original Amount
of all Equipment Notes then outstanding, together with accrued but

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unpaid interest thereon (without Make-Whole Amount) and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived; provided that if an
Event of Default referred to in clause (g) of Section 4.02 hereof shall have
occurred or a Lease Event of Default under Section 14.5 of the Lease shall have
occurred, then and in every such case the unpaid Original Amount then
outstanding, together with accrued but unpaid interest and all other amounts
due thereunder and hereunder shall immediately and without further act become
due and payable without presentment, demand, protest or notice, all of which
are hereby waived; provided further that in the event of a reorganization
proceeding involving the Lessee instituted under Chapter 11 of the Bankruptcy
Code, if no Lease Event of Default (including any Lease Event of Default set
forth in Section 14.3 of the Lease) and no other Event of Default (other than
the failure to pay the Original Amount of the Equipment Notes which by such
declaration shall have become payable) exists at any time after the
consummation of such proceeding, such declaration shall be automatically
rescinded without any further action on the part of any Note Holder.

This Section 4.04(b), however, is subject to the condition
that, if at any time after the Original Amount of the Equipment Notes shall
have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, all overdue
payments of interest upon the Equipment Notes and all other amounts payable
under the Equipment Notes (except the Original Amount of the Equipment Notes
which by such declaration shall have become payable) shall have been duly paid,
and every other Default and Event of Default with respect to any covenant or
provision of this Trust Indenture shall have been cured, then and in every such
case a Majority in Interest of Note Holders may (but shall not be obligated
to), by written instrument filed with the Mortgagee, rescind and annul the
Mortgagee's declaration (or such automatic acceleration) and its consequences;
but no such rescission or annulment shall extend to or affect any subsequent
Default or Event of Default or impair any right consequent thereon.

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

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

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

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

SECTION 4.05. RETURN OF AIRCRAFT, ETC.

(a) If an Event of Default shall have occurred and be
continuing and the Equipment Notes have been accelerated, subject to Section
4.03 hereof and unless the Owner Trustee or the Owner Participant shall have
elected to purchase the Equipment Notes, at the request of the Mortgagee, the
Owner Trustee shall promptly execute and deliver to the Mortgagee such
instruments of title and other documents as the Mortgagee may deem necessary or
advisable to enable the Mortgagee or an agent or representative designated by
the Mortgagee, at such time or times and place or places as the Mortgagee may
specify, to obtain possession of all or any part of the Mortgaged Property
included in the Trust Indenture Estate to which the Mortgagee shall at the time
be entitled hereunder. If the Owner Trustee shall for any reason fail to
execute and deliver such instruments and documents after such request by the
Mortgagee, the Mortgagee may (i) obtain a judgment conferring on the Mortgagee
the right to immediate possession and requiring the Owner Trustee to execute
and deliver such instruments and documents to the Mortgagee, to the entry of
which judgment the Owner Trustee hereby specifically consents to the fullest
extent permitted by Law, and (ii) pursue all or part of such Mortgaged Property
wherever it may be found and, in the event that a Lease Event of Default has
occurred and is continuing, may enter any of the premises of Lessee wherever
such Mortgaged Property may be or be supposed to be and search for such
Mortgaged Property and take possession of and remove such Mortgaged Property.
All expenses of obtaining such judgment or of pursuing, searching for and
taking such property shall, until paid, be secured by the Lien of this Trust
Indenture.

(b) Upon every such taking of possession, the Mortgagee may,
from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Mortgagee
shall have the right to maintain, use, operate, store, insure, lease, control,
manage, dispose of, modify or alter the Mortgaged Property and to carry on the
business and to exercise all rights and powers of the Owner Participant and the
Owner Trustee relating to the Mortgaged Property, as the Mortgagee shall deem
best, including the right to enter into any and all such agreements with
respect to the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modification or alteration of the Mortgaged
Property or any part

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thereof as the Mortgagee may determine, and the Mortgagee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Mortgaged Property and every part
thereof, except Excluded Payments, without prejudice, however, to the right of
the Mortgagee under any provision of this Trust Indenture to collect and
receive all cash held by, or required to be deposited with, the Mortgagee
hereunder other than Excluded Payments. Such tolls, rents (including Rent),
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration of
the Mortgaged Property and of conducting the business thereof, and to make all
payments which the Mortgagee may be required or may elect to make, if any, for
taxes, assessments, insurance or other proper charges upon the Mortgaged
Property or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee), and all other payments which the Mortgagee
may be required or authorized to make under any provision of this Trust
Indenture, as well as just and reasonable compensation for the services of the
Mortgagee, and of all persons properly engaged and employed by the Mortgagee
with respect hereto.

SECTION 4.06. REMEDIES CUMULATIVE

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

SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS

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

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SECTION 4.08. WAIVER OF PAST DEFAULTS

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

SECTION 4.09. APPOINTMENT OF RECEIVER

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

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

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

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SECTION 4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT

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

ARTICLE V

DUTIES OF THE MORTGAGEE

SECTION 5.01. NOTICE OF EVENT OF DEFAULT

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

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SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS

(a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and
(b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and
from time to time of a Majority in Interest of Note Holders, the Mortgagee
shall, subject to the terms of this Section 5.02, take such of the following
actions as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder as shall be
specified in such instructions; (ii) give such notice or direction or exercise
such right, remedy or power under the Lease, the Participation Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, or any other part of the
Trust Indenture Estate as shall be specified in such instructions; and (iii)
approve as satisfactory to the Mortgagee all matters required by the terms of
the Lease to be satisfactory to the Owner Trustee, it being understood that
without the written instructions of a Majority in Interest of Note Holders, the
Mortgagee shall not approve any such matter as satisfactory to the Mortgagee;
provided, that anything contained in this Trust Indenture, the Lease or the
other Operative Agreements to the contrary notwithstanding, but subject to the
next paragraph hereof:

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

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

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executed (or as subsequently modified with the consent of the Owner
Trustee) which, absent the occurrence and continuance of an Event of
Default hereunder, would be distributable to the Owner Trustee under
Article III hereof;

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

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

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

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

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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(7) so long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the "Lessor" under the Lease [or any
assigned Permitted Sublease* shall be exercised by the Owner Trustee
to the exclusion of the Mortgagee including, without limitation, the
right to (i) exercise all rights with respect to Lessee's use and
operation, modification or maintenance of the Aircraft and any Engine
which the Lease specifically confers on the Lessor, and (ii) consent
to and approve any assignment pursuant to Section 13 of the Lease;
provided that the foregoing shall not (x) limit (A) any rights
separately granted to the Mortgagee under the Operative Agreements or
(B) the right of the Mortgagee to receive any funds to be delivered to
the "Lessor" under the Lease (except with respect to Excluded
Payments) and under the Purchase Agreement or (y) confer upon the
Owner Trustee the right to adversely affect the validity or
enforceability of the lien of this Indenture.

Notwithstanding anything to the contrary contained herein
(including this Section 5.02), the Mortgagee shall have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Section 15 thereof and (B) subject only to the
provisions of Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the
remedies set forth in such Section 15 (other than in connection with Excluded
Payments and provided that each of the Owner Trustee, Owner Participant and
Mortgagee shall independently retain the rights set forth in clause (ii) of
Section 15.1.5 of the Lease) at any time that a Lease Event of Default shall
have occurred and be continuing. Further and for the avoidance of doubt, and
anything to the contrary contained herein (including this Section 5.02), in no
event may the Owner Trustee amend or otherwise modify the provisions of Section
3.2.1(e) of the Lease or of the final sentence of the definition of Stipulated
Loss Value or Termination Value, in any such case, without the prior written
consent of the Mortgagee.

The Mortgagee will execute and the Owner Trustee will file or
cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Trust
Indenture Estate as may be specified from time to time in written instructions
of a Majority in Interest of Note Holders (which instructions shall be
accompanied by the form of such continuation statement so to be filed). The
Mortgagee will furnish to each Note Holder (and, during the continuation of a
Mortgagee Event, to the Owner Trustee and Owner Participant), promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates and other instruments furnished to the Mortgagee under
the Lease or hereunder, including, without limitation, a copy of any
Termination Notice (as defined in the Lease) and a copy of each report or
notice received pursuant to Section 9 and Paragraph E of

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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Annex D of the Lease, respectively to the extent that the same shall not have
been furnished to such holder pursuant hereto or the Lease.

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

SECTION 5.03. INDEMNIFICATION

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

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

The Mortgagee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate, or to otherwise
take or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Note Holders as provided in this Trust Indenture; and
no implied duties or obligations shall be read into this Trust Indenture
against the Mortgagee. The Mortgagee agrees that it will in its individual
capacity and at its own cost and expense (but without any right of indemnity in
respect of any such cost or expense under Section 7.01 hereof), promptly take
such action as may be necessary duly to discharge all liens and encumbrances on
any part of the Trust Indenture Estate which result from claims against it in
its individual capacity not related to the ownership of the Aircraft or the
administration of the Trust Indenture Estate or any other transaction pursuant
to this Trust Indenture or any document included in the Trust Indenture Estate.

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

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

SECTION 5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES

At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, if no Lease Event of Default is continuing, the Owner Trustee shall
direct the Mortgagee to execute and deliver to the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien
of this Trust Indenture and the Mortgagee shall execute and deliver such
instrument as aforesaid, but only upon compliance by Lessee with the applicable
provisions of Section 10 of the Lease.

SECTION 5.07. INDENTURE SUPPLEMENTS FOR REPLACEMENTS

If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 10 of the Lease, the Owner Trustee and
the Mortgagee agree for the benefit of the Note Holders and Lessee, subject to
fulfillment of the conditions precedent and

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compliance by Lessee with its obligations set forth in Section 10 of the Lease
and the requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver a Lease Supplement and a
Trust Indenture Supplement, as applicable, as contemplated by Section 10 of the
Lease.

SECTION 5.08. EFFECT OF REPLACEMENT

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

SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE

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

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ARTICLE VI

THE OWNER TRUSTEE AND THE MORTGAGEE

SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES

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

SECTION 6.02. ABSENCE OF DUTIES

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

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

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

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

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST

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

SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL

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

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SECTION 6.06. CAPACITY IN WHICH ACTING

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

SECTION 6.07. COMPENSATION

The Mortgagee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and
expenses of counsel), for all services rendered hereunder and shall, on and
subsequent to an Event of Default hereunder, have a priority claim on the Trust
Indenture Estate for the payment of such compensation, to the extent that such
compensation shall not be paid by Lessee, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Trust Indenture Estate toward such payments. The Mortgagee
agrees that it shall have no right against the Loan Participants, the Note
Holders, the Owner Trustee or the Owner Participant for any fee as compensation
for its services as trustee under this Trust Indenture.

SECTION 6.08. INSTRUCTIONS FROM NOTE HOLDERS

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

ARTICLE VII

INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE

SECTION 7.01. SCOPE OF INDEMNIFICATION

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against any and all liabilities, obligations, losses, damages, penalties, taxes
(excluding any taxes payable by the Mortgagee on or measured by any
compensation received by the Mortgagee for its services under this Trust
Indenture), claims, actions, suits, costs, expenses or disbursements (including
legal fees and expenses) of any kind and nature whatsoever, which may be
imposed on, incurred by or asserted against the Mortgagee (whether or not also
indemnified against by any other person under any other document) in any way
relating to or arising out of this Trust Indenture or any other Operative
Agreement to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Indenture Estate or the action or inaction of the Mortgagee
hereunder except only in the case of willful misconduct or gross negligence (or
negligence in the case of handling funds) of the Mortgagee in the performance
of its duties hereunder or resulting from the inaccuracy of any representation
or warranty of the Mortgagee (in its individual capacity) referred to in
Section 6.03 hereof, or as provided in Section 6.01 hereof or in the last
sentence of Section 5.04 hereof, or as otherwise excluded by the terms of
Section 9.1 or 9.3 of the Participation Agreement from Lessee's indemnities
under such Sections. In addition, if necessary, the Mortgagee shall be
entitled to indemnification from the Trust Indenture Estate for any liability,
obligation, loss, damage, penalty, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Section 7.01 to the extent
not reimbursed by Lessee or others, but without releasing any of them from
their respective agreements of reimbursement; and to secure the same the
Mortgagee shall have a prior Lien on the Trust Indenture Estate. Without
limiting the foregoing, the Mortgagee agrees that, prior to seeking
indemnification from the Trust Indenture Estate, it will demand, and diligently
pursue in good faith (but with no duty to exhaust all legal remedies therefor),
indemnification available to the Mortgagee from Lessee under the Lease or the
Participation Agreement.

ARTICLE VIII

SUCCESSOR AND SEPARATE TRUSTEES

SECTION 8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE

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

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SECTION 8.02. RESIGNATION OF MORTGAGEE; APPOINTMENT OF
SUCCESSOR

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

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

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

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such an institution willing, able and legally qualified to perform the duties
of the Mortgagee hereunder upon reasonable or customary terms.

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

SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES

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

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duties or obligations theretofore granted to any such additional or separate
trustee. In case any additional or separate trustee appointed under this
Section 8.03(a) shall die, become incapable of acting, resign or be moved, all
the assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Mortgagee until a successor
additional or separate trustee is appointed as provided in this Section
8.03(a).

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

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

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ARTICLE IX

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS

SECTION 9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS

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

(b) Without limiting the provisions of Section 9.01 hereof,
the Mortgagee agrees with the Note Holders that it shall not enter into any
amendment, waiver or modification of, supplement or consent to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement or the
Participation Agreement, or any other agreement included in the Trust Indenture
Estate, unless such supplement, amendment, waiver, modification or consent is
consented to in writing by a Majority in Interest of Note Holders, but upon the
written request of a Majority in Interest of Note Holders, the Trustee shall
from time to time enter into any such supplement or amendment, or execute and
deliver any such waiver, modification or consent, as may be specified in such
request and as may be (in the case of any such amendment, supplement or
modification), to the extent such agreement is required, agreed to by the Owner
Trustee and Lessee or, as may be appropriate, the Airframe Manufacturer or the
Engine Manufacturer; provided, however, that, without the consent of each
holder of an affected Equipment Note then outstanding and of each Liquidity
Provider, no such amendment of or supplement to this Trust Indenture, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement or the Participation Agreement
or waiver or modification of the

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terms of, or consent under, any thereof, shall (i) modify any of the provisions
of this Section 9.01, or of Article II or III or Section 4.02, 4.04(c),
4.04(d), 5.02 or 5.06 hereof, Section 13.3, 14 (except to add an Event of
Default) or 16 of the Lease, Section 15.1 of the Participation Agreement, the
definitions of "Event of Default," "Default," "Lease Event of Default," "Lease
Default," "Majority in Interest of Note Holders," "Make-Whole Amount" or "Note
Holder," or the percentage of Note Holders required to take or approve any
action hereunder, (ii) reduce the amount, or change the time of payment or
method of calculation of any amount, of Original Amount, Make-Whole Amount, if
any, or interest with respect to any Equipment Note, or alter or modify the
provisions of Article III hereof with respect to the order of priorities in
which distribution thereunder shall be made as among the Note Holders, the
Owner Trustee and Lessee, (iii) reduce, modify or amend any indemnities in
favor of the Owner Trustee, the Mortgagee or the Note Holders (except that the
Owner Trustee (in its individual capacity) or the Mortgagee, as the case may
be, may consent to any waiver or reduction of an indemnity payable to it), (iv)
consent to any change in the Trust Indenture or the Lease which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10 or 2.11
hereof or the purchase or exchange of the Equipment Notes other than as
permitted by Section 2.13 hereof, (v) except as contemplated by the Lease or
the Participation Agreement, reduce the amount or extend the time of payment of
Basic Rent, Stipulated Loss Value, or Termination Value for the Aircraft in
each case as set forth in the Lease, or modify, amend or supplement the Lease
or consent to any assignment of the Lease, in either case releasing Lessee from
its obligations in respect of the payment of Basic Rent, Stipulated Loss Value
or Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set forth
in Sections 3 and 16 of the Lease or (vi) permit the creation of any Lien on
the Trust Indenture Estate or any part thereof other than Permitted Liens or
deprive any Note Holder of the benefit of the Lien of this Trust Indenture on
the Trust Indenture Estate, except as provided in connection with the exercise
of remedies under Article IV hereof.

(c) At any time after the date hereof, the Owner Trustee and
the Mortgagee may enter into one or more agreements supplemental hereto without
the consent of any Note Holder for any of the following purposes: (i) (a) to
cure any defect or inconsistency herein or in the Equipment Notes, or to make
any change not inconsistent with the provisions hereof (provided that such
change does not adversely affect the interests of any Note Holder in its
capacity solely as Note Holder) or (b) to cure any ambiguity or correct any
mistake; (ii) to evidence the succession of another party as the Owner Trustee
in accordance with the terms of the Trust Agreement or to evidence the
succession of a new trustee hereunder pursuant hereto, the removal of the
trustee hereunder or the appointment of any co-trustee or co-trustees or any
separate or additional trustee or trustees; (iii) to convey, transfer, assign,
mortgage or pledge any property to or with the Mortgagee or to make any other
provisions with respect to matters or questions arising hereunder so long as
such action shall not adversely affect the interests of the Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description of
any property at any time subject to the Lien of this Trust Indenture or better
to assure, convey and

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confirm unto the Mortgagee any property subject or required to be subject to
the Lien of this Trust Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of the Owner
Trustee for the benefit of the Note Holders, or to surrender any rights or
power herein conferred upon the Owner Trustee, the Owner Participant or the
Lessee; (vi) to add to the rights of the Note Holders; and (vii) to include on
the Equipment Notes any legend as may be required by Law.

SECTION 9.02. TRUSTEES PROTECTED

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

SECTION 9.03. DOCUMENTS MAILED TO NOTE HOLDERS

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

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

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

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ARTICLE X

MISCELLANEOUS

SECTION 10.01. TERMINATION OF TRUST INDENTURE

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

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

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

SECTION 10.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING

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

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

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

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

SECTION 10.05. NOTICES

Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed
by certified mail, postage prepaid, or by facsimile or confirmed telex, and (i)
if to the Owner Trustee, addressed to it at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ with a copy to the Owner Participant addressed as provided in
clause (iii) below, (ii) if to Mortgagee, addressed to it at its office at
▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
(iii) if to any Participant, Lessee, any Note Holder or any other Indenture
Indemnitee, addressed to such party at such address as such party shall have
furnished by notice to the Owner Trustee and the Mortgagee, or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on Schedule 1 to the Participation Agreement or in the Equipment Note
Register. Whenever any notice in writing is required to be given by the Owner
Trustee, any Participant or the Mortgagee or any Note Holder to any of the
other of them, such notice shall be deemed given and such requirement satisfied
when such notice is received, or if such notice is mailed by certified mail,
postage prepaid, three Business Days after being mailed, addressed as provided
above. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this Trust
Indenture.

SECTION 10.06. SEVERABILITY

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

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SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS

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

SECTION 10.08. SUCCESSORS AND ASSIGNS

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

SECTION 10.09. HEADINGS

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

SECTION 10.10. NORMAL COMMERCIAL RELATIONS

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

__________________________________

* Insert bracketed language if the Lease provides for the assignment of
a permitted sublease.

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SECTION 10.11. GOVERNING LAW; COUNTERPART FORM

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

SECTION 10.12. VOTING BY NOTE HOLDERS

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

SECTION 10.13. BANKRUPTCY

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

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

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

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

WILMINGTON TRUST COMPANY, as
Mortgagee

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

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EXHIBIT A
TO TRUST INDENTURE AND MORTGAGE ___

TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT

This TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT NO. 1, dated
___________, 199_ (herein called this "Trust Indenture Supplement") of FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee (herein called the "Owner Trustee") under that certain Trust
Agreement ___ dated as of ___________, 199_ (the "Trust Agreement"), between
the Owner Trustee and the Owner Participant named therein.

W I T N E S S E T H:

WHEREAS, the Trust Indenture and Mortgage ___, dated as of
____________, 199_ (as amended and supplemented to the date hereof, the "Trust
Indenture") between the Owner Trustee and Wilmington Trust Company, as
Mortgagee (the "Mortgagee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall particularly
describe the Aircraft, and shall specifically mortgage such Aircraft to the
Mortgagee; and

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

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

AIRFRAME

One airframe identified as follows:

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

The Boeing Company

332
together with all of the Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereinafter acquired and
which are from time to time incorporated or installed in or attached to said
airframe.

AIRCRAFT ENGINES

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

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

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

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

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

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

TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Mortgagee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participants, the Note Holders
and the Indenture Indemnitees, except as

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provided in Section 2.14 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Equipment Note over any other by
reason of priority of time of issue, sale, negotiation, date of maturity
thereof or otherwise for any reason whatsoever, and for the uses and purposes
and subject to the terms and provisions set forth in the Trust Indenture.

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

AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.

* * *

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

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

By:___________________________________
Name:
Title:

3
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TRUST INDENTURE AND MORTGAGE

SCHEDULE I

ORIGINAL AMOUNT INTEREST RATE
--------------- -------------

Series A:
Series B:
Series C:

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335
Trust Indenture and Mortgage

Equipment Note Amortization

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

5
336
EXHIBIT A-4 to
Note Purchase Agreement

FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT

337
-------------------------------------------------------------------------------
CONFIDENTIAL: Subject to Restrictions on Dissemination
Set Forth in Section 8 of the Participation Agreement (as defined herein)
-------------------------------------------------------------------------------

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
____________ 1997, between Continental Airlines, Inc., a Delaware corporation
("Assignor"), and First Security Bank, National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee
("Assignee") under Trust Agreement ___ dated as of ____________ 1997 (the
"Trust Agreement"), between the Owner Participant named therein and Assignee,
in its individual capacity, and otherwise not in its individual capacity but
solely as trustee thereunder.

Assignor and Manufacturer (as such term and other capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing,
among other things, for the manufacture and sale by Manufacturer or
Manufacturer's wholly owned subsidiary to Assignor of certain aircraft, engines
and related equipment, including the Aircraft. Assignor and Engine Manufacturer
are parties to the General Terms Agreement, containing, among other terms and
conditions, the Engine Warranties.

Assignee wishes to acquire the Aircraft from Assignor and Assignor, on
the terms and conditions hereinafter set forth, is willing to assign to
Assignee certain of Assignor's rights and interests under the Purchase
Agreement and the General Terms Agreement and Assignee is willing to accept
such assignment, as hereinafter set forth.

AGREEMENTS

The parties hereto agree as follows:

Section 1. Definitions. For all purposes of this Assignment, except as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings:

Aircraft - The Boeing Model 757-224 aircraft bearing Manufacturer's
Serial No. _________ and U.S. Registration No.

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 1
338

________, to be financed pursuant to the Participation Agreement, including the
Engines.

Engines - Two Rolls-Royce Model RB211-535E4-B-37 series engines
bearing manufacturer's serial numbers ________ and ________, respectively,
installed on the Aircraft.

Engine Manufacturer - Rolls-Royce plc, a corporation organized under
the laws of England, and its successors and assigns.

Engine Warranties - Engine Manufacturer's "Engine and Parts Warranty"
reference CE28, "Nacelle Warranty" reference CE49A and "Non-Installation Items
Warranty" reference CE7/Audit 1, as set forth in Exhibit C which forms a part
of the General Terms Agreement, and as limited by the applicable terms of the
General Terms Agreement and such Exhibit C.

General Terms Agreement - The Purchase Contract reference
RR/CAL/DEG2124 dated December 7, 1993, by and between Engine Manufacturer and
Assignor, including Exhibit C - "Warranties" thereto, insofar as such Exhibit C
relates to the Engine Warranties, but excluding any and all Side Letter
Agreements attached thereto(which do not detract or limit the Engine Warranties
in any material respect), to the extent that such Purchase Contract and such
Exhibit relate to the Engines, as such Purchase Contract may hereafter be
amended, supplemented and modified to the extent relating to the Engines.

Lease - The Lease Agreement ___, dated as of ____________ 1997, as at
any time amended, supplemented and modified, between Assignee, as lessor, and
Assignor, as lessee, providing for the lease of the Aircraft.

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

Participation Agreement - The Participation Agreement ___, dated as of
____________ 1997, among Assignor, the Participants, Assignee and Mortgagee, as
at any time amended, supplemented and modified.

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 2

339

Purchase Agreement - Purchase Agreement No. 1783, dated March 18,
1993, between Manufacturer and Assignor, providing, among other things, for the
manufacture and sale by Manufacturer to Assignor of certain Boeing Model 757
aircraft (including the Aircraft) and including as part thereof Exhibits A, B,
D, E and F thereto, but excluding all other exhibits and letter and
supplemental agreements, to the extent that such Purchase Agreement and such
Exhibits relate to the Aircraft, as such Purchase Agreement may hereafter be
amended, supplemented and modified to the extent permitted by the terms of this
Assignment.

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

Section 2. Assignment. Assignor does hereby sell, assign, transfer and
set over unto Assignee and its successors and permitted assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only
to the extent that the same relates to the Aircraft, and in and to the General
Terms Agreement, as and only to the extent that the Engine Warranties contained
therein relate to the Engines, except to the extent reserved below, including
without limitation in such assignment (a) all claims for damages in respect of
the Aircraft and the Engines arising as a result of any default by Manufacturer
under the Purchase Agreement or Engine Manufacturer or any other vendor or
supplier of other parts or equipment installed on or in the Aircraft, including
without limitation all warranty service life policies, aircraft performance
guarantees and indemnity provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the
Aircraft and the Engines, (b) any and all rights of Assignor to compel
performance of the terms of the Purchase Agreement in respect of the Aircraft
and the Engine Warranties in respect of the Engines and (c) the right to
purchase and take title to the Aircraft pursuant to the Purchase Agreement;
reserving to Assignor, however, with respect to the Aircraft and each Engine,
(i) all rights to receive any credits due to Assignor with respect to the
purchase price of the Aircraft pursuant to the Purchase Agreement and of the
Engines pursuant to the General Terms Agreement, (ii) all of Assignor's rights
and

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 3

340

interests in or arising out of any payments or deposits made relating to
the Aircraft or to be made by Assignor on amounts credited or to be credited or
paid or to be paid by the Manufacturer to Assignor in respect of the Aircraft,
and, (iii) so long and only so long as, the Aircraft and each Engine shall be
subject to the Lease and no Lease Event of Default shall have occurred and be
continuing thereunder, the rights (A) to demand, accept and retain all rights
in and to all property (other than the Aircraft), data and services that
Manufacturer or Engine Manufacturer is obligated to provide or does provide
pursuant to the Purchase Agreement or the General Terms Agreement, as the case
may be, and (B) to obtain services, training, data and demonstration and test
flights pursuant to the Purchase Agreement or the General Terms Agreement, as
the case may be.

Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed
Assignee's attention to Paragraph 10 of Part A, Paragraph 5 of Part C,
Paragraph 3 of Part D, Paragraph 2 of Part D-1, and Paragraph 5 of Part F of
Exhibit B to the Purchase Agreement.

Section 3. Exercise of Rights of "Buyer" under Purchase Agreement and
of "Continental" under General Terms Agreement. Notwithstanding the foregoing,
if and so long as no Lease Event of Default shall have occurred and be
continuing, Assignee authorizes Assignor, to the exclusion of Assignee, during
the Term, to exercise in Assignor's name all rights and powers of the "Buyer"
in respect of the Aircraft under the Purchase Agreement and of "Continental" in
respect of each Engine under the General Terms Agreement, and of Assignee in
respect of a default by any vendor or supplier of parts and equipment (as
specified in clause (b) of Section 2 above) and to retain any recovery or
benefit resulting from the enforcement of any warranty or indemnity under the
Purchase Agreement or the General Terms Agreement in respect of the Aircraft or
each Engine, as the case may be, except that Assignor may not enter into any
change order or other amendment, modification or supplement to the Purchase
Agreement without the written consent or countersignature of Assignee if such
change order, amendment, modification or supplement would (i) result in any
rescission, cancellation or

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 4

341

termination of the Purchase Agreement in respect of the Aircraft or (ii)
materially diminish the rights assigned hereunder to Assignee. Assignee agrees
that, as between Assignee and Manufacturer or Engine Manufacturer, as the case
may be (and without affecting Assignor's duties or obligations under the
Participation Agreement or the Lease), neither Manufacturer nor Engine
Manufacturer, as the case may be, shall be deemed to have knowledge of any
Lease Default, Lease Event of Default, declaration of default or the
discontinuance or remedy thereof or the Aircraft or either Engine being no
longer subject to the Lease or any change in the authority of Assignor or
Assignee, as the case may be, to exercise any of the rights established
hereunder unless and until Manufacturer shall have received written notice
thereof from Assignee or Mortgagee addressed to its Treasurer at ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, if by mail, or to (▇▇▇) ▇▇▇-▇▇▇▇, if by
facsimile, or, in the case of Engine Manufacturer, Engine Manufacturer shall
have received written notice thereof from Assignee or Mortgagee addressed to
its Contract Manager __535, 524 and large Fleet Engines at ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, if by mail, or to 011-44-332-248514, if by facsimile. So
long as Manufacturer and Engine Manufacturer act in good faith, Manufacturer
and Engine Manufacturer may rely conclusively on any such notice without
inquiring as to the accuracy of, or the entitlement of the party to give, such
notice.

Section 4. Certain Agreements. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:

(a) Assignor shall at all times remain liable (i) to Manufacturer
under the Purchase Agreement to perform all the duties and obligations of
the "Buyer" thereunder and (ii) to Engine Manufacturer under the General
Terms Agreement to perform all the duties and obligations of the
"Continental" thereunder, in each case to the same extent as if this
Assignment had not been executed,

(b) the exercise by Assignee of any of the rights assigned hereunder
shall not release Assignor from any of its duties or obligations to
Manufacturer under the Purchase Agreement or to Engine Manufacturer under
the General Terms Agreement except to the extent that such

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 5

342

exercise by Assignee shall constitute performance of such duties and
obligations, and

(c) except as provided in the next sentence, none of Assignee,
Mortgagee or any Participant shall have any obligation or liability under
the Purchase Agreement or the General Terms Agreement by reason of, or
arising out of, this Assignment or be obligated to perform any of the
obligations or duties of Assignor under the Purchase Agreement or the
General Terms Agreement or to make any payment thereunder or to make any
inquiry as to the sufficiency of any payment received by any of them or to
present or file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.

Anything contained in this Assignment, the Consent and Agreement or the Engine
Consent and Agreement to the contrary notwithstanding, but without in any way
releasing Assignor from any of its duties or obligations under the Purchase
Agreement, the General Terms Agreement or this Assignment, Assignee and
Mortgagee confirm for the benefit of Manufacturer and Engine Manufacturer,
respectively, that, insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines, as the case may be, in
exercising any rights under the Purchase Agreement or the Engine Warranties, or
in making any claim with respect to the Aircraft or other goods and services
delivered or to be delivered pursuant to the Purchase Agreement or the Engine
Warranties, the terms and conditions of the Purchase Agreement and the Engine
Warranties, including without limitation Exhibit C thereto shall apply to, and
be binding upon, Assignee and Mortgagee to the same extent as Assignor. Each of
Assignee and Mortgagee agree that, in the event it intends to sell, re-lease or
otherwise dispose of one or more of the Engines to any Person, it will use
reasonable efforts to ensure that such Person enters into a direct warranty
agreement with Engine Manufacturer prior to delivery of such Engine or Engines
to such Person.

Section 5. Preservation of Rights. Nothing contained in this
Assignment shall in any way diminish or limit the provisions of Assignor's
indemnity in Section 9 of the Participation Agreement with respect to any
liability of Assignee to Manufacturer in any way relating to or arising out

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 6

343

of the Purchase Agreement. Nothing contained in this Assignment shall subject
Manufacturer or Engine Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the
General Terms Agreement, as the case may be, or modify in any respect the
contract rights of Manufacturer or Engine Manufacturer thereunder, except as
may be provided in their respective consents attached hereto, or require
Manufacturer to divest itself of title to or possession of the Aircraft or
other goods and services until delivery thereof and payment therefor as
provided in the Purchase Agreement or subject Manufacturer or Engine
Manufacturer to any multiple or duplicative liability or obligation under the
Purchase Agreement or the General Terms Agreement, as the case may be. No
further assignment of the Engine Warranties, including without limitation
assignments for security purposes (other than under the Trust Indenture), are
permitted without the express written consent of Engine Manufacturer.

Section 6. Appointment of Attorney. Effective at any time when a Lease
Event of Default shall have occurred and be continuing, (i) unless Assignee and
Mortgagee (so long as the Lien of the Trust Indenture has not been discharged),
in their sole discretion, shall notify Manufacturer or Engine Manufacturer, as
the case may be, to the contrary, the authorization given to Assignor under
Section 3 hereof to enforce such rights and claims shall henceforth cease to be
effective and Assignee and its successors and permitted assigns shall, to the
exclusion of Assignor, be entitled to assert and enforce such rights and claims
as substitute party plaintiff or otherwise, and Assignor shall, at the request
of Assignee or its successors or permitted assigns and at Assignor's expense,
cooperate with and take such action as is reasonably necessary to enable
Assignee and its successors and permitted assigns to enforce such rights and
claims, and (ii) Assignor does hereby constitute Assignee, its successors and
permitted assigns, Assignor's true and lawful attorney, irrevocably, with full
power (in the name of Assignor or otherwise) to ask, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies due
and to become due under, or arising out of, the Purchase Agreement in respect
of the Aircraft or the Engine Warranties in respect of the Engines, as the case
may be, to the extent that the same have been assigned by this Assignment and,
for

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 7
344

such period as Assignee may exercise rights with respect thereto under this
Assignment, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute (or, if
previously commenced, assume control of) any proceeding and to obtain any
recovery in connection therewith which Assignee may deem to be necessary or
advisable in the premises.

Section 7. Other Action. Assignor agrees that, at Assignor's sole cost
and expense, at any time and from time to time, upon the written request of
Assignee or, so long as the Lien of the Trust Indenture has not been
discharged, Mortgagee, Assignor will promptly and duly execute and deliver any
and all such further instruments and documents and take such further action as
Assignee or, so long as the Lien of the Trust Indenture has not been
discharged, Mortgagee, may reasonably request in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.

Section 8. Assignor's Representations and Warranties. Assignor does
hereby represent and warrant that the Purchase Agreement and the General Terms
Agreement are in full force and effect as to Assignor and are enforceable
against Assignor in accordance with their respective terms. Assignor does
hereby further represent and warrant that Assignor has, with the authorized
execution of the Consent and Agreement and the Engine Consent and Agreement,
(i) received all necessary consents to the assignment and transfer contemplated
herein (including without limitation the assignment and transfer contemplated
herein of Assignor's rights under the Purchase Agreement and the General Terms
Agreement) and (ii) assuming that the Consent and Agreement and the Engine
Consent and Agreement are in full force and effect, such consents are in full
force and effect and Assignor further represents and warrants that Assignor has
not assigned (except as assigned hereby) or pledged (except pursuant to (i)
Purchase Contract Security Agreement dated December 7, 1993, between Lessee and
Engine Manufacturer and (ii) the 757 Purchase Agreement Assignment dated
February 7, 1994 between Lessee and Manufacturer, the Lien of which will have
been released at or prior to the delivery of this Agreement), and hereby
covenants that it will not during the Term assign (except as assigned hereby)
or pledge so long as this Assignment shall remain in effect, the whole or any
part

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 8
345

of the rights hereby assigned or any of its rights with respect to the Aircraft
under the Purchase Agreement or with respect to the Engines under the General
Terms Agreement not assigned hereby to anyone other than Assignee.

Section 9. Payments. Notwithstanding this Assignment and anything
herein to the contrary, all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor under the Purchase Agreement with respect to the
Aircraft or under the General Terms Agreement with respect to the Engines,
including, without limitation, resulting from the enforcement of any warranty,
covenant, representation, indemnity or product support agreement thereunder or
the enforcement or exercise of any right or power thereunder or hereunder (in
the case of Manufacturer, a "Manufacturer Payment," and in the case of Engine
Manufacturer, an "Engine Manufacturer Payment") (excluding, however, from
Manufacturer Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights reserved to Assignor
in Section 2 hereof), will be payable and applicable as follows: all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to
Assignor unless and until Manufacturer or Engine Manufacturer, as the case may
be, shall have received written notice as set forth in Section 3 hereof from
Assignee or Mortgagee that a Lease Event of Default has occurred and is
continuing, whereupon Manufacturer or Engine Manufacturer, as the case may be,
will, until Manufacturer or Engine Manufacturer, as the case may be, shall have
received written notice from Assignee or Mortgagee that all Lease Events of
Default have been cured or waived, make any and all such payments directly to
Assignee (or, so long as the Trust Indenture has not been discharged and
Manufacturer or Engine Manufacturer, as the case may be, shall have received
notice thereof, to Mortgagee). Any amounts received by Assignee pursuant to the
immediately preceding sentence shall, to the extent not theretofore applied in
satisfaction of sums owing to Assignee in accordance with the terms of the
Operative Agreements, be held and invested as provided in Section 4.4 of the
Lease.

Section 10. Assignee's Agreement. Assignee agrees that, during the
Term, except as otherwise contemplated by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be continuing, it will not enter into
any

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 9
346

agreement that would amend, modify, supplement, rescind, cancel or terminate
the Purchase Agreement or the General Terms Agreement in respect of the
Aircraft or the Engines without the prior written consent of Assignor.

Section 11. Execution; Counterparts, etc. This Assignment is executed
by Assignor and Assignee concurrently with the execution and delivery of the
Lease. This Assignment may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and both of which counterparts, taken together, shall constitute one and the
same instrument. The section headings in this Assignment are for convenience of
reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof.

Section 12. Confidential Treatment. Assignee agrees that it will not
disclose to any third party the terms of the Purchase Agreement or the General
Terms Agreement except (i) as required by applicable law or governmental
regulation, (ii) in connection with the financing of the Aircraft, (iii) as
permitted under Section 8 of the Participation Agreement as if this Assignment
were specifically referred to therein, (iv) with the consent of Assignor,
Manufacturer and the Engine Manufacturer (as the case may be) or (v) in
connection with any sale or lease of the Aircraft.

Section 13. Assignment to Mortgagee. The right, title and interest of
Assignee in and to this Assignment has been assigned to and is subject to a
security interest in favor of Wilmington Trust Company, as Mortgagee under the
Trust Indenture, for the benefit of the Noteholders and the Indenture
Indemnitees referred to in such Trust Indenture, all to the extent provided in
such Trust Indenture. Assignor hereby consents to such assignment and to the
creation of such security interest in and to this Assignment.

SECTION 14. GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.

[This space intentionally left blank.]

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS PAGE 10

347

IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement and Engine Warranties Assignment ___ to be duly executed as of the
day and year first above written.

CONTINENTAL AIRLINES, INC.

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

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

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

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS
348

The undersigned, as Mortgagee for the benefit of the Note Holders and
Indenture Indemnitees and as assignee of, and holder of a security interest in,
the estate, right, title and interest of Assignee in and to the foregoing
Assignment pursuant to the terms of the Trust Indenture agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the
Trust Indenture shall be subject to the terms and conditions of the foregoing
Assignment, including Sections 4 and 5 therein, and of the Purchase Agreement
and the General Terms Agreement.

WILMINGTON TRUST COMPANY,
as Mortgagee

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

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ROLLS
349

MANUFACTURER CONSENT AND AGREEMENT ___

The undersigned, THE BOEING COMPANY, a Delaware corporation, hereby
acknowledges notice of and consents to all of the terms of Purchase Agreement
and Engine Warranties Assignment ___ (herein called the "Assignment") (the
defined terms therein being hereinafter used with the same meanings unless
otherwise defined herein) between Continental Airlines, Inc., as Assignor, and
First Security Bank, National Association, as Owner Trustee, as Assignee, and
hereby confirms to Assignee that: (i) all representations, warranties,
indemnities and agreements of Manufacturer under the Purchase Agreement with
respect to the Aircraft shall inure to the benefit of Assignee to the same
extent as if originally named the "Buyer" therein, except as provided by
Section 2 of the Assignment; (ii) Assignee shall not be liable for any of the
obligations or duties of Assignor under the Purchase Agreement, nor shall the
Assignment give rise to any duties or obligations whatsoever on the part of
Assignee owing to Manufacturer, except as provided in Section 4 of the
Assignment; (iii) Manufacturer consents to the lease of the Aircraft by
Assignee to Assignor under the Lease, consents to the grant of a security
interest in the Aircraft pursuant to the Trust Indenture by Assignee and agrees
that the Assignment constitutes an agreement by Assignee as required by Article
10.2 of the Purchase Agreement; and (iv) Manufacturer will continue to pay to
Assignor or its order all payments that Manufacturer may be required to make in
respect of the Aircraft under the Purchase Agreement unless and until
Manufacturer shall have received written notice from Assignee or Mortgagee
addressed to its Treasurer at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, if
by mail, or to (▇▇▇) ▇▇▇-▇▇▇▇, if by facsimile, that a Lease Event of Default
has occurred and is continuing, whereupon Manufacturer will not be required to
make further inquiry into the content of such notice and will make any and all
payments that it may be required thereafter to make in respect of the Aircraft
under the Purchase Agreement and the right to receive that has been assigned
under the Assignment, directly to Assignee at its address at ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attn: Corporate Trust Department (or, so
long as the Trust Indenture has not been discharged, directly to Mortgagee at

MANUFACTURER CONSENT AND AGREEMENT ROLLS PAGE 1
350
its address at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Corporate Trust Administration), unless and until
Manufacturer shall have received notice in writing from Assignee or Mortgagee
that no Lease Event of Default is continuing, whereupon Manufacturer shall make
all payments that Manufacturer may be required to make in respect of the
Aircraft under the Purchase Agreement to Assignor or its order, as aforesaid.

Manufacturer hereby represents and warrants that: (i) Manufacturer is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware; (ii) the making and performance of the Purchase
Agreement and this Manufacturer Consent and Agreement ___ have been duly
authorized by all necessary corporate action on the part of Manufacturer, do
not require any stockholder approval and do not contravene Manufacturer's
Certificate of Incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent
and Agreement ___, the performance of its obligations to sell and deliver the
Aircraft thereunder and the giving of the warranty obligations thereunder, do
not, as to such making, performance or giving, contravene any law binding on
Manufacturer; and (iii) the Purchase Agreement constituted, as of the date
thereof and at all times thereafter to and including the date of this
Manufacturer Consent and Agreement ___, and this Manufacturer Consent and
Agreement ___ constitutes, binding obligations of Manufacturer enforceable
against Manufacturer in accordance with their respective terms subject to (A)
the limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and (B)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the Purchase
Agreement and this Manufacturer Consent and Agreement ___ inadequate for the
practical realization of the benefits intended to be provided thereby. It is
understood that the execution of this Manufacturer Consent and Agreement ___ by
Manufacturer is subject to the condition that, concurrently with the delivery
of the Aircraft to Assignee, Assignee shall lease the Aircraft

MANUFACTURER CONSENT AND AGREEMENT ROLLS PAGE 2
351
to Assignor under the Lease.

[This space intentionally left blank.]

MANUFACTURER CONSENT AND AGREEMENT ROLLS PAGE 3
352
THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.

Dated as of .
---------------

THE BOEING COMPANY

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

MANUFACTURER CONSENT AND AGREEMENT ROLLS
353
ENGINE MANUFACTURER CONSENT AND AGREEMENT ___

The undersigned, ROLL-ROYCE plc, a corporation organized under the
laws of England whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇, England, hereby acknowledges notice of and consents to all of the terms of
Purchase Agreement and Engine Warranties Assignment ___ (herein called the
"Assignment") (the defined terms therein being hereinafter used with the same
meanings unless otherwise defined herein) between Continental Airlines, Inc.,
as Assignor, and First Security Bank, National Association, as Owner Trustee,
as Assignee. Under the General Terms Agreement, Engine Manufacturer has
agreed to support certain Rolls-Royce Model RB211-535E4-B-37 engines and spare
parts therefor purchased by Assignor from Engine Manufacturer, as installed on
certain Boeing Model 757 aircraft. Engine Manufacturer hereby confirms to
Assignor and Assignee that the Engine Warranties, as and to the extent that
such relate to the Engines, shall inure to the benefit of Assignee (and, so
long as the Trust Indenture has not been discharged, Mortgagee) to the same
extent as if originally named "Continental" in the General Terms Agreement and
to the benefit of Assignor (but only to the extent provided for in the
Assignment) in each case subject to the terms and conditions of the Assignment;
provided, that Engine Manufacturer shall not owe any liability or obligation
under the Engine Warranties more than once in total.

Engine Manufacturer represents and warrants that:

1. It is a corporation duly organized and validly
existing in good standing under the laws of England;

2. The making and performance of this Engine
Manufacturer Consent and Agreement ___ in accordance with its terms have been
duly authorized by all necessary corporate action on the part of Engine
Manufacturer, do not require any stockholder approval and do not contravene its
Articles of Association or by-laws or any debenture, credit agreement or other
contractual agreement to which Engine Manufacturer is a party or by which it is
bound or any law binding on Engine Manufacturer;

ENGINE MANUFACTURER CONSENT AND AGREEMENT ROLLS PAGE 1
354
3. The making and performance of the Engine Warranties
in accordance with their terms have been duly authorized by all necessary
corporate action on the part of Engine Manufacturer, do not require any
stockholder approval and do not contravene Engine Manufacturer's Articles of
Association or by-laws or any debenture, credit agreement or other contractual
agreement to which Engine Manufacturer is a party or by which it is bound, and
do not, as to the making thereof, contravene any law binding on Engine
Manufacturer, and to the best of its knowledge, do not as to the performance
thereof contravene any law binding on Engine Manufacturer; and

4. The Engine Warranties constituted as of the date on
which they were made and at all times thereafter to and including the date of
this Engine Manufacturer Consent and Agreement ___, and this Engine
Manufacturer Consent and Agreement ___ constitute binding obligations of Engine
Manufacturer enforceable against Engine Manufacturer in accordance with their
respective terms subject to:

(a) the limitations of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally; and

(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).

[This space intentionally left blank.]

ENGINE MANUFACTURER CONSENT AND AGREEMENT ROLLS PAGE 2
355
THIS ENGINE MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS.

Dated as of .
---------------

ROLLS-ROYCE PLC

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

ENGINE MANUFACTURER CONSENT AND AGREEMENT ROLLS
356
--------------------------------------------------------------------------------
CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION
SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN)
--------------------------------------------------------------------------------

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
__________, ____, between Continental Airlines, Inc., a Delaware corporation
("Assignor"), and First Security Bank, National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee
("Assignee") under Trust Agreement ___ dated as of __________, ____ (the "Trust
Agreement"), between the Owner Participant named therein and Assignee, in its
individual capacity, and otherwise not in its individual capacity but solely as
trustee thereunder.

Assignor and Manufacturer (as such term and other capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing,
among other things, for the manufacture and sale by Manufacturer or
Manufacturer's wholly owned subsidiary to Assignor of certain aircraft, engines
and related equipment, including the Aircraft. Assignor and Engine
Manufacturer are parties to the General Terms Agreement, containing, among
other terms and conditions, the Engine Warranties.

Assignee wishes to acquire the Aircraft and Assignor, on the terms and
conditions hereinafter set forth, is willing to assign to Assignee certain of
Assignor's rights and interests under the Purchase Agreement and the General
Terms Agreement and Assignee is willing to accept such assignment, as
hereinafter set forth.

AGREEMENTS

The parties hereto agree as follows:

Section 1. Definitions. For all purposes of this Assignment, except
as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings:

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 1
357
Aircraft - The Boeing Model 737-___ aircraft bearing Manufacturer's
Serial No. _____ and U.S. Registration No. _____, to be financed pursuant to
the Participation Agreement, including the Engines.

Engines - Two ______ series engines bearing manufacturer's serial
numbers ______ and ______, respectively, installed on the Aircraft.

Engine Manufacturer - CFM International, Inc., a Delaware corporation,
and its successors and assigns.

Engine Warranties - Engine Manufacturer's "New Engine Warranty," "New
Parts Warranty," "Ultimate Life Warranty" and "Campaign Change Warranty," as
set forth in the Engine Manufacturer's Engine Product Support Plan which forms
a part of the General Terms Agreement, and as limited by the applicable terms
of the General Terms Agreement and such Engine Product Support Plan.

General Terms Agreement- The Agreement No. 6-7075, dated as of June
10, 1995, by and between Engine Manufacturer and Assignor, including the
"Engine Product Support Plan" at Exhibit B thereto, insofar as such Engine
Product Support Plan relates to the Engine Warranties, but excluding any and
all letter agreements attached thereto (which do not detract or limit the
Engine Warranties in any material respect), to the extent that such General
Terms Agreement and such Exhibit relate to the Engines, as such General Terms
Agreement may hereafter be amended, supplemented and modified to the extent
permitted by the terms of this Assignment to the extent relating to the
Engines.

Lease - The Lease Agreement ___, dated as of __________, ____, as at
any time amended, supplemented and modified, between Assignee, as lessor, and
Assignor, as lessee, providing for the lease of the Aircraft.

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

Participation Agreement - The Participation Agreement ___, dated as of
__________, ____, among Assignor, the Participants, Assignee and Mortgagee, as
at any time amended, supplemented and modified.

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 2
358
Purchase Agreement - Purchase Agreement No.1951, dated July 23, 1996,
between Manufacturer and Assignor, providing, among other things, for the
manufacture and sale by Manufacturer to Assignor of certain Boeing Model 737
aircraft (including the Aircraft) and including as part thereof Exhibits A, B,
D, E and F thereto, but excluding all other exhibits and letter and
supplemental agreements, to the extent that such Purchase Agreement and such
Exhibits relate to the Aircraft, as such Purchase Agreement may hereafter be
amended, supplemented and modified to the extent permitted by the terms of this
Assignment.

Section 2. Assignment. Assignor does hereby sell, assign, transfer
and set over unto Assignee and its successors and permitted assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only
to the extent that the same relates to the Aircraft, and in and to the General
Terms Agreement, as and only to the extent that the Engine Warranties contained
therein relate to the Engines, except to the extent reserved below, including
without limitation in such assignment (a) all claims for damages in respect of
the Aircraft and the Engines arising as a result of any default by Manufacturer
under the Purchase Agreement or Engine Manufacturer or any other vendor or
supplier of other parts or equipment installed on or in the Aircraft, including
without limitation all warranty service life policies, aircraft performance
guarantees and indemnity provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the
Aircraft and the Engines, (b) any and all rights of Assignor to compel
performance of the terms of the Purchase Agreement in respect of the Aircraft
and the Engine Warranties in respect of the Engines and (c) the right to
purchase and take title to the Aircraft pursuant to the Purchase Agreement;
reserving to Assignor, however, with respect to the Aircraft and each Engine,
(i) all rights to receive any credits due to Assignor with respect to the
purchase price of the Aircraft pursuant to the Purchase Agreement and of the
Engines pursuant to the General Terms Agreement, (ii) all of Assignor's rights
and

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 3
359
interests in or arising out of any payments or deposits made relating to the
Aircraft or to be made by Assignor on amounts credited or to be credited or
paid or to be paid by the Manufacturer to the Assignor in respect of the
Aircraft and (iii) so long and only so long as the Aircraft and each Engine
shall be subject to the Lease and no Lease Event of Default shall have occurred
and be continuing thereunder, the rights (A) to demand, accept and retain all
rights in and to all property (other than the Aircraft), data and services that
Manufacturer or Engine Manufacturer is obligated to provide or does provide
pursuant to the Purchase Agreement or the General Terms Agreement, as the case
may be, and (B) to obtain services, training, data and demonstration and test
flights pursuant to the Purchase Agreement or the General Terms Agreement, as
the case may be.

Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed
Assignee's attention to Paragraph 10 of Part A, Paragraph 5 of Part C,
Paragraph 3 of Part D, Paragraph 2 of Part D-1, Paragraph 5 of Part I, and
Paragraph 9 and 10 of Part F-2 of Exhibit B to the Purchase Agreement.

Section 3. Exercise of Rights of "Buyer" under Purchase Agreement and
of "Airline" under General Terms Agreement. Notwithstanding the foregoing, if
and so long as no Lease Event of Default shall have occurred and be continuing,
Assignee authorizes Assignor, to the exclusion of Assignee, during the Term, to
exercise in Assignor's name all rights and powers of the "Buyer" in respect of
the Aircraft under the Purchase Agreement and of the "Airline" in respect of
each Engine under the General Terms Agreement, and of Assignee in respect of a
default by any vendor or supplier of parts and equipment (as specified in
clause (b) of Section 2 above) and to retain any recovery or benefit resulting
from the enforcement of any warranty or indemnity under the Purchase Agreement
or the General Terms Agreement in respect of the Aircraft or each Engine, as
the case may be, except that Assignor may not enter into any change order or
other amendment, modification or supplement to the Purchase Agreement without
the written consent or countersignature of Assignee if such change order,
amendment, modification or

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 4
360
supplement would (i) result in any rescission, cancellation or termination of
the Purchase Agreement in respect of the Aircraft or (ii) materially diminish
the rights assigned hereunder to Assignee. Assignee agrees that, as between
Assignee and Manufacturer or Engine Manufacturer, as the case may be (and
without affecting Assignor's duties or obligations under the Participation
Agreement or the Lease), neither Manufacturer nor Engine Manufacturer, as the
case may be, shall be deemed to have knowledge of any Lease Default, Lease
Event of Default, declaration of default or the discontinuance or remedy
thereof or the Aircraft or either Engine being no longer subject to the Lease
or any change in the authority of Assignor or Assignee, as the case may be, to
exercise any of the rights established hereunder unless and until Manufacturer
shall have received written notice thereof from Assignee or Mortgagee addressed
to its Treasurer at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, if by mail,
or to (▇▇▇) ▇▇▇-▇▇▇▇, if by facsimile, or, in the case of Engine Manufacturer,
Engine Manufacturer shall have received written notice thereof from Assignee or
Mortgagee addressed to its Commercial Contract Director at ▇.▇. ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, if by mail, or to (▇▇▇) ▇▇▇-▇▇▇▇, if by facsimile.
So long as Manufacturer and Engine Manufacturer act in good faith, Manufacturer
and Engine Manufacturer may rely conclusively on any such notice without
inquiring as to the accuracy of, or the entitlement of the party to give, such
notice.

The Engine Manufacturer shall not be deemed to have knowledge of the
replacement of an Engine with another CFM engine, until the Engine Manufacturer
has received written notice thereof. Such notice shall include the serial
number of the Engine being replaced, as well as the serial number of the
replacement Engine and shall be sent to: Lease Pool Manager, Customer Support
Operation, GE Aircraft Engines, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.

Section 4. Certain Agreements. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 5
361
General Terms Agreement to perform all the duties and obligations of
the "Airline" thereunder, in each case to the same extent as if this
Assignment had not been executed,

(b) the exercise by Assignee of any of the rights
assigned hereunder shall not release Assignor from any of its duties
or obligations to Manufacturer under the Purchase Agreement or to
Engine Manufacturer under the General Terms Agreement except to the
extent that such exercise by Assignee shall constitute performance of
such duties and obligations, and

(c) except as provided in the next sentence, none of
Assignee, Mortgagee or any Participant shall have any obligation or
liability under the Purchase Agreement or the General Terms Agreement
by reason of, or arising out of, this Assignment or be obligated to
perform any of the obligations or duties of Assignor under the
Purchase Agreement or the General Terms Agreement or to make any
payment thereunder or to make any inquiry as to the sufficiency of any
payment received by any of them or to present or file any claim or to
take any other action to collect or enforce any claim for any payment
assigned hereunder.

Anything contained in this Assignment, the Consent and Agreement or the Engine
Consent and Agreement to the contrary notwithstanding, but without in any way
releasing Assignor from any of its duties or obligations under the Purchase
Agreement, the General Terms Agreement or this Assignment, Assignee and
Mortgagee confirm for the benefit of Manufacturer and Engine Manufacturer,
respectively, that, insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines, as the case may be, in
exercising any rights under the Purchase Agreement or the Engine Warranties, or
in making any claim with respect to the Aircraft or other goods and services
delivered or to be delivered pursuant to the Purchase Agreement or the Engine
Warranties, the terms and conditions of the Purchase Agreement and the Engine
Warranties, including without limitation Exhibit B (the "Product Assurance
Document") shall apply to, and be binding upon, Assignee and Mortgagee to the
same extent as Assignor.

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 6
362
Section 5. Preservation of Rights. Nothing contained in this
Assignment shall in any way diminish or limit the provisions of Assignor's
indemnity in Section 9 of the Participation Agreement with respect to any
liability of Assignee to Manufacturer in any way relating to or arising out of
the Purchase Agreement. Nothing contained in this Assignment shall subject
Manufacturer or Engine Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the
General Terms Agreement, as the case may be, or modify in any respect the
contract rights of Manufacturer or Engine Manufacturer thereunder, except as
may be provided in their respective consents attached hereto, or require
Manufacturer to divest itself of title to or possession of the Aircraft or
other goods and services until delivery thereof and payment therefor as
provided in the Purchase Agreement or subject Manufacturer or Engine
Manufacturer to any multiple or duplicative liability or obligation under the
Purchase Agreement or the General Terms Agreement, as the case may be. No
further assignment of the Engine Warranties, including without limitation
assignments for security purposes (other than under the Trust Indenture), are
permitted without the express written consent of Engine Manufacturer.

Section 6. Appointment of Attorney. Effective at any time when a
Lease Event of Default shall have occurred and be continuing, (i) unless
Assignee and Mortgagee (so long as the Lien of the Trust Indenture has not been
discharged), in their sole discretion, shall notify Manufacturer or Engine
Manufacturer, as the case may be, to the contrary, the authorization given to
Assignor under Section 3 hereof to enforce such rights and claims shall
henceforth cease to be effective and Assignee and its successors and permitted
assigns shall, to the exclusion of Assignor, be entitled to assert and enforce
such rights and claims as substitute party plaintiff or otherwise, and Assignor
shall, at the request of Assignee or its successors or permitted assigns and at
Assignor's expense, cooperate with and take such action as is reasonably
necessary to enable Assignee and its successors and permitted assigns to
enforce such rights and claims, and (ii) Assignor does hereby constitute
Assignee, its successors and permitted assigns, Assignor's true and lawful
attorney, irrevocably, with full power (in the name of Assignor or otherwise)
to ask, require, demand, receive, compound and give

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 7
363
acquittance for any and all monies and claims for monies due and to become due
under, or arising out of, the Purchase Agreement in respect of the Aircraft or
the Engine Warranties in respect of the Engines, as the case may be, to the
extent that the same have been assigned by this Assignment and, for such period
as Assignee may exercise rights with respect thereto under this Assignment, to
endorse any checks or other instruments or orders in connection therewith and
to file any claims or take any action or institute (or, if previously
commenced, assume control of) any proceeding and to obtain any recovery in
connection therewith which Assignee may deem to be necessary or advisable in
the premises.

Section 7. Other Action. Assignor agrees that, at Assignor's sole
cost and expense, at any time and from time to time, upon the written request
of Assignee or, so long as the Lien of the Trust Indenture has not been
discharged, Mortgagee, Assignor will promptly and duly execute and deliver any
and all such further instruments and documents and take such further action as
Assignee or, so long as the Lien of the Trust Indenture has not been
discharged, Mortgagee, may reasonably request in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.

Section 8. Assignor's Representations and Warranties. Assignor does
hereby represent and warrant that the Purchase Agreement and the General Terms
Agreement are in full force and effect as to Assignor and are enforceable
against Assignor in accordance with their respective terms. Assignor does
hereby further represent and warrant that Assignor has, with the authorized
execution of the Consent and Agreement and the Engine Consent and Agreement,
(i) received all necessary consents to the assignment and transfer contemplated
herein (including without limitation the assignment and transfer contemplated
herein of Assignor's rights under the Purchase Agreement and the General Terms
Agreement) and (ii) assuming that the Consent and Agreement and the Engine
Consent and Agreement are in full force and effect, such consents are in full
force and effect and Assignor further represents and warrants that Assignor has
not assigned (except as assigned hereby) or pledged (except pursuant to the 737
Purchase Agreement Assignment dated as of November 27, 1996 between Lessee and
Manufacturer, the Lien of which will have been released at or prior to the
delivery of

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 8
364
this Agreement), and hereby covenants that it will not during the Term assign
(except as assigned hereby) or pledge so long as this Assignment shall remain
in effect, the whole or any part of the rights hereby assigned or any of its
rights with respect to the Aircraft under the Purchase Agreement or with
respect to the Engines under the General Terms Agreement not assigned hereby to
anyone other than Assignee.

Section 9. Payments. Notwithstanding this Assignment and anything
herein to the contrary, all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor under the Purchase Agreement with respect to the
Aircraft or under the General Terms Agreement with respect to the Engines,
including, without limitation, resulting from the enforcement of any warranty,
covenant, representation, indemnity or product support agreement thereunder or
the enforcement or exercise of any right or power thereunder or hereunder (in
the case of Manufacturer, a "Manufacturer Payment," and in the case of Engine
Manufacturer, an "Engine Manufacturer Payment") (excluding, however, from
Manufacturer Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights reserved to Assignor
in Section 2 hereof), will be payable and applicable as follows: all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to
Assignor unless and until Manufacturer or Engine Manufacturer, as the case may
be, shall have received written notice as set forth in Section 3 hereof from
Assignee or Mortgagee that a Lease Event of Default has occurred and is
continuing, whereupon Manufacturer or Engine Manufacturer, as the case may be,
will, until Manufacturer or Engine Manufacturer, as the case may be, shall have
received written notice from Assignee or Mortgagee that all Lease Events of
Default have been cured or waived, make any and all such payments directly to
Assignee (or, so long as the Trust Indenture has not been discharged and
Manufacturer or Engine Manufacturer, as the case may be, shall have received
notice thereof, to Mortgagee). Any amounts received by Assignee pursuant to
the immediately preceding sentence shall, to the extent not theretofore applied
in satisfaction of sums owing to Assignee in accordance with the terms of the
Operative Agreements, be held and invested as provided in Section 4.4 of the
Lease.

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 9
365
Section 10. Assignee's Agreement. Assignee agrees that, during the
Term, except as otherwise contemplated by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be continuing, it will not enter into
any agreement that would amend, modify, supplement, rescind, cancel or
terminate the Purchase Agreement or the General Terms Agreement in respect of
the Aircraft or the Engines without the prior written consent of Assignor.

Section 11. Execution; Counterparts, etc. This Assignment is
executed by Assignor and Assignee concurrently with the execution and delivery
of the Lease. This Assignment may be executed by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original, and both of which counterparts, taken together, shall constitute one
and the same instrument. The section headings in this Assignment are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.

Section 13. Assignment to Mortgagee. The right, title and interest
of Assignee in and to this Assignment has been assigned to and is subject to a
security interest in favor of Wilmington Trust Company, as Mortgagee under the
Trust Indenture, for the benefit of the Noteholders and the Indenture
Indemnitees referred to in such Trust Indenture, all to the extent provided in
such Trust Indenture. Assignor hereby consents to such assignment and to the
creation of such security interest in and to this Assignment.

[This space intentionally left blank.]

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 10
366
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement and Engine Warranties Assignment ___ to be duly executed as of the
day and year first above written.

CONTINENTAL AIRLINES, INC.

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

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

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

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 11
367
The undersigned, as Mortgagee for the benefit of the Note Holders and
Indenture Indemnitees and as assignee of, and holder of a security interest in,
the estate, right, title and interest of Assignee in and to the foregoing
Assignment pursuant to the terms of the Trust Indenture agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the
Trust Indenture shall be subject to the terms and conditions of the foregoing
Assignment, including Sections 4 and 5 therein, and of the Purchase Agreement
and the General Terms Agreement.

WILMINGTON TRUST COMPANY,
as Mortgagee

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

PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT CFM PAGE 12
368

MANUFACTURER CONSENT AND AGREEMENT ___

MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 1
369
its address at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Corporate Trust Administration), unless and until
Manufacturer shall have received notice in writing from Assignee or Mortgagee
that no Lease Event of Default is continuing, whereupon Manufacturer shall make
all payments that Manufacturer may be required to make in respect of the
Aircraft under the Purchase Agreement to Assignor or its order, as aforesaid.

Manufacturer hereby represents and warrants that: (i) Manufacturer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware; (ii) the making and performance of the Purchase
Agreement and this Manufacturer Consent and Agreement ___ have been duly
authorized by all necessary corporate action on the part of Manufacturer, do
not require any stockholder approval and do not contravene Manufacturer's
Certificate of Incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent
and Agreement ___, the performance of its obligations to sell and deliver the
Aircraft thereunder and the giving of the warranty obligations thereunder, do
not, as to such making, performance or giving, contravene any law binding on
Manufacturer; and (iii) the Purchase Agreement constituted, as of the date
thereof and at all times thereafter to and including the date of this
Manufacturer Consent and Agreement ___, and this Manufacturer Consent and
Agreement ___ constitutes, binding obligations of Manufacturer enforceable
against Manufacturer in accordance with their respective terms subject to (A)
the limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and (B)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the Purchase
Agreement and this Manufacturer Consent and Agreement ___ inadequate for the
practical realization of the benefits intended to be provided thereby. It is
understood that the execution of this Manufacturer Consent and Agreement ___ by
Manufacturer is subject to the condition that, concurrently with the delivery
of the Aircraft to Assignee, Assignee shall lease the Aircraft to Assignor
under the Lease.

MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 2
370

THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.

Dated as of _______________.

THE BOEING COMPANY

By
Name:
Title

MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 3
371

ENGINE MANUFACTURER CONSENT AND AGREEMENT ___

The undersigned, CFM INTERNATIONAL INC., a Delaware corporation,
hereby acknowledges notice of and consents to all of the terms of Purchase
Agreement and Engine Warranties Assignment ___ (herein called the "Assignment")
(the defined terms therein being hereinafter used with the same meanings unless
otherwise defined herein) between Continental Airlines, Inc., as Assignor, and
First Security Bank, National Association, as Owner Trustee, as Assignee.
Under the General Terms Agreement, Engine Manufacturer has agreed to support
certain _______ engines and spare parts therefor purchased by Assignor from
Engine Manufacturer, as installed on certain Boeing Model 737 aircraft. Engine
Manufacturer hereby confirms to Assignor and Assignee that the Engine
Warranties, as and to the extent that such relate to the Engines, shall inure
to the benefit of Assignee (and, so long as the Trust Indenture has not been
discharged, Mortgagee) to the same extent as if originally named "Airline" in
the General Terms Agreement and to the benefit of Assignor (but only to the
extent provided for in the Assignment) in each case subject to the terms and
conditions of the Assignment; provided, that Engine Manufacturer shall not owe
any liability or obligation under the Engine Warranties more than once in
total.

Engine Manufacturer represents and warrants that:

1. It is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware;

2. The making and performance of this Engine Manufacturer Consent
and Agreement ___ in accordance with its terms have been duly authorized by all
necessary corporate action on the part of Engine Manufacturer, do not require
any stockholder approval and do not contravene its Certificate of Incorporation
or by-laws or any debenture, credit agreement or other contractual agreement to
which Engine Manufacturer is a party or by which it is bound or any law binding
on Engine Manufacturer;

ENGINE MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 1
372

3. The making and performance of the Engine Warranties in
accordance with their terms have been duly authorized by all necessary
corporate action on the part of Engine Manufacturer, do not require any
stockholder approval and do not contravene Engine Manufacturer's Certificate of
Incorporation or by-laws or any debenture, credit agreement or other
contractual agreement to which Engine Manufacturer is a party or by which it is
bound, and do not, as to the making thereof, contravene any law binding on
Engine Manufacturer, and to the best of its knowledge, do not as to the
performance thereof contravene any law binding on Engine Manufacturer; and

4. The Engine Warranties constituted as of the date on which they
were made and at all times thereafter to and including the date of this Engine
Manufacturer Consent and Agreement ___, and this Engine Manufacturer Consent
and Agreement ___ constitute binding obligations of Engine Manufacturer
enforceable against Engine Manufacturer in accordance with their respective
terms subject to:

(a) the limitations of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally; and

(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).

[This space intentionally left blank.]

ENGINE MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 2
373

THIS ENGINE MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS.
Dated as of , .
---------- ----
CFM INTERNATIONAL, INC.

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

ENGINE MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 3
374

Dated as of .
----------------

THE BOEING COMPANY

By
----------------------------------

Name:
Title:

MANUFACTURER CONSENT AND AGREEMENT CFM PAGE 4
375

EXHIBIT A-5 to

Note Purchase Agreement

FORM OF LEASED AIRCRAFT TRUST AGREEMENT
376
================================================================================

TRUST AGREEMENT ____

Dated as of ______________

Between

[_________________________]

and

FIRST SECURITY BANK, NATIONAL ASSOCIATION

One Boeing Model _____________ Aircraft
Bearing Manufacturer's Serial No. ___________

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

TRUST AGREEMENT BASE

377

CONTENTS

SECTION 1. DEFINITIONS ......................................................... 1

SECTION 2. DECLARATION OF TRUST ................................................ 1

SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT ................................. 1
3.1 Authorization ....................................................... 1
3.2 Conditions Precedent ................................................ 3

SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
THE TRUST ESTATE .................................................... 3
4.1 Payments from Trust Estate Only ..................................... 3
4.2 Distribution of Payments ............................................ 4
4.3 Method of Payments .................................................. 5

SECTION 5. DUTIES OF OWNER TRUSTEE ............................................. 6
5.1 Notice of Event of Default .......................................... 6
5.2 Action upon Instructions ............................................ 7
5.3 Limitations on Duties ............................................... 7
5.4 No Duties except as Specified; No Action except as Specified ........ 8
5.5 Satisfaction of Conditions Precedent ................................ 9
5.6 Fixed Investment Trust .............................................. 9

SECTION 6. OWNER TRUSTEE ....................................................... 9
6.1 Acceptance of Trusts and Duties ..................................... 9
6.2 Absence of Certain Duties ........................................... 10
6.3 No Representations or Warranties as to Certain Matters .............. 11
6.4 No Segregation of Monies; Interest .................................. 12
6.5 Reliance upon Certificates, Counsel and Agents ...................... 12
6.6 Not Acting in Individual Capacity ................................... 13
6.7 Fees; Compensation .................................................. 13
6.8 Tax Returns ......................................................... 14

SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT .............. 14

i
TRUST AGREEMENT BASE

378

SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST ............................. 16
8.1 Transfer of Interest ................................................. 16
8.2 Actions of Owner Participants ........................................ 17

SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES ................................ 17
9.1 Resignation of Owner Trustee; Appointment of Successor ............... 17
9.2 Co-Trustees and Separate Trustees .................................... 19

SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER DOCUMENTS .... 21
10.1 Supplements and Amendments and Delivery Thereof ...................... 21
10.2 Discretion as to Execution of Documents .............................. 22
10.3 Absence of Requirements as to Form ................................... 22
10.4 Distribution of Documents ............................................ 23
10.5 No Request Needed as to Lease Supplement and Trust Indenture
Supplement ........................................................... 23

SECTION 11. MISCELLANEOUS ........................................................ 23
11.1 Termination of Trust Agreement ....................................... 23
11.2 Termination at Option of the Owner Participant ....................... 24
11.3 Owner Participant Has No Legal Title in Trust Estate ................. 24
11.4 Assignment, Sale, etc. of Aircraft ................................... 24
11.5 Trust Agreement for Benefit of Certain Parties Only .................. 25
11.6 Citizenship of Owner Participant ..................................... 25
11.7 Notices .............................................................. 25
11.8 Severability ......................................................... 26
11.9 Waivers, Etc. ........................................................ 26
11.10 Counterparts ......................................................... 26
11.11 Binding Effect, Etc. ................................................. 26
11.12 Headings; References ................................................. 27
11.13 Governing Law ........................................................ 27

ii
TRUST AGREEMENT BASE
379

TRUST AGREEMENT _______

This TRUST AGREEMENT ______, dated as of ________________, between
[_________], a Delaware corporation ("Owner Participant"), and FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "First Security" and otherwise not in its individual capacity but
solely as trustee hereunder, "Owner Trustee").

WITNESSETH:

SECTION 1. DEFINITIONS

SECTION 2. DECLARATION OF TRUST

First Security hereby declares that it will hold the Trust Estate as
Owner Trustee upon the trusts hereinafter set forth for the use and benefit of
Owner Participant, subject, however, to the provisions of and the Lien created
by the Trust Indenture and to the provisions of the Lease and the Participation
Agreement.

SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT

3.1 AUTHORIZATION

In respect of the Aircraft, Owner Participant hereby authorizes and
directs Owner Trustee to, and Owner Trustee agrees for the benefit of Owner
Participant that it will, on and after the Delivery Date, subject (except with
respect to Section 3.1(a)) to due compliance with the terms of Section 3.2:

(a) execute and deliver the Participation Agreement, the Trust
Indenture, the Lease and the other Owner Trustee Agreements (in the respective
forms in which they are delivered from time to time by Owner Participant to
Owner Trustee);

(b) subject to the terms of this Trust Agreement, exercise (i) its
rights and perform its duties under the Participation Agreement, (ii) the
rights and perform the duties of Lessor under

TRUST AGREEMENT BASE
380
2

the Lease and (iii) its rights and perform its duties under the Trust Indenture
and the other Owner Trustee Agreements;

(c) execute, issue and deliver to Mortgagee for authentication and
further delivery to Loan Participant the Loan Certificates in the amount and as
provided in Section 2 of the Participation Agreement;

(d) purchase the Aircraft pursuant to the Purchase Agreement as
assigned to Owner Trustee pursuant to the Purchase Agreement Assignment;

(e) accept from Airframe Manufacturer the delivery of the Aircraft
▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale and the invoice with respect to such
Aircraft and from Lessee the delivery of the BFE ▇▇▇▇ of Sale and the invoice
with respect to such BFE;

(f) effect the registration of the Aircraft with the FAA in the
name of Owner Trustee by filing or causing to be filed with the FAA: (i) the
FAA ▇▇▇▇ of Sale; (ii) an Aircraft Registration Application in the name of
Owner Trustee (including, without limitation, an affidavit from Owner Trustee
in compliance with the provisions of Section 47.7(c)(2) of the FAA
Regulations); and (iii) this Trust Agreement;

(g) execute and deliver the Financing Statements referred to in
Section 5.1.2 (xxiii) of the Participation Agreement, together with all other
agreements, documents and instruments referred to in Section 5 of the
Participation Agreement to which Owner Trustee is to be a party;

(h) make payment of Lessor's Cost for the Aircraft from the
aggregate amount of the Commitments for the Aircraft of Owner Participant and
Loan Participant, to the extent received by Owner Trustee, in the manner
provided in the Participation Agreement;

(i) execute and deliver Lease Supplement No. 1 covering the
Aircraft;

(j) execute and deliver a Trust Indenture Supplement covering the
Aircraft; and

(k) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the direction
of Owner Participant, as Owner Participant may deem necessary or advisable in
connection with

TRUST AGREEMENT BASE
381
3

the transactions contemplated by this Trust Agreement and the other Operative
Agreements.

3.2 CONDITIONS PRECEDENT

The rights and obligations of Owner Trustee to take the actions
required by Section 3.1 shall be subject to the following conditions precedent:

(a) Owner Trustee shall have received the notice described in
Section 5.1.1 of the Participation Agreement, when and as required thereby, or
shall have been deemed to have waived such notice in accordance with Section
5.1.1 of the Participation Agreement;

(b) Each Participant shall have made the full amount of its
Commitment specified in Section 2.1 of the Participation Agreement available to
Owner Trustee, in immediately available funds, in accordance with Sections 2
and 4 of the Participation Agreement; and

(c) Owner Participant shall have notified Owner Trustee that the
terms and conditions of Section 5 of the Participation Agreement, insofar as
they relate to conditions precedent to performance by Owner Participant of its
obligations thereunder, have been either fulfilled to the satisfaction of, or
waived by, Owner Participant. Owner Participant shall, by instructing Owner
Trustee to release the full amount of its Commitment then held by Owner Trustee
as provided in Section 2 of the Participation Agreement, be deemed to have
found satisfactory to it, or waived, all such conditions precedent.

SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST
ESTATE

4.1 PAYMENTS FROM TRUST ESTATE ONLY

Except as provided in Section 7, all payments to be made by Owner
Trustee under this Trust Agreement shall be made only from (a) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, the Commitments (except as otherwise provided in Section 14 of the
Participation Agreement) and (b) in the case of all other payments, the income
from and proceeds of the Trust Estate to the extent that Owner Trustee shall
have received sufficient income or proceeds from the Trust Estate to make such
payments. Owner Participant agrees

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that it will look solely (y) in the case of funds made available in accordance
with Section 4 of the Participation Agreement, to the Commitments and any
income therefrom (except as otherwise provided in Section 14 of the
Participation Agreement) and (z) in the case of all other payments, to the
income from and proceeds of the Trust Estate to the extent available for
distribution to Owner Participant as provided in this Trust Agreement. Except
as provided in Section 7, Owner Participant agrees that First Security is
neither personally liable to Owner Participant for any amounts payable nor
subject to any other liability under this Trust Agreement.

4.2 DISTRIBUTION OF PAYMENTS

4.2.1 PAYMENTS TO MORTGAGEE

Until the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, all Rent, insurance proceeds and requisition or other
payments of any kind included in the Trust Estate (other than Excluded
Payments) payable to Owner Trustee shall be payable directly to Mortgagee (and,
if any of the same are received by Owner Trustee, shall upon receipt be paid
over to Mortgagee without deduction, set-off or adjustment of any kind) for
distribution in accordance with the provisions of Article III of the Trust
Indenture; provided, that any payments received by Owner Trustee from (a)
Lessee with respect to Owner Trustee's fees and disbursements or (b) Owner
Participant pursuant to Section 7 shall not be paid over to Mortgagee but shall
be retained by Owner Trustee and applied toward the purpose for which such
payments were made.

4.2.2 PAYMENTS TO OWNER TRUSTEE, OTHER PARTIES

After the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, any payment of the type referred to in Section 4.2.1
(other than Excluded Payments) received by Owner Trustee, any payment received
from Mortgagee (other than Excluded Payments) and any other amount received as
part of the Trust Estate and for the application or distribution of which no
provision is made in this Trust Agreement shall be distributed forthwith upon
receipt by Owner Trustee in the following order of priority: first, so much of
such payment as shall be required to reimburse Owner Trustee for any expenses
not otherwise reimbursed as to which Owner Trustee is entitled to be so
reimbursed pursuant to the provisions hereof shall be retained

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by Owner Trustee; second, so much of the remainder for which provision as to
the application thereof is contained in the Lease or any of the other Operative
Agreements shall be applied and distributed in accordance with the terms of the
Lease or such other Operative Agreement; and third, the balance, if any, shall
be paid to Owner Participant.

4.2.3 CERTAIN DISTRIBUTIONS TO OWNER PARTICIPANT

All amounts from time to time distributable by Mortgagee to Owner
Participant pursuant to the Trust Indenture shall, if paid to Owner Trustee, be
distributed by Owner Trustee to Owner Participant in accordance with the
provisions of Article III of the Trust Indenture; provided, that any payments
received by Owner Trustee from (a) Lessee with respect to Owner Trustee's fees
and disbursements or (b) Owner Participant pursuant to Section 7 shall not be
paid over to Owner Participant but shall be retained by Owner Trustee and
applied toward the purpose for which such payments were made.

4.2.4 EXCLUDED PAYMENTS

Any Excluded Payments received by Owner Trustee shall be paid by Owner
Trustee to the Person to whom such Excluded Payments are payable under the
provisions of the Participation Agreement, the Tax Indemnity Agreement or the
Lease.

4.2.5 MULTIPLE OWNER PARTICIPANTS

If, as a result of a transfer by Owner Participant under Section 8.1,
there is more than one Owner Participant under this Trust Agreement, each such
Owner Participant shall hold in proportion to its respective beneficial
interest in the Trust Estate an undivided beneficial interest in the entire
Trust Estate and is entitled to receive ratably with any other Owner
Participant payments distributable by Owner Trustee under this Trust Agreement.
No Owner Participant shall have legal title to the Aircraft or any other
portion of the Trust Estate.

4.3 METHOD OF PAYMENTS

Owner Trustee shall make distributions or cause distributions to be
made to Owner Participant pursuant to this Section 4 by transferring the amount
to be distributed by wire transfer in immediately available funds on the day
received (or

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on the next succeeding Business Day if the funds to be so distributed shall not
have been received by Owner Trustee by 12:00 noon, New York City time, and
which funds Owner Trustee shall not have been reasonably able to distribute to
Owner Participant on the day received) to Owner Participant's account set forth
in Schedule 1 to the Participation Agreement or to such other account or
accounts of Owner Participant as Owner Participant may designate from time to
time in writing to Owner Trustee; provided, that Owner Trustee shall use
reasonable efforts to invest overnight, in investments that would be permitted
under Section 4.4 of the Lease, all funds received by it at or later than 12:00
noon, New York City time, and which funds Owner Trustee shall not have been
reasonably able to distribute to Owner Participant on the day received).

SECTION 5. DUTIES OF OWNER TRUSTEE

5.1 NOTICE OF EVENT OF DEFAULT

(a) If Owner Trustee shall have knowledge of a Lease Default or a
Lease Event of Default or an Indenture Default or an Indenture Event of
Default, Owner Trustee shall give to Owner Participant, Mortgagee and Lessee
prompt telephonic or telex notice thereof followed by prompt confirmation
thereof by certified mail, postage prepaid, provided, that (i) in the case of
an event which with the passage of time would constitute an Indenture Event of
Default of the type referred to in paragraph (c) or (e) of Section 4.02 of the
Trust Indenture, such notice shall in no event be furnished later than ten days
after Owner Trustee shall first have knowledge of such event and (ii) in the
case of a misrepresentation by Owner Trustee which with the passage of time
would constitute an Indenture Event of Default of the type referred to in
paragraph (d) of Section 4.02 of the Trust Indenture, such notice shall in no
event be furnished later than ten days after Owner Trustee shall first have
knowledge of such event.

(b) Subject to the terms of Section 5.3, Owner Trustee shall take
such action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default, Lease
Event of Default, Indenture Default or Indenture Event of Default or other
event as Owner Trustee shall be directed in writing by Owner Participant.
For all purposes of this Trust Agreement, the Lease and the other Operative
Agreements, in the absence of Actual Knowledge of Owner

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Trustee, Owner Trustee shall not be deemed to have knowledge of a Lease
Default, Lease Event of Default, Indenture Default or Indenture Event of
Default unless notified in writing by Mortgagee, Owner Participant or Lessee.

5.2 ACTION UPON INSTRUCTIONS

Subject to the terms of Sections 5.1 and 5.3, upon the written
instructions at any time and from time to time of Owner Participant, Owner
Trustee will take such of the following actions, not inconsistent with the
provisions of the Lease and the Trust Indenture, as may be specified in such
instructions: (a) give such notice or direction or exercise such right, remedy
or power under this Trust Agreement or any of the other Owner Trustee
Agreements or in respect of all or any part of the Trust Estate, or take such
other action, as shall be specified in such instructions (including entering
into such agreements and instruments as shall be necessary under Section 10);
(b) take such action to preserve or protect the Trust Estate (including the
discharge of Liens) as may be specified in such instructions; (c) approve as
satisfactory to it all matters required by the terms of the Lease or the other
Operative Agreements to be satisfactory to Owner Trustee, it being understood
that without written instructions of Owner Participant, Owner Trustee shall not
approve any such matter as satisfactory to it; (d) subject to the rights of
Lessee under the Operative Agreements, after the expiration or earlier
termination of the Lease, convey all of Owner Trustee's right, title and
interest in and to the Aircraft for such amount, on such terms and to such
purchaser or purchasers as shall be designated in such instructions, or retain,
lease or otherwise dispose of, or from time to time take such other action with
respect to, the Aircraft on such terms as shall be designated in such
instructions; and (e) take or refrain from taking such other action or actions
as may be specified in such instructions.

5.3 LIMITATIONS ON DUTIES

Owner Trustee shall not be required to take any action under Section
5.1 (other than the giving of the notices referred to therein) or 5.2 if Owner
Trustee shall reasonably believe such action is not adequately indemnified by
Owner Participant under Section 7, unless Lessee or Owner Participant agrees to
furnish such additional indemnity as shall reasonably be required, in manner
and form satisfactory to Owner Trustee, and, in addition

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to the extent not otherwise paid pursuant to the provisions of the Lease or of
the Participation Agreement, to pay the reasonable compensation of Owner
Trustee for the services performed or to be performed by it pursuant to such
direction and any reasonable fees and disbursements of counsel or agents
employed by Owner Trustee in connection therewith. Owner Trustee shall not be
required to take any action under Section 5.1 or 5.2 (other than the giving of
the notices referred to therein) if Owner Trustee shall have been advised by
counsel that such action is contrary to the terms of any of the Owner Trustee
Agreements or is otherwise contrary to Law and Owner Trustee has delivered to
Owner Participant written notice of the basis for its refusal to act.

5.4 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS SPECIFIED

5.4.1 NO DUTIES EXCEPT AS SPECIFIED

Owner Trustee shall not have any duty or obligation to manage,
control, use, sell, dispose of or otherwise deal with the Aircraft or any other
part of the Trust Estate or to otherwise take or refrain from taking any action
under, or in connection with, any of the Owner Trustee Agreements, except as
expressly required by the terms of any of the Owner Trustee Agreements, or (to
the extent not inconsistent with the provisions of the Trust Indenture) as
expressly provided by the terms hereof or in a written instruction from Owner
Participant received pursuant to the terms of Section 5.1 or 5.2, and no
implied duties or obligations shall be read into this Trust Agreement against
Owner Trustee. First Security agrees that it will, in its individual capacity
and at its own cost or expense (but without any right of indemnity in respect
of any such cost or expense hereunder or under the Participation Agreement),
promptly take such action as may be necessary to duly discharge and satisfy in
full all Lessor Liens attributable to it in its individual capacity which it is
required to discharge pursuant to Section 7.3.1 of the Participation Agreement
and otherwise comply with the terms of said Section binding upon it.

5.4.2 NO ACTION EXCEPT AS SPECIFIED

Owner Trustee shall have no power, right or authority to, and agrees
that it will not, manage, control, use, sell, dispose of or otherwise deal with
the Aircraft or any other part of the

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Trust Estate except (a) as expressly required by the terms of any of the Owner
Trustee Agreements, (b) as expressly provided by the terms hereof or (c) as
expressly provided in written instructions from Owner Participant pursuant to
Section 5.1 or 5.2.

5.5 SATISFACTION OF CONDITIONS PRECEDENT

Anything in this Trust Agreement to the contrary notwithstanding,
Owner Trustee shall, subject to the satisfaction of special counsel for Owner
Trustee of the occurrence of all the applicable conditions precedent specified
in Section 3.2, comply with the provisions of Section 3.1.

5.6 FIXED INVESTMENT TRUST

Notwithstanding anything in this Trust Agreement to the contrary,
Owner Trustee shall not be authorized and shall have no power to "vary the
investment" of Owner Participant within the meaning of Treasury Regulations
Section 301.7701-4(c)(1), it being understood that Owner Trustee shall have the
power and authority to fulfill its obligations under Section 4.3 hereof,
Section 4.3.3 of the Participation Agreement and Section 4.4 of the Lease.

SECTION 6. OWNER TRUSTEE

6.1 ACCEPTANCE OF TRUSTS AND DUTIES

First Security accepts the trusts hereby created and agrees to perform
the same as Owner Trustee but only upon the terms hereof and the Trust
Indenture applicable to it. Owner Trustee also agrees to receive and disburse
all monies received by it constituting part of the Trust Estate pursuant to the
terms hereof. First Security shall not be answerable or accountable under any
circumstances, except for (a) its own willful misconduct or gross negligence
(including, without limitation, in connection with any activities of Owner
Trustee in violation of Section 5.4.2), (b) its failure (in its individual
capacity) to perform its obligations under Section 5.4.1, (c) its or Owner
Trustee's failure to use ordinary care to receive or disburse funds or to
comply with the first sentence of Section 6.8, (d) liabilities that may result
from the inaccuracy of any representation or breach of warranty of it in its
individual capacity (or from the failure by it in its individual capacity to
perform any covenant) in this Trust Agreement, the Trust Indenture, the Lease
or the Participation Agreement or elsewhere

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in any of the other Operative Agreements, (e) taxes, fees or other charges on,
based on or measured by any fees, commissions or compensation received by First
Security in connection with the transactions contemplated by this Trust
Agreement and the other Operative Agreements to which it (in its individual
capacity or as Owner Trustee) is a party, (f) for its or Owner Trustee's
failure to use ordinary care in receiving or disbursing funds or in connection
with its obligation to invest funds pursuant to Section 4 of the Participation
Agreement, Section 4.4 of the Lease or Section 4.3 hereof, (g) for any
liability on the part of Owner Trustee arising out of its negligence or willful
or negligent misconduct in connection with its obligations under Section 5.1
(other than the first sentence thereof), 6.8 or 9.2 hereof or Section 4.01 of
the Trust Indenture. First Security shall have no obligation to advance its
individual funds for any purpose, and Owner Trustee shall have no obligation to
distribute to Owner Participant, Lessee or any third party any amounts to be
paid to Owner Trustee until such amounts are collected by Owner Trustee.

6.2 ABSENCE OF CERTAIN DUTIES

(a) Except in accordance with written instructions furnished
pursuant to Section 5.1 or 5.2 and except as provided in, and without limiting
the generality of, Sections 3.1 and 5.4.1 and the last sentence of Section
9.1.2, and subject to Section 4.01 of the Trust Indenture, neither Owner
Trustee nor First Security shall have any duty (i) to see to any recording or
filing of any Operative Agreement or of any supplement to any thereof or to see
to the maintenance of any such recording or filing or any other filing of
reports with the FAA or other governmental agencies, except that of First
Security to comply with the FAA reporting requirements set forth in 14 C.F.R.
Section 47.45 and 14 C.F.R. Section 47.51, and Owner Trustee shall, to the
extent that information for that purpose is timely supplied by Lessee pursuant
to any of the Operative Agreements, complete and timely submit (and furnish
Owner Participant with a copy of) any and all reports relating to the Aircraft
that may from time to time be required by the FAA or any government or
governmental authority having jurisdiction, (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, other than to forward to Owner
Participant copies of all reports and other written information which Owner
Trustee receives from Lessee pursuant to Section 11 of the Lease, (iii) except
as

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provided in Section 7.3.1 or 7.3.2 of the Participation Agreement, Section 4.01
of the Trust Indenture or Section 5.4 or 6.1 hereof, to see to the payment or
discharge of any tax, assessment or other governmental charge or any lien or
encumbrance of any kind owing with respect to or assessed or levied against any
part of the Trust Indenture Estate or the Trust Estate, except as provided in
Section 6.3.9 of the Participation Agreement or (iv) to inspect Lessee's books
and records with respect to the Aircraft at any time permitted pursuant to the
Lease.

(b) Notwithstanding clause (a), Owner Trustee will furnish to
Mortgagee and Owner Participant, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to Owner Trustee under the Lease or
any other Operative Agreement except to the extent to which a responsible
officer of Owner Trustee reasonably believes (and confirms by telephone call
with Owner Participant) that duplicates or copies thereof have already been
furnished to Owner Participant by some other person.

6.3 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS

NEITHER FIRST SECURITY NOR OWNER TRUSTEE MAKES OR SHALL BE DEEMED TO
HAVE MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF,
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, THE
ABSENCE OF ANY STRICT LIABILITY OBLIGATION OR ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF
WHATSOEVER, except that First Security warrants to Owner Participant that on
the Delivery Date Owner Trustee shall have received whatever title to the
Aircraft that was conveyed to it and that the Aircraft shall, on the Delivery
Date and during the Term, be free of Lessor Liens attributable to First
Security or (b) any representation or warranty as to the validity, legality or
enforceability of this Trust Agreement or any other Operative Agreement to
which First Security, in its individual capacity or as Owner Trustee, is a
party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof except to the extent that any such statement
is expressly made herein or

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therein by such party as a representation by First Security, in its individual
capacity or as Owner Trustee, as the case may be, and except that First
Security hereby represents and warrants that it has all corporate power and
authority to execute, deliver and perform this Trust Agreement and that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by it or Owner Trustee under this
Trust Agreement or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of itself or Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation
of First Security or Owner Trustee, as the case may be, enforceable against
First Security or Owner Trustee, as the case may be, in accordance with its
terms.

6.4 NO SEGREGATION OF MONIES; INTEREST

Monies received by Owner Trustee under this Trust Agreement need not
be segregated in any manner except to the extent required by Law, or except as
provided in written instructions from Owner Participant, and shall be invested
as provided in Section 4.3 hereof or Section 4.4 of the Lease.

6.5 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS

Owner Trustee shall incur no liability to anyone in acting in good
faith in reliance upon and in accordance with any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper reasonably believed by it to be genuine and
reasonably believed by it to be signed by the proper party or parties. Unless
other evidence in respect thereof is specifically prescribed in this Trust
Agreement, any request, direction, order or demand of Owner Participant or
Lessee mentioned in this Trust Agreement or in any of the other Owner Trustee
Agreements shall be sufficiently evidenced by written instruments signed by the
Chairman of the Board, the President, any Vice President or any other officer
and in the name of Owner Participant or Lessee, as the case may be. Owner
Trustee may accept a copy of a resolution of the Board of Directors or
Executive Committee of Lessee,

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certified by the Secretary or an Assistant Secretary of Lessee as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted by said Board of Directors or Executive Committee and that
the same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described in this Trust Agreement,
Owner Trustee may, absent Actual Knowledge to the contrary, for all purposes
rely on a certificate signed by the Chairman of the Board, the President, any
Vice President or any other officer of Lessee, and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of Lessee, as to
such fact or matter, and such certificate shall constitute full protection to
Owner Trustee for any action taken or omitted to be taken by it in good faith
in reliance thereon and in accordance therewith. In the administration of
trusts under this Trust Agreement, Owner Trustee may execute any of the trusts
or powers and perform its powers and duties under this Trust Agreement directly
or through agents or attorneys and may, at the expense of the Trust Estate,
consult with counsel, accountants and other skilled persons to be selected and
employed by it. Owner Trustee shall not be liable for anything done, suffered
or omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other skilled persons.

6.6 NOT ACTING IN INDIVIDUAL CAPACITY

In acting under this Trust Agreement, First Security acts solely as
Owner Trustee and not in its individual capacity except as otherwise expressly
provided in this Trust Agreement or in the other Operative Agreements to which
it is a party; and, except as may be otherwise expressly provided in this Trust
Agreement, the Lease, the Participation Agreement and the Trust Indenture, all
persons, other than the Owner Participant as provided in this Trust Agreement
or the Trust Indenture, having any claim against Owner Trustee by reason of the
transactions contemplated hereby shall look only to the Trust Estate for
payment or satisfaction thereof except to the extent provided in Section 6.1 or
otherwise as Owner Trustee shall expressly agree otherwise in writing.

6.7 FEES; COMPENSATION

Lessee shall pay the Transaction Expenses of Owner Trustee. Neither
Owner Participant nor the Trust Estate shall have any liability for any such
fees and expenses; provided, that the

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foregoing shall not limit the obligations of Owner Participant under Sections
5.3 and 7; provided, that Owner Trustee shall have a Lien upon the Trust Estate
for any such fee not paid by Lessee as contemplated by Section 9.2 of the
Participation Agreement and such Lien shall entitle Owner Trustee to priority
as to payment thereof over payment to any other Person under this Trust
Agreement; provided, that such Lien shall be subject and subordinate in all
events to the Lien of the Trust Indenture; and provided, further, that Owner
Trustee shall have no right to exercise, and shall not exercise, any rights or
remedies Owner Trustee may have with respect to such Lien unless and until the
Secured Obligations have been paid and performed in full.

6.8 TAX RETURNS

Owner Trustee shall be responsible for the keeping of all appropriate
books and records relating to the receipt and disbursement of all monies under
this Trust Agreement or any agreement contemplated hereby. Owner Participant
shall be responsible for causing to be prepared and filed all income tax
returns required to be filed by Owner Participant. Owner Trustee shall be
responsible for causing to be prepared, at the request of Owner Participant and
at the expense of Lessee, all income tax returns required to be filed with
respect to the trust created hereby and shall execute and file such returns;
provided, that Owner Trustee shall send promptly a completed copy of such
return to Owner Participant not more than sixty nor less than fifteen days
prior to the due date of the return, provided, that Owner Trustee shall have
timely received all necessary information to complete and deliver to Owner
Participant such return. Owner Participant, upon request, will furnish Owner
Trustee with all such information as may be reasonably required from Owner
Participant in connection with the preparation of such income tax returns.
Owner Trustee shall keep copies of all returns delivered to or filed by it.

SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT

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not required to be indemnified by Lessee pursuant to Section 9.1 or 9.3 of the
Participation Agreement and excluding any taxes payable by First Security on or
measured by any compensation received by First Security for its services under
this Trust Agreement), claims, actions, suits, costs, expenses or disbursements
(including, without limitation, reasonable legal fees and expenses, but
excluding internal costs and expenses such as salaries and overhead, and
including, without limitation, any liability of an owner, any strict liability
and any liability without fault) of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against First Security (whether or not also
indemnified against by Lessee under the Lease or under the Participation
Agreement or also indemnified against by any other Person; provided, that Owner
Participant shall be subrogated to the rights of Owner Trustee against Lessee
or any other indemnitor) in any way relating to or arising out of this Trust
Agreement or any of the other Operative Agreements or the enforcement of any of
the terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, nonacceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft (including, without limitation, latent and other
defects, whether or not discoverable, and any claim for patent, trademark or
copyright infringement), or in any way relating to or arising out of the
administration of the Trust Estate or the action or inaction of Owner Trustee,
under this Trust Agreement, except (a) in the case of gross negligence or
willful misconduct on the part of First Security, in its individual capacity or
as Owner Trustee, in the performance or nonperformance of its duties under this
Trust Agreement or under any of the other Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its
covenants) in Section 6.3, in Section 6.03 of the Trust Indenture, in Section 4
of the Lease, in Section 6.3 of the Participation Agreement or elsewhere in any
of the other Operative Agreements or (c) as may result from a breach by First
Security of its covenant in the last sentence of Section 5.4.1 or (d) in the
case of the failure to use ordinary care on the part of First Security, in its
individual capacity or as Owner Trustee, in the receipt or disbursement of funds
or in connection with its obligation to invest funds pursuant to Section 4 of
the Participation Agreement, Section 4.4 of the Lease or Section 4.3 hereof or
in compliance with the provisions of the first sentence of Section 6.8 or (e)
any liability on the part of Owner Trustee

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arising out of its negligence or willful or negligent misconduct in connection
with its obligations under Section 5.1, 6.8 or 9.2 hereof or Section 4.01 of
the Trust Indenture, or (f) those claims arising under any circumstances or
upon any terms where Lessee would not have been required to indemnify First
Security pursuant to Section 9.1 or 9.3 of the Participation Agreement;
provided, that before asserting its right to indemnification, if any, pursuant
to this Section 7, First Security shall first demand its corresponding right to
indemnification pursuant to Section 9 of the Participation Agreement (but need
not exhaust any or all remedies available thereunder). The indemnities
contained in this Section 7 extend to First Security only in its individual
capacity and shall not be construed as indemnities of the Trust Indenture
Estate or the Trust Estate (except to the extent, if any, that First Security
has been reimbursed by the Trust Indenture Estate or the Trust Estate for
amounts covered by the indemnities contained in this Section 7). The
indemnities contained in this Section 7 shall survive the termination of this
Trust Agreement. In addition, if necessary, First Security shall be entitled
to indemnification from the Trust Estate, subject to the Lien of the Trust
Indenture, for any liability, obligation, loss, damage, penalty, tax, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Section 7 to the extent not reimbursed by Lessee, Owner Participant or
others, but without releasing any of them from their respective agreements of
reimbursement; and, to secure the same First Security shall have a lien on the
Trust Estate, subject to the lien of the Trust Indenture and subject further to
the provisions of Section 6.7, which shall be prior to any interest therein of
Owner Participant. The payor of any indemnity under this Section 7 shall be
subrogated to any right of the person indemnified in respect of the matter as
to which such indemnity was paid.

SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST

8.1 TRANSFER OF INTEREST

All provisions of Section 10 of the Participation Agreement shall
(with the same force and effect as if set forth in full in this Section 8.1) be
applicable to any assignment, conveyance or other transfer by Owner Participant
of any of its right, title or interest in and to the Participation Agreement,
the Trust Estate or this Trust Agreement. If there is more than one Owner
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Owner Participant of any of its right, title or interest in and to this Trust
Agreement or the Trust Estate shall be valid unless each other Owner
Participant's prior written consent (which consent may be withheld in the sole
discretion of such other Owner Participant) is given to such assignment,
conveyance or other transfer.

8.2 ACTIONS OF OWNER PARTICIPANTS

If at any time prior to the termination of this Trust Agreement there
is more than one Owner Participant, then, subject to Section 11.5, during such
time, if any action is required to be taken by all Owner Participants and
whenever any direction, authorization, approval, consent, instruction or other
action is permitted to be given or taken by Owner Participant, it shall be
given or taken only upon unanimous agreement of all Owner Participants;
provided, that the termination of this Trust Agreement pursuant to Section 11.2
may be effected upon the election of any Owner Participant.

SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES

9.1 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR

9.1.1 RESIGNATION OR REMOVAL

Owner Trustee or any successor Owner Trustee (a) shall resign if
required to do so pursuant to Section 13.3 of the Participation Agreement or
upon obtaining Actual Knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and (b) may resign at any
time without cause by giving at least 60 days' prior written notice to Owner
Participant, Mortgagee and Lessee, such resignation to be effective upon the
assumption of the trusts hereunder by the successor Owner Trustee under Section
9.1.2. In addition, Owner Participant may at any time remove Owner Trustee,
with or without cause by a notice in writing delivered to Owner Trustee,
Mortgagee and Lessee, such removal to be effective upon the assumption of the
trusts hereunder by the successor Owner Trustee under Section 9.1.2, provided,
that, in the case of a removal without cause, unless a Lease Event of Default
shall have occurred and be continuing, such removal shall be subject to the
consent of Lessee (which consent shall not be unreasonably withheld). In the
case of the resignation or removal of Owner Trustee, Owner Participant may
appoint a successor Owner Trustee

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by an instrument signed by Owner Participant, with, unless a Lease Event of
Default shall have occurred and be continuing, the consent of Lessee (which
consent shall not be unreasonably withheld). If a successor Owner Trustee
shall not have been appointed within 30 days after such notice of resignation
or removal, Owner Trustee, any Owner Participant, Lessee or Mortgagee may apply
to any court of competent jurisdiction to appoint a successor Owner Trustee to
act until such time, if any, as a successor shall have been appointed as above
provided. Any successor Owner Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Owner
Trustee appointed as above provided within one year from the date of the
appointment by such court.

9.1.2 EXECUTION AND DELIVERY OF DOCUMENTS, ETC.

Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee, with a copy to Owner Participant,
Lessee and Mortgagee, an instrument accepting such appointment and assuming the
obligations of Owner Trustee, in its individual capacity and as Owner Trustee,
under the Owner Trustee Agreements, and thereupon such successor Owner Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers, duties and trusts of the predecessor Owner Trustee in the
trusts under this Trust Agreement with like effect as if originally named Owner
Trustee in this Trust Agreement; but nevertheless, upon the written request of
such successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall
duly assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
under this Section 9.1, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will take
such further actions as are requested of it by such successor Owner Trustee as
are required to cause registration of the Aircraft included in the Trust Estate
to be transferred upon the records of the FAA, or other governmental authority
having jurisdiction, into the name of the successor Owner Trustee.

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9.1.3 QUALIFICATIONS

Any successor Owner Trustee, however appointed, shall be a Citizen of
the United States and shall also be a bank or trust company organized under the
Laws of the United States or any state thereof 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 Owner Trustee under this Trust
Agreement upon reasonable or customary terms. No such successor Owner Trustee
shall be located in a jurisdiction which creates material adverse consequences
for Lessee (unless such material adverse consequences would be created by
substantially all jurisdictions where major banking or trust institutions are
located).

9.1.4 MERGER, ETC.

Any corporation into which First Security may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which First Security shall be a party,
or any corporation to which substantially all the corporate trust business of
First Security may be transferred, shall, subject to the terms of Section
9.1.3, be Owner Trustee under this Trust Agreement without further act,
provided, that such corporation shall not also be the Mortgagee.

9.2 CO-TRUSTEES AND SEPARATE TRUSTEES

(a) If at any time it shall be necessary or prudent in order to
conform to any Law of any jurisdiction in which all or any part of the Trust
Estate is located, or Owner Trustee being advised by counsel shall determine
that it is so necessary or prudent in the interest of Owner Participant or
Owner Trustee, or Owner Trustee shall have been directed to do so by Owner
Participant, Owner Trustee and Owner Participant shall execute and deliver an
agreement supplemental hereto and all other instruments and agreements
necessary or proper to constitute another bank or trust company or one or more
persons (any or all of which shall be a Citizen of the United States) approved
by Owner Trustee and Owner Participant, either to act as co-trustee, jointly
with Owner Trustee, or to act as separate trustee under this Trust Agreement
(any such co-trustee or separate trustee being herein sometimes referred to as
an "additional trustee"). In the event Owner Participant shall not have joined
in the

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execution of such agreements' supplemental hereto within ten days after the
receipt of a written request from Owner Trustee so to do, or in case a Lease
Event of Default or Indenture Event of Default shall occur and be continuing,
Owner Trustee may act under the foregoing provisions of this Section 9.2
without the concurrence of Owner Participant; and Owner Participant hereby
appoints Owner Trustee its agent and attorney-in-fact to act for it under the
foregoing provisions of this Section 9.2 in either of such contingencies.

(b) Every additional trustee under this Trust Agreement shall, to
the extent permitted by Law, be appointed and act, and Owner Trustee and its
successors shall act, subject to the following provisions and conditions:

(i) All powers, duties, obligations and rights conferred
upon Owner Trustee in respect of the custody, control and management
of monies, the Aircraft or documents authorized to be delivered under
this Trust Agreement or under the Participation Agreement shall
be exercised solely by Owner Trustee;

(ii) All other rights, powers, duties and obligations
conferred or imposed upon Owner Trustee shall be conferred or imposed
upon and exercised or performed by Owner Trustee and such additional
trustee jointly, except to the extent that under any Law of any
jurisdiction in which any particular act or acts are to be performed
(including the holding of title to the Trust Estate) Owner Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such additional trustee;

(iii) No power given to, or which it is provided hereby may
be exercised by, any such additional trustee shall be exercised under
this Trust Agreement by such additional trustee, except jointly with,
or with the consent in writing of, Owner Trustee;

(iv) No trustee under this Trust Agreement shall be
personally liable by reason of any action or omission of any other
trustee under this Trust Agreement;

(v) Owner Participant, at any time, by an instrument in
writing may remove any such additional trustee. In the event that
Owner Participant shall not have joined in the

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execution of any such instrument within ten days after the receipt of
a written request from Owner Trustee so to do, Owner Trustee shall
have the power to remove any such additional trustee without the
concurrence of Owner Participant; and Owner Participant hereby
appoints Owner Trustee its agent and attorney-in-fact to act for it in
such connection in such contingency; and

(vi) No appointment of, or action by, any additional
trustee will relieve Owner Trustee of any of its obligations under, or
otherwise affect any of the terms of, the Trust Indenture or affect
the interests of Mortgagee or the Certificate Holders in the Trust
Indenture Estate.

(c) In case any separate trustee under this Section 9.2 shall die,
become incapable of acting, resign or be removed, the title to the Trust Estate
and all rights and duties of such separate trustee shall, so far as permitted
by Law, vest in and be exercised by Owner Trustee, without the appointment of a
successor to such separate trustee.

SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER DOCUMENTS

10.1 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF

10.1.1 SUPPLEMENTS AND AMENDMENTS

Subject to Section 7.2.2 of the Participation Agreement, this Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Owner Participant. Subject
to Section 10.2, Section 9.01 of the Trust Indenture and Section 7.6.7 of the
Participation Agreement, Owner Trustee will execute any amendment, supplement
or other modification of this Trust Agreement or of any other Owner Trustee
Agreement which it is requested in writing to execute by Owner Participant,
except that Owner Trustee shall not execute any such amendment, supplement or
other modification which, by the express provisions of any of the above
documents, requires the consent of any other party unless such consent shall
have been obtained; and provided, that, without the prior written consent of
Owner Participant, (a) no such supplement, amendment or modification shall (i)
modify any of the provisions of Section 4 or this Section 10.1, (ii) reduce,
modify or amend any indemnities in favor of Owner Participant as set forth in
Section 9 of the Participation Agreement or in the

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Tax Indemnity Agreement, (iii) reduce the amount or extend the time of payment
of Basic Rent, Supplemental Rent, Stipulated Loss Value or Termination Value as
set forth in the Lease (except in accordance with Section 3 of the Lease) or
(iv) modify any of the rights of Owner Participant under the Trust Indenture
and (b) no such supplement, amendment or modification shall require Owner
Participant to invest or advance funds or shall entail any additional personal
liability or the surrender of any indemnification, claim or individual right on
the part of Owner Participant with respect to any agreement or obligation.

10.1.2 DELIVERY OF AMENDMENTS AND SUPPLEMENTS TO
CERTAIN PARTIES

A signed copy of each amendment or supplement referred to in Section
10.1.1 to which Lessee is not a party shall be delivered promptly by Owner
Trustee to Lessee, and a signed copy of each amendment or supplement referred
to in Section 10.1.1 shall be delivered promptly by Owner Trustee to Mortgagee.

10.2 DISCRETION AS TO EXECUTION OF DOCUMENTS

Prior to executing any document required to be executed by it pursuant
to the terms of Section 10.1, Owner Trustee shall be entitled to receive an
opinion of its counsel to the effect that the execution of such document is
authorized under this Trust Agreement. If in the opinion of Owner Trustee any
such document adversely affects any right, duty, immunity or indemnity in favor
of Owner Trustee under this Trust Agreement or under any other Owner Trustee
Agreement, Owner Trustee may in its discretion decline to execute such document
unless Owner Trustee is furnished with indemnification from Lessee or any other
party upon terms and in amounts reasonably satisfactory to Owner Trustee to
protect the Trust Estate and the Owner Trustee against any and all liabilities,
costs and expenses arising out of the execution of such documents.

10.3 ABSENCE OF REQUIREMENTS AS TO FORM

It shall not be necessary for any written request furnished pursuant
to Section 10.1 to specify the particular form of the proposed documents to be
executed pursuant to such Section 10.1, but it shall be sufficient if such
request shall indicate the substance thereof.

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10.4 DISTRIBUTION OF DOCUMENTS

Promptly after the execution by Owner Trustee of any document entered
into pursuant to Section 10.1, Owner Trustee shall mail, by certified mail,
postage prepaid, a conformed copy thereof to Owner Participant, but the failure
of Owner Trustee to mail such conformed copy shall not impair or affect the
validity of such document.

10.5 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST
INDENTURE SUPPLEMENT

No written request pursuant to Section 10.1 shall be required to
enable Owner Trustee to enter into, pursuant to Section 3.1 and the Lease or
the Trust Indenture, as the case may be, the Lease Supplement with Lessee and
the Trust Indenture Supplement.

SECTION 11. MISCELLANEOUS

11.1 TERMINATION OF TRUST AGREEMENT

This Trust Agreement and the trusts created hereby shall be of no
further force or effect upon the earlier of (a) both the final discharge of the
Trust Indenture pursuant to Section 10.01 thereof and the sale or other final
disposition by Owner Trustee of all property constituting part of the Trust
Estate and the final distribution by Owner Trustee of all monies or other
property or proceeds constituting part of the Trust Estate in accordance with
Section 4, provided, that at such time Lessee shall have fully complied with
all of the terms of the Lease and the Participation Agreement or (b) 21 years
less one day after the death of the last survivor of all of the descendants of
the grandparents of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ living on the date of the earliest
execution of this Trust Agreement by any party hereto, but if this Trust
Agreement and the trusts created hereby shall be or become authorized under
applicable Law to be valid for a period commencing on the 21st anniversary of
the death of such last survivor (or, without limiting the generality of the
foregoing, if legislation shall become effective providing for the validity of
this Trust Agreement and the trusts created hereby for a period in gross
exceeding the period for which this Trust Agreement and the trusts created
hereby are hereinabove stated to extend and be valid), then this Trust
Agreement and the trusts created hereby shall not terminate under this clause
(b) but shall extend to and continue in effect, but only

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if such nontermination and extension shall then be valid under applicable Law,
until the day preceding such date as the same shall, under applicable Law,
cease to be valid; otherwise this Trust Agreement and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
Except as expressly set forth in Section 11.2, this Trust Agreement and the
trusts created hereby may not be revoked by Owner Participant.

11.2 TERMINATION AT OPTION OF THE OWNER PARTICIPANT

Notwithstanding Section 11.1 hereof, this Agreement and trust created
hereby shall terminate and the Trust Estate shall be distributed to the Owner
Participant, and this Agreement shall be of no further force and effect, upon
the election of the Owner Participant by notice to the Owner Trustee, if such
notice shall be accompanied by the written agreement (in form and substance
satisfactory to the Owner Trustee) of the Owner Participant assuming all
obligations of the Owner Trustee under or contemplated by the Operative
Agreements or incurred by it as trustee hereunder and releasing the Owner
Trustee therefrom; provided, however, that such notice may be given only after
the time the Lien of the Trust Indenture is discharged under Section 10.01 of
the Trust Indenture and after the Lease shall no longer be in effect.

11.3 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST ESTATE

No Owner Participant shall have legal title to any part of the Trust
Estate. No transfer, by operation of Law or otherwise, of any right, title and
interest of Owner Participant in and to the Trust Estate under this Trust
Agreement shall operate to terminate this Trust Agreement or the trusts under
this Trust Agreement or entitle any successors or transferees of Owner
Participant to an accounting or to the transfer of legal title to any part of
the Trust Estate.

11.4 ASSIGNMENT, SALE, ETC. OF AIRCRAFT

Any assignment, sale, transfer or other conveyance of the Aircraft by
Owner Trustee made pursuant to the terms of this Trust Agreement or of the
Lease or the Participation Agreement shall bind Owner Participant and shall be
effective to transfer or convey all right, title and interest of Owner Trustee
and Owner Participant in and to the Aircraft. No purchaser or other

TRUST AGREEMENT BASE
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grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such assignment, sale, transfer or conveyance or as
to the application of any sale or other proceeds with respect thereto by Owner
Trustee.

11.5 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES ONLY

Except for the terms of Section 10 of the Participation Agreement
incorporated in Section 8 and except as otherwise provided in Sections 5.1,
6.7, 9, 10.1 and 11.1, nothing in this Trust Agreement, whether express or
implied, shall be construed to give any person other than Owner Trustee and
Owner Participant any legal or equitable right, remedy or claim under or in
respect of this Trust Agreement; and this Trust Agreement shall be held to be
for the sole and exclusive benefit of Owner Trustee and Owner Participant.

11.6 CITIZENSHIP OF OWNER PARTICIPANT

If at any time there shall be more than one Owner Participant, then
any Owner Participant who shall cease to be a Citizen of the United States
shall have no voting or similar rights under this Trust Agreement and shall
have no right to direct, influence or limit the exercise of, or to prevent the
direction or influence of, or place any limitation on the exercise of, Owner
Trustee's authority or to remove Owner Trustee.

11.7 NOTICES

Unless otherwise expressly permitted by the terms of this Trust
Agreement, all notices, requests, demands, authorizations, directions,
consents, waivers and other communications required or permitted to be made,
given, furnished or filed under this Trust Agreement shall be in writing, shall
refer specifically to this Trust Agreement and shall be personally delivered,
sent by telecopy, telex or other means of electronic facsimile or
telecommunication transmission, sent by registered mail or certified mail,
return receipt requested, postage prepaid, or sent by overnight courier
service, in each case to the respective telex, telecopy or other number or
address set forth for such party in Schedule 1 to the Participation Agreement,
or to such other telex, telecopy or other number or address as each party
hereto may hereafter specify by notice to the other parties hereto. Each such
notice, request, demand, authorization,

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direction, consent, waiver or other communication shall be effective when
received or, if made, given, furnished or filed (a) by telecopy or other means
of electronic facsimile or telecommunication transmission, when confirmed, or
(b) by registered or certified mail, three Business Days after being deposited,
properly addressed, in the U.S. mail.

11.8 SEVERABILITY

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

11.9 WAIVERS, ETC.

No term or provision hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing entered into in
compliance with the terms of Section 10; and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific purpose
given.

11.10 COUNTERPARTS

This Trust Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument.

11.11 BINDING EFFECT, ETC.

All covenants and agreements contained in this Trust Agreement shall
be binding upon, and inure to the benefit of, Owner Trustee and its successors
and assigns, and Owner Participant and its successors and, to the extent
permitted by Section 8, assigns. Any request, notice, direction, consent,

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waiver or other instrument or action by Owner Participant shall bind its
successors and assigns.

11.12 HEADINGS; REFERENCES

The headings and the table of contents used in this Trust Agreement
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof and shall not in any way affect the construction of,
or be taken into consideration in interpreting, this Trust Agreement.

11.13 GOVERNING LAW

THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF
THE STATE OF UTAH , INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.

[This space intentionally left blank.]

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

By
------------------------------------

Name:

Title:

FIRST SECURITY BANK, NATIONAL ASSOCIATION

By
------------------------------------

Name:

Title:

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EXHIBIT B to

Note Purchase Agreement

FORM OF DELIVERY NOTICE
408
EXHIBIT B to
Note Purchase Agreement

FORM OF DELIVERY NOTICE

Dated as of ____________, __ 199_

To each of the addressees listed

Re: Delivery Notice in accordance with Note
Purchase Agreement referred to below

Gentlemen:

Reference is made to the Note Purchase Agreement among Continental
Airlines, Inc. (the "Company"), Wilmington Trust Company, as Pass Through
Trustee under each of the Pass Through Trust Agreements (as defined therein)
(the "Pass Through Trustee"), Wilmington Trust Company, as Subordination Agent
(the "Subordination Agent"), First Security Bank, National Association, as
Escrow Agent (the "Escrow Agent") and Wilmington Trust Company, as Paying Agent
(the "Paying Agent") (as in effect from time to time, the "Note Purchase
Agreement"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings set forth in the Note Purchase Agreement or, to the
extent not defined therein, the Intercreditor Agreement.

Pursuant to Section l(b) of the Note Purchase Agreement, the
undersigned hereby notifies you, in respect of the Boeing _______ aircraft with
manufacturer's serial number ___________ (the "Aircraft"), of the following:

(1) The Company has elected to treat the Aircraft as a [Leased]1/[Owned]1
Aircraft;

(2) The Scheduled Delivery Date of the Aircraft is ________, __, 199_; and

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

1. To be inserted in the case of an Owned Aircraft.

2. To be inserted in the case of an Owned Aircraft.
409
2

(3) The aggregate amount of each series of Equipment Notes to be issued,
and purchased by the respective Pass Through Trustees, on the
Scheduled Delivery Date, in connection with the financing of such
Aircraft is as follows:

(a) the Class A Trustee shall purchase Series A Equipment Notes in
the amount of $_________ ;

(b) the Class B Trustee shall purchase Series B Equipment Notes in
the amount of $_________ ;

(d) the Class C-II Trustee shall purchase Series C Equipment Notes
in the amount of $___________.

The Company hereby instructs the Class A Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated ___________ ___,
199_ [a date which is no later than one Business Day prior to the Scheduled
Delivery Date] and attach thereto a Notice of Purchase Withdrawal dated such
date completed as set forth on Exhibit A hereto and (ii) deliver such
Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable
Escrow Agent.

The Company hereby instructs the Class B Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated ___________ __, 199_
[a date which is no later than one Business Day prior to the Scheduled Delivery
Date] and attach thereto a Notice of Purchase Withdrawal dated such date
completed as set forth on Exhibit B hereto and (ii) deliver such Withdrawal
Certificate and Notice of Purchase Withdrawal to the applicable Escrow Agent.

The Company hereby instructs the Class C-I Trustee to (i)
execute a Withdrawal Certificate in the form of Annex A hereto dated
____________ __, 199_ [a date which is no later than one Business Day prior to
the Scheduled Delivery Date] and attach thereto a Notice of Purchase Withdrawal
dated such date completed as set forth on Exhibit C-I hereto and (ii) deliver
such Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable
Escrow Agent.

410
3

The Company hereby instructs the Class C-II Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated ___________ ___,
199_ [a date which is no later than one Business Day prior to the Scheduled
Delivery Date] and attach thereto a Notice of Purchase Withdrawal dated such
date completed as set forth on Exhibit C-II hereto and (ii) deliver such
Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable
Escrow Agent.

The Company hereby instructs each Pass Through Trustee to (i) purchase
Equipment Notes of a series and in an amount set forth opposite such Pass
Through Trustee in clause (3) above with a portion of the proceeds of the
withdrawals of Deposits referred to in the applicable Notice of Purchase
Withdrawal referred to above and (ii) re- deposit with the Depositary the
excess, if any, of the amount so withdrawn over the purchase price of such
Equipment Notes.

The Company hereby instructs each Pass Through Trustee to (a) enter
into the Participation Agreement dated as of _____________ ___; 199_ among the
Company, as [Lessee]2/[Owner]3, the Subordination Agent, the Pass Through
Trustee, Wilmington Trust Company, as Mortgagee [and Loan Participant, First
Security Bank, National Association, as Owner Trustee and _____________, as
Owner Participant]4, (b) perform its obligations thereunder and (c) deliver
such certificates, documents and legal opinions relating to such Pass Through
Trustee as required thereby.

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

3. To be inserted in the case of a Leased Aircraft.
4. To be inserted in the case of an Owned Aircraft.
5. To be inserted in the case of a Leased Aircraft.

411
4

[The Company hereby certifies that the Owner Participant with respect
to the Aircraft is (a) not an Affiliate of the Company and (b) a [Qualified
Owner Participant/person whose obligations under the Owner Participant
Agreements (as defined in the Participation Agreement) are guaranteed by a
Qualified Owner Participant].(6)

Yours faithfully,

Continental Airlines, Inc.

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

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

6. To be inserted in the case of a Leased Aircraft.

412

SCHEDULE A

Wilmington Trust Company, as
Pass Through Trustee, Subordination Agent and Paying Agent
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

First Security Bank, National Association, as Escrow Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

413

ANNEX A

WITHDRAWAL CERTIFICATE
(Class _)(7)

First Security Bank, National Association,
as Escrow Agent

Dear Sirs:

Reference is made to the Escrow and Paying Agent Agreement, dated as
of March 21, 1997 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at (212)
325-8319.

Very truly yours,

WILMINGTON TRUST COMPANY not in its
individual capacity by solely as
Pass Through Trustee

By:______________

Name:
Title:

Dated: __________ __,199_

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

7. To be inserted in the case of a Leased Aircraft.

414

EXHIBIT A

NOTICE OF PURCHASE WITHDRAWAL

CREDIT SUISSE FIRST BOSTON
New York Branch
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇

Gentlemen:

Reference is made to (i) the Deposit Agreement (Class A) dated as of
March 21, 1997 (the "Deposit Agreement") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "Depositary").

In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$____________, Account No. __________.

The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [__________________, Account No. ________, Reference:
_____________] on ____________ ___, 199_, upon the telephonic request of a
representative of the Pass Through Trustee.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent

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

Dated: __________ __,199_

415

EXHIBIT B

NOTICE OF PURCHASE WITHDRAWAL

Gentlemen:

Reference is made to (i) the Deposit Agreement (Class B) dated as of
March 21, 1997 (the "Deposit Agreement") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "Depositary").

In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$___________, Account No. ___________.

The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [______________, Account No. ________________, Reference:
_____________] on ___________ ___, 199_, upon the telephonic request of a
representative of the Pass Through Trustee.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent

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

Name:
Title:

Dated: __________ __,199_

416

EXHIBIT C-I

NOTICE OF PURCHASE WITHDRAWAL

Gentlemen:

Reference is made to (i) the Deposit Agreement (Class C-I) dated as of
March 21, 1997 (the "Deposit Agreement") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "Depositary").

In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_______________, Account No. ________________.

The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [_____________, Account No. ________________, Reference:
_____________] on _______________ __, 199_, upon the telephonic request of a
representative of the Pass Through Trustee.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent

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

Dated: __________ __,199_

417

EXHIBIT C-II

NOTICE OF PURCHASE WITHDRAWAL

Gentlemen:

In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_______________, Account No. ________________.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent

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

Dated: __________ __,199_

418

EXHIBIT C-1 to
Note Purchase Agreement

FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT
419
CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION
SET FORTH IN SECTION 7 OF THIS AGREEMENT

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

PARTICIPATION AGREEMENT ___

Dated as of ____________

Among

CONTINENTAL AIRLINES, INC.,

Owner,

and

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

One Boeing Model ______ Aircraft
Bearing Manufacturer's Serial No. ______

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT
420

CONTENTS

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

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

SECTION 3. [Intentionally omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.1 Conditions Precedent to the Obligations of the Pass Through Trustees . . . . . . . . . . . . . . . . . 2
4.2 Conditions Precedent to Obligations of Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Conditions Precedent to Obligations of Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Post-Registration Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Owner's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 WTC's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Covenants of Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Covenants of WTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Covenants of Note Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Agreements . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 7. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 8. INDEMNIFICATION AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 General Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 General Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.4 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.6 Benefit of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.1 Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.2 Effect of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE i

421

SECTION 10. SECTION 1110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECTION 11. CHANGE OF CITIZENSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.2 Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.4 Reproduction of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.6 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.9 Third-Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

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

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE ii

422

PARTICIPATION AGREEMENT ____

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

RECITALS

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

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

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

D. Owner and Mortgagee, concurrently with the execution and delivery
hereof, have entered into the Trust Indenture for the benefit of the Note
Holders, pursuant to which, among other things, Owner agrees (1) to issue
Equipment Notes, in the amounts and otherwise as provided in the Trust
Indenture, and (2) to mortgage, pledge and assign to Mortgagee all of Owner's
right,

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 1
423

title and interest in the Collateral to secure the Secured Obligations,
including, without limitation, Owner's obligations under the Equipment Notes.

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

SECTION 1. DEFINITIONS AND CONSTRUCTION

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

SECTION 2. SECURED LOANS; CLOSING

2.1 MAKING OF LOANS AND ISSUANCE OF EQUIPMENT NOTES

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

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

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

2.2 CLOSING

(a) The Closing of the transactions contemplated hereby shall take
place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, One

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 2
▇▇▇

▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as the
parties shall agree.

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

SECTION 3. [INTENTIONALLY OMITTED]

SECTION 4. CONDITIONS PRECEDENT

4.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PASS THROUGH
TRUSTEES

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

4.1.1 EQUIPMENT NOTES

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

4.1.2 DELIVERY OF DOCUMENTS

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

(i) this Agreement;

(ii) the Trust Indenture;

(iii) the initial Trust Indenture Supplement;

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

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 3
425

(vi) the Bills of Sale;

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

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

(ix) the Financing Statements;

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

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

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

(D) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special
counsel for the Pass Through Trustees, substantially in the form
set forth in Exhibit D;

(E) an opinion of ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special
counsel in Oklahoma City, Oklahoma, substantially in the form of
Exhibit E; and

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 4
426
(xi) a copy of a current, valid Standard Certificate of
Airworthiness for the Aircraft duly issued by the FAA, together with a
copy of a duly executed application for registration of the Aircraft
with the FAA in the name of the Owner.

4.1.3 PERFECTED SECURITY INTEREST

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

4.1.4 VIOLATION OF LAW

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

4.1.5 REPRESENTATIONS, WARRANTIES AND COVENANTS

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

4.1.6 NO EVENT OF DEFAULT

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 5
427
4.1.7 NO EVENT OF LOSS

4.1.8 TITLE

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

4.1.9 CERTIFICATION

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

4.1.10 SECTION 1110

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

4.1.11 FILING

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

4.1.12 NO PROCEEDINGS

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 6
428
4.1.13 GOVERNMENTAL ACTION

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

4.1.14 NOTE PURCHASE AGREEMENT

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

4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE

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

4.2.1 DOCUMENTS

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

4.2.2 OTHER CONDITIONS PRECEDENT

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

4.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER

The obligation of Owner to participate in the transaction contemplated
hereby on the Closing Date is subject to the

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 7
429

satisfaction or waiver by Owner, on or prior to the Closing Date, of the
conditions precedent set forth below in this Section 4.3.

4.3.1 DOCUMENTS

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

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

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

4.3.2 OTHER CONDITIONS PRECEDENT

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

4.4 POST REGISTRATION OPINION

Promptly upon the registration of the Aircraft and the recordation of
the FAA Filed Documents pursuant to the Act, Owner will cause ▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel in Oklahoma

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 8
430

City, Oklahoma, to deliver to Owner, each Pass Through Trustee and Mortgagee a
favorable opinion or opinions addressed to each of them with respect to such
registration and recordation.

SECTION 5. REPRESENTATIONS AND WARRANTIES

5.1 OWNER'S REPRESENTATIONS AND WARRANTIES

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

5.1.1 ORGANIZATION; QUALIFICATION

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

5.1.2 CORPORATE AUTHORIZATION

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

5.1.3 NO VIOLATION

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 9
431

in a Material Adverse Change to Owner), or result in the creation of any Lien
(other than as permitted under the Trust Indenture) upon the Aircraft under, any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, lease, loan or other material agreement, instrument or document to
which Owner is a party or by which Owner or any of its properties is bound.

5.1.4 APPROVALS

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

5.1.5 VALID AND BINDING AGREEMENTS

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

5.1.6 LITIGATION

Except as set forth in Owner's most recent Annual Report on Form 10-K,
as amended, filed by Owner with the SEC on or prior to the Closing Date, or in
any Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by Owner
with the SEC subsequent to such Form 10-K and on or prior to the Closing Date,
no action,

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 10
432

claim or proceeding is now pending or, to the Actual Knowledge of Owner,
threatened, against Owner, before any court, governmental body, arbitration
board, tribunal or administrative agency, which is reasonably likely to be
determined adversely to Owner and if determined adversely to Owner would result
in a Material Adverse Change.

5.1.7 FINANCIAL CONDITION

The audited consolidated balance sheet of Owner with respect to
Owner's most recent fiscal year included in Owner's most recent Annual Report
on Form 10-K, as amended, filed by Owner with the SEC, and the related
consolidated statements of operations and cash flows for the period then ended
have been prepared in accordance with GAAP and fairly present in all material
respects the financial condition of Owner and its consolidated subsidiaries as
of such date and the results of its operations and cash flows for such period,
and since the date of such balance sheet, there has been no material adverse
change in such financial condition or operations of Owner, except for matters
disclosed in (a) the financial statements referred to above or (b) any
subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by
Owner with the SEC on or prior to the date hereof.

5.1.8 REGISTRATION AND RECORDATION

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

5.1.9 CHIEF EXECUTIVE OFFICE

The chief executive office (as such term is defined in Article 9 of
the UCC) of Owner is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 11
433

5.1.10 NO EVENT OF LOSS

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

5.1.11 COMPLIANCE WITH LAWS

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

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

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

5.1.12 SECURITIES LAWS

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

5.1.13 BROKER'S FEES

No Person acting on behalf of Owner is or will be entitled to any
broker's fee, commission or finder's fee in connection with the Transactions.

5.1.14 SECTION 1110

Mortgagee is entitled to the benefits of Section 1110 (as currently in
effect) with respect to the right to take possession

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434
of the Airframe and Engines as provided in the Trust Indenture in the event of
a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

5.2 WTC'S REPRESENTATIONS AND WARRANTIES

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

5.2.1 ORGANIZATION, ETC.

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

5.2.2 CORPORATE AUTHORIZATION

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

5.2.3 NO VIOLATION

The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
of the Pass Through Trustee Agreements and the Operative Agreements to which it
is a party, the performance by WTC, in its individual capacity or as Mortgagee,
a Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date of the
transactions contemplated thereby, do not and will not (a) violate any
provision of the Certificate of Incorporation or By-Laws of WTC, (b) violate
any Law applicable to or binding on WTC, in its individual capacity or (except
in the case of any Law relating to any Plan) as Mortgagee, a Pass Through
Trustee or Subordination Agent, or (c) violate or constitute any default

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435
under (other than any violation or default that would not result in a Material
Adverse Change to WTC, in its individual capacity or Mortgagee, a Pass Through
Trustee or Subordination Agent), or result in the creation of any Lien (other
than the lien of the Trust Indenture) upon any property of WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, or any of WTC's subsidiaries under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, loan or other
agreement, instrument or document to which WTC, in its individual capacity or
as Mortgagee, a Pass Through Trustee or Subordination Agent, is a party or by
which WTC, in its individual capacity or as Mortgagee, a Pass Through Trustee
or Subordination Agent, or any of their respective properties is bound.

5.2.4 APPROVALS

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

5.2.5 VALID AND BINDING AGREEMENTS

The Pass Through Trustee Agreements and the Operative Agreements to
which it is a party have been duly authorized, executed and delivered by WTC
and, assuming the due authorization, execution and delivery by the other party
or parties thereto, constitute the legal, valid and binding obligations of WTC,
in its individual capacity or as Mortgagee, a Pass Through Trustee or
Subordination Agent, as the

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 14
436
case may be, and are enforceable against WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
in accordance with the respective terms thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar Laws affecting the rights of creditors generally
and general principles of equity, whether considered in a proceeding at law or
in equity.

5.2.6 CITIZENSHIP

WTC is a Citizen of the United States.

5.2.7 NO LIENS

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

5.2.8 LITIGATION

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

5.2.9 SECURITIES LAWS

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 15
437

5.2.10 INVESTMENT

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

5.2.11 TAXES

There are no Taxes payable by any Applicable Pass Through Trustee or
WTC, as the case may be, imposed by the State of Delaware or any political
subdivision or taxing authority thereof in connection with the execution,
delivery and performance by such Pass Through Trustee or WTC, as the case may
be, of this Agreement or any of the Pass Through Trustee Agreements (other than
franchise or other taxes based on or measured by any fees or compensation
received by any such Pass Through Trustee or WTC, as the case may be, for
services rendered in connection with the transactions contemplated by any of
the Pass Through Trust Agreements), and there are no Taxes payable by any
Applicable Pass Through Trustee or WTC, as the case may be, imposed by the
State of Delaware or any political subdivision thereof in connection with the
acquisition, possession or ownership by any such Pass Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured
by any fees or compensation received by any such Pass Through Trustee or WTC,
as the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be taxable as
corporations, but, rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code or as a partnership under
Subchapter K of the Code, such trusts will not be subject to any Taxes imposed
by the State of Delaware or any political subdivision thereof;

5.2.12 BROKER'S FEES

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

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438

SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS

6.1 COVENANTS OF OWNER

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

6.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER

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

6.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

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

6.1.3 CERTAIN ASSURANCES

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

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

(c) Owner, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any combination,

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 17
439
consolidation or merger of the Owner, or any relocation of its chief executive
office) in respect of the Financing Statements to be prepared and, subject only
to the execution and delivery thereof by Mortgagee, duly and timely filed and
recorded, or filed for recordation, to the extent permitted under the Act (with
respect to the FAA Filed Documents) or the UCC or similar law of any other
applicable jurisdiction (with respect to such other documents).

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

6.1.4 SECURITIES LAWS

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

6.2 COVENANTS OF WTC

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

6.2.1 LIENS

WTC (a) will not directly or indirectly create, incur, assume or suffer
to exist any Lien attributable to it on or with respect to all or any part of
the Collateral or the Aircraft, (b) will, at its own cost and expense, promptly
take such action

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440
as may be necessary to discharge any Lien attributable to WTC on all or any
part of the Collateral or the Aircraft and (c) will personally hold harmless
and indemnify Owner, each Note Holder, each of their respective Affiliates,
successors and permitted assigns, and the Collateral from and against (i) any
and all Expenses, and (ii) any interference with the possession, operation or
other use of all or any part of the Aircraft, imposed on, incurred by or
asserted against any of the foregoing as a consequence of any such Lien.

6.2.2 SECURITIES ACT

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

6.2.3 PERFORMANCE OF AGREEMENTS

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

6.2.4 WITHHOLDING TAXES

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 19
441

6.3 COVENANTS OF NOTE HOLDERS

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

6.3.1 WITHHOLDING TAXES

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

6.3.2 TRANSFER; COMPLIANCE

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

(b) Except for the transfer of the interests of each Applicable
Pass Through Trustee in the Equipment Notes to the trustee of the Related Trust
(as defined in each Applicable Pass Through Trust Agreement) in accordance with
the Applicable Pass Through Trust Agreement, each Note Holder will not sell,
assign, convey, exchange or otherwise transfer any Equipment Note or any
interest in, or represented by, any Equipment Note (it being understood that
this provision is not applicable to the Pass Through Certificates) unless the
proposed transferee thereof first provides Owner with both of the following:

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 20
442
rulings, regulations or court decisions thereunder to constitute, the
assets of any Plan or (b) the transfer, and subsequent holding, of such
Equipment Note or interest shall not involve or give rise to a
transaction that constitutes a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code
involving Owner, a Pass Through Trustee, the Subordination Agent or the
proposed transferee (other than a transaction that is exempted from the
prohibitions of such sections by applicable provisions of ERISA or the
Code or administrative exemptions or regulations issued thereunder);
and

6.4 AGREEMENTS

6.4.1 QUIET ENJOYMENT

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

6.4.2 CONSENTS

Each Applicable Pass Through Trustee, Subordination Agent and Mortgagee
covenants and agrees, for the benefit of Owner, that it shall not unreasonably
withhold its consent to any consent or approval requested of it under the terms
of any of the Operative Agreements which by its terms is not to be unreasonably
withheld.

6.4.3 INSURANCE

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

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443
obtained or maintained by Owner pursuant to Section 4.06 of the Trust
Indenture.

6.4.4 EXTENT OF INTEREST OF NOTE HOLDERS

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

6.4.5 FOREIGN REGISTRATION

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

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

(i) each of the following requirements is satisfied:

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

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

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

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

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

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444
(B) after giving effect to such change in
registration, the Lien of the Trust Indenture on the
Owner's right, title and interest in and to the Aircraft shall
continue as a valid and duly perfected first priority security
interest and all filing, recording or other action necessary
to protect the same shall have been accomplished (or, if such
opinion cannot be given at the time of such proposed change in
registration because such change in registration is not yet
effective, (1) the opinion shall detail what filing, recording
or other action is necessary and (2) the Mortgagee shall have
received a certificate from Owner that all possible
preparations to accomplish such filing, recording and other
action shall have been done, and such filing, recording and
other action shall be accomplished and a supplemental opinion
to that effect shall be delivered to the Mortgagee on or prior
to the effective date of such change in registration;

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

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

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 23
445

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

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

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

6.4.6 INTEREST IN CERTAIN ENGINES

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 24
446
indenture or other security agreement and owned by such lessor or conditional
seller or subject to a trust indenture or security interest in favor of such
mortgagee or secured party.

SECTION 7. CONFIDENTIALITY

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

SECTION 8. INDEMNIFICATION AND EXPENSES

8.1 GENERAL INDEMNITY

[INTENTIONALLY OMITTED]

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447
8.2 EXPENSES

8.2.1 INVOICES AND PAYMENT

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

8.2.2 PAYMENT OF OTHER EXPENSES

Owner shall pay (i) the ongoing fees and expenses of Mortgagee, and
(ii) all reasonable out-of-pocket costs and expenses (including the reasonable
fees and disbursements of

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 32
448
counsel) incurred by Mortgagee or any Note Holder attributable to any waiver,
amendment or modification of any Operative Agreement to the extent requested by
Owner.

8.3 GENERAL TAX INDEMNITY

[INTENTIONALLY OMITTED]

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 33
449
SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST

9.1 NOTE HOLDERS

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 44
450
of Equipment Notes in connection with such Transfer, shall be deemed to be
bound by all of the covenants of Note Holders contained in the Operative
Agreements.

9.2 EFFECT OF TRANSFER

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

SECTION 10. SECTION 1110

It is the intention of each of the Owner, the Note Holders (such
intention being evidenced by each of their acceptance of an Equipment Note),
and Mortgagee that Mortgagee shall be entitled to the benefits of Section 1110
in the event of a case under Chapter 11 of the Bankruptcy Code in which Owner
is a debtor.

SECTION 11. CHANGE OF CITIZENSHIP

11.1 GENERALLY

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 45
451

11.2 MORTGAGEE

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

SECTION 12. MISCELLANEOUS

12.1 AMENDMENTS

12.2 SEVERABILITY

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 46
452

12.3 SURVIVAL

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

12.4 REPRODUCTION OF DOCUMENTS

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

12.5 COUNTERPARTS

12.6 NO WAIVER

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 47
453
it. No notice to or demand on any party hereto in any case shall, unless
otherwise required under this Agreement, entitle such party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any party hereto to any other or further action in any
circumstances without notice or demand.

12.7 NOTICES

12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

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

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 48
454
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT.

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

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

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

12.9 THIRD-PARTY BENEFICIARY

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 49
455
of any party hereto, or have any benefit or interest, arising out of this
Agreement.

12.10 ENTIRE AGREEMENT

12.11 FURTHER ASSURANCES

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

[This space intentionally left blank]

OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 50
456

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

CONTINENTAL AIRLINES, INC.,
Owner

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

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

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

WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly provided
herein, but solely as Pass Through
Trustee under the Pass Through
Trust Agreement for the Continental
Airlines Pass Through Trust,
1997-1A-0

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT SIGNATURE PAGE
457

WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly provided herein,
but solely as Pass Through Trustee
under the Pass Through Trust
Agreement for the Continental
Airlines Pass Through Trust,
1997-1B-0

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

WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly provided
herein, but solely as Pass Through
Trustee under the Pass Through Trust
Agreement for the Continental
Airlines Pass Through Trust,
1997-[1C-I][1C-II]-0

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

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

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

OWNED AIRCRAFT PARTICIPATION AGREEMENT SIGNATURE PAGE

458
------------------------
SCHEDULE 1
TO
PARTICIPATION AGREEMENT
------------------------

ACCOUNTS; ADDRESSES

ACCOUNTS FOR PAYMENTS ADDRESS FOR NOTICES
--------------------- -------------------

CONTINENTAL AIRLINES, Continental Airlines, Inc.
INC. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice
President and Chief
Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON TRUST Wilmington Trust Company
COMPANY, MORTGAGEE One ▇▇▇▇▇▇ Square
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS One ▇▇▇▇▇▇ Square
SUBORDINATION AGENT ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS PASS One ▇▇▇▇▇▇ Square
THROUGH TRUSTEE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
FOR THE 1997-1A ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PASS THROUGH TRUST Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

SCHEDULE 1 TO OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 1
459

ACCOUNT FOR PAYMENTS ADDRESS FOR NOTICES
-------------------- -------------------

WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS PASS One ▇▇▇▇▇▇ Square
THROUGH TRUSTEE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
FOR THE 1997-1B ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PASS THROUGH TRUST Attention: Corporate Trust
Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS PASS One ▇▇▇▇▇▇ Square
THROUGH TRUSTEE ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1997-[1C-I] [1C-II] Attention: Corporate Trust
PASS THROUGH TRUST Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇

SCHEDULE 1 TO OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 2
460
---------------
SCHEDULE 2
TO
PARTICIPATION
AGREEMENT
---------------

COMMITMENTS
PASS THROUGH SERIES OF DOLLAR AMOUNT
TRUSTEE EQUIPMENT NOTES OF LOAN
------------ --------------- -------------

SCHEDULE 2 TO OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 1
461
--------------------
SCHEDULE 3 - CERTAIN
TERMS
PARTICIPATION
AGREEMENT
--------------------

CERTAIN TERMS

DEFINED TERM DEFINITION
------------ ----------

Minimum Liability Insurance Amount

Threshold Amount

SCHEDULE 3 TO OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 1

462
--------------------------------
SCHEDULE 4 - PERMITTED COUNTRIES
PARTICIPATION AGREEMENT
--------------------------------

PERMITTED COUNTRIES

Argentina Malta

Australia Mexico

Austria Morocco

Bahamas Netherlands

Belgium New Zealand

Brazil Norway

Canada Paraguay

Chile Peoples Republic of China

Denmark Philippines

Egypt Portugal

Ecuador Republic of China (Taiwan)

Finland Singapore

France South Africa

Germany South Korea

Greece Spain

Hungary Sweden

Iceland Switzerland

India Thailand

Indonesia Tobago

Ireland Trinidad

Italy United Kingdom

Japan Uruguay

Luxembourg Venezuela

Malaysia

SCHEDULE 4 TO OWNED AIRCRAFT PARTICIPATION AGREEMENT PAGE 1

463
EXHIBIT A

[Form of Opinion of Owner's Special Counsel]

_________________

To the Persons Listed on Schedule I
Attached Hereto

Re: Mortgage of Boeing Model _________Aircraft with
Manufacturer's Serial Number ________ and U.S. Registration
Number N

Gentlemen:

We have been requested by Continental Airlines, Inc., a
Delaware corporation (the "Company"), to act as special counsel with respect
to, and to render this opinion letter in connection with, the transactions
contemplated by the Participation Agreement ________, dated as of __________
________________(the "Participation Agreement"), among the Company, as Owner,
and Wilmington Trust Company, a Delaware banking corporation ("WTC"), in its
capacity as Mortagagee (the "Mortgagee"), as Subordination Agent under the
Intercreditor Agreement (as defined in the Participation Agreement) and as Pass
Through Trustee under the Applicable Pass Through Trust Agreements (as defined
in the Participation Agreement). Capitalized terms used herein and not
otherwise defined herein have the respective meanings given those terms in the
Participation Agreement.

In connection with this opinion letter we have examined, among
other things, originals or copies certified or otherwise identified to our
satisfaction of the following documents:

(i) Participation Agreement;
(ii) Trust Indenture;
(iii) Trust Indenture Supplement No. 1;
(iv) Airframe Manufacturer Consent and Agreement;
(v) Engine Manufacturer Consent and Agreement;

464
2

(vi) Forms of the Equipment Notes; and
(vii) Bills of Sale.

A. The opinions set forth below are limited to the laws
of the State of New York, the federal laws of the United States of America and
the General Corporation Law of the State of Delaware, except that we express no
opinion with respect to (i) the laws, regulations or ordinances of any county,
town or municipality or governmental subdivision or agency thereof, (ii) state
securities or blue sky laws or federal securities laws, including the
Securities Act and the Investment Company Act of 1940, (iii) any federal or
state tax, antitrust or fraudulent transfer or conveyance laws, (iv) the
Employee Retirement Income Security Act of 1974, as amended, or (v) the Act
(except as expressly provided in paragraph 5 below), or any other laws, rules
or regulations governing, regulating or relating to the acquisition, ownership,
registration, use or sale of an aircraft, airframe or aircraft engine or to the
particular nature of the equipment to be acquired by the Company. In addition,
our opinions are based upon a review of those laws, statutes, rules and
regulations which, in our experience, are normally applicable to transactions of
the type contemplated by the Participation Agreement.

B. The opinions set forth in paragraphs 3 and 6 below
are subject to (i) limitations on enforceability arising from applicable
bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent
conveyance, fraudulent transfer, preferential transfer and similar laws
relating to or affecting the rights and remedies of creditors generally and
the effect of general principles of equity, including, without limitation,
laches and estoppel as equitable defenses and concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered or applied in a proceeding in equity or at law) and
considerations of impracticability or impossibility of performance, and defenses
based upon unconscionability of otherwise enforceable obligations in the context
of the factual circumstances under which enforcement thereof is sought and (ii)
the qualification that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought. In
addition, certain remedial and procedural provisions of the Company Documents
(as defined in paragraph 2 below) are or may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of those
agreements and does not, in our opinion, make the remedies provided in those
agreements, or otherwise available under applicable law, inadequate for the
practical realization of the substantive benefits purported to be provided
thereby, except for the economic consequences resulting from any delay imposed
by, or
465
3

any procedure required by, applicable laws, rules, regulations and by
constitutional requirements. We express no opinion as to (i) any provision
contained in any Operative Agreement (a) providing for indemnification or
exculpation of any Person for such Person's gross negligence, willful
misconduct, recklessness or unlawful conduct or in respect of liabilities under
the Securities Act, (b) providing for late payment charges or an increase in
interest rate upon delinquency in payment or the occurrence of a default or
other specified event but only to the extent such provision is deemed to
constitute a penalty or liquidated damages provision, (c) as such provision
relates to the subject matter jurisdiction of federal courts or the waiver of
inconvenient forum with respect to proceedings in federal courts, (d) that
purports to establish (or may be construed to establish) evidentiary standards
or (e) providing for the waiver of any statutory right or any broadly or
vaguely stated rights or unknown future rights, or any waiver which is against
public policy considerations or (ii) Section 12.8(c) of the Participation
Agreement or any comparable provision of any other Operative Agreement. Under
certain circumstances the requirement that the provisions of an Operative
Agreement may be modified or waived only in writing or only in a specific
instance and provisions to the effect that failure or delay in exercising any
right, remedy, power and/or privilege will not impair or waive such right,
remedy, power and/or privilege may be unenforceable to the extent that an oral
agreement has been effected or a course of dealing has occurred modifying such
provisions. A court may modify or limit contractual agreements regarding
attorneys' fees.

C. To the extent that our opinions expressed herein
involve conclusions as to the matters set forth in the opinions dated the date
hereof of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger or ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ being delivered
to you on the date hereof, we have assumed, without independent investigation,
the correctness of the matters set forth in such opinions.

D. We have assumed the due authorization, execution and
delivery of the Operative Agreements by each of the parties thereto, that each
of such parties (other than the Company) has the power and authority to
execute, deliver and perform each such Operative Agreement and has obtained or
made all necessary consents, approvals, filings and registrations in connection
therewith (except any required under New York law by the Company), that such
execution, delivery and performance does not violate its charter, by-laws or
similar instrument, that value has been given by each Applicable Pass Through
Trustee to the Company under the Trust Indenture, that the Company has rights
in the Collateral and that WTC is duly organized, validly existing and in good
standing in its jurisdiction of organization and qualified to transact
business in each other jurisdiction where such qualification is required.

E. We have assumed the due authentication of the
Equipment Notes by the Mortgagee and the delivery thereof against payment
therefor, all in accordance with the Participation Agreement and the Trust
Indenture, and that the Equipment Notes conform to the forms thereof examined
by us.

F. We have assumed that all signatures on documents
examined by us are genuine, that all persons signing such documents have legal
capacity, that all documents

466
4

submitted to us as originals are authentic and that all documents submitted to
us as copies or specimens conform with the originals, which facts we have not
independently verified.

G. We express no opinion as to any provision in any
Operative Agreement that is contrary to Section 9-311, or Part V of Article
9, of the UCC.

H. We have not made any examination of, and express no
opinion with respect to (and to the extent relevant have assumed the accuracy
and sufficiency of), (i) descriptions of, the legal or beneficial ownership of,
or the title or condition of title to, the Collateral or any other property
covered by any of the Operative Agreements, (ii) except as expressly set forth
in paragraphs 5 and 7 below, the existence, creation, validity or attachment
of any Lien thereon, (iii) except as expressly set forth in paragraph 5 below,
the perfection of any Lien thereon and (iv) the priority or enforcement of any
Lien thereon.

I. In giving an opinion regarding the valid existence
and good standing of the Company, we have relied solely upon certificates of
public officials.

Based on and subject to the foregoing, we are of the opinion
that:

1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.

2. The Company has all necessary corporate power to
execute, deliver and perform its obligations under the Participation Agreement,
the Trust Indenture, the Trust Indenture Supplement No. 1 and the Equipment
Notes (collectively, the "Company Documents"). Neither the execution nor
delivery of the Company Documents by the Company nor the consummation of the
transactions contemplated thereby will result in any violation of (a) its
Restated Certificate of Incorporation or By-laws or (b) any law, governmental
rule or regulation known to us to be applicable to, or binding on, the
Company, or requires the approval of the stockholders of the Company.

3. Each Company Document constitutes the valid and
binding obligation of the Company and is enforceable against the Company in
accordance with its terms.

4. Except for the matters referred to in clauses (i)
through (iii) of paragraph 5 below, no approval, authorization or other action
by or filing with any governmental authority is required for the execution and
delivery by the Company of the Company Documents or the consummation of the
transactions contemplated thereby to occur at the Closing.

467
5

5. Except for (i) the registration of the Aircraft with
the FAA pursuant to the Act, (ii) the filing and recordation in accordance with
the Act of the FAA Filed Documents, and assuming that at the time of such
filing no other unrecorded document relating to the Aircraft has been filed
pursuant to the Act, (iii) the filing of Financing Statements referred to in
Section 4.1.11 of the Participation Agreement, and the filing of periodic
continuation statements with respect thereto, (a) no further filing or
recording of any document is necessary (x) to establish the Company's title to
the Airframe and Engines, and (y) to create a valid security interest in the
Company's interest as owner of the Airframe and Engines or in the Purchase
Agreement (to the extent a security interest therein is created by the Trust
Indenture) in favor of the Mortgagee pursuant to the Trust Indenture and (b) no
further filing or recording of any document in the State of New York or under
the Act is required to perfect a security interest in the Company's interest as
owner of the Airframe and Engines or in the Purchase Agreement (to the extent a
security interest therein is created by the Trust Indenture) in favor of the
Mortgagee pursuant to the Trust Indenture.

6. So long as the Company continues to be a "citizen of
the United States", as defined in section 40102 of Title 49 of the United States
Code, holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of the United States Code for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo, the Mortgagee will be entitled to the benefits of Section 1110 of Title
11 of the United States Code with respect to the Airframe and Engines delivered
on the date hereof in connection with any case commenced by or against the
Company under Chapter 11 of Title 11 of the United States Code.

7. Upon issuance, execution, authentication and delivery
of the Equipment Notes at the Closing, the Trust Indenture creates the security
interest in favor of the Mortgagee, as trustee for the benefit of the holders of
the Equipment Notes, in the Collateral it purports to create to the extent that
the UCC applies to a security interest in such property.

This opinion is being delivered pursuant to Section
4.1.2(x)(A) of the Participation Agreement. This opinion may be relied upon by
you (and any permitted Transferee under Section 9.1 of the Participation
Agreement) in connection with the matters set forth herein and, without our
prior written consent, may not be relied upon for any other purpose and may not
be furnished to any other Person for any purpose.

Very truly yours,

468

SCHEDULE I

Wilmington Trust Company, individually, as Mortgagee, as Subordination Agent
and as each Applicable Pass Through Trustee

ABN AMRO Bank N.V., Chicago Branch as Liquidity Provider

ING Bank N.V., as Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

469
EXHIBIT B

[Form of Opinion of Owner's Legal Department]

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

To the Persons
Listed on
Schedule I Hereto

Re: Mortgage of Boeing Model ____________ Aircraft with Manufacturer's
Serial Number ____________ and U.S. Registration Number N

Ladies and Gentlemen:

This opinion letter is being delivered by Continental Airlines,
Inc., a Delaware corporation ("Continental"), through its Legal Department in
connection with the transactions contemplated by the Participation Agreement
______ dated as of ____________, among Wilmington Trust Company, a Delaware
banking corporation, as Mortgagee, Subordination Agent under the Intercreditor
Agreement (as defined in the Participation Agreement) and as Pass Through
Trustee under the Applicable Pass Through Trust Agreements (as defined in the
Participation Agreement) and Continental, as Owner (the "Participation
Agreement"). All capitalized terms used herein and not otherwise defined herein
shall have the respective meanings given those terms in the Participation
Agreement. This opinion letter is being furnished to you pursuant to Section
4.1.2(x)(B) of the Participation Agreement.

470
2

Based on the foregoing, and subject to the assumptions and
limitations contained herein, Continental's Legal Department is of the opinion
that:

(a) Continental is an "air carrier" within the meaning of
Section 40102 of the Act, operating under a certificate issued pursuant to
Chapter 447 of the Act, is a "citizen of the United States" as such term is
defined in Section 40102 of such Act and holds all authority, necessary
licenses and certificates under such Act and the rules and regulations
promulgated thereunder necessary for the conduct of its business and to perform
its obligations under the Participation Agreement, the Trust Indenture, the
Trust Indenture Supplement No. 1 and the Equipment Notes (collectively, the
"Agreements").

This opinion letter is furnished to you for the purpose indicated
above, and may not be relied upon by any other Person (except any permitted
Transferee under Section 9.1 of the Participation Agreement) or for any other
purpose without our written consent.

Very truly yours,

Continental Airlines, Inc.
Legal Department
472

SCHEDULE I

Wilmington Trust Company, individually and as Mortgagee, as Subordination Agent
and as each Applicable Pass Through Trustee

ABN AMRO Bank N.V., Chicago Branch, as a Liquidity Provider

ING Bank N.V., as a Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

473
EXHIBIT E

[FAA Counsel's opinion to be substantially the same as in the Leased Aircraft
Participation Agreement, with modifications to account for elimination of lease
and ownership of the Aircraft by Continental]

474
EXHIBIT C-2 to
Note Purchase Agreement

FORM OF OWNED AIRCRAFT INDENTURE
475
--------------------------------------------------------------------------------

TRUST INDENTURE AND MORTGAGE _______

Dated as of _______ __, 199_

Between

CONTINENTAL AIRLINES, INC.,

Owner

and

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

Mortgagee

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

EQUIPMENT NOTES COVERING
ONE BOEING _______ AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ N_____
AND MANUFACTURER'S SERIAL NO. _____

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

OWNED AIRCRAFT INDENTURE
476
TABLE OF CONTENTS

PAGE

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

ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE II THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Issuance and Terms of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.03. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.06. Termination of Interest in Collateral . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.07. Registration Transfer and Exchange of Equipment Notes . . . . . . . . . . . . . . 14
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes . . . . . . . . . . . . . . . 15
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . . . . . . . . . . . . . . . . 15
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.13. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.01. Basic Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.02. Event of Loss; Replacement; Optional Redemption . . . . . . . . . . . . . . . . . 18
SECTION 3.03. Payments After Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE IV COVENANTS OF THE OWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.01. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.02. Possession, Operation and Use, Maintenance, Registration and Markings . . . . . . . 22
SECTION 4.03. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.04. Replacement and Pooling of Parts, Alterations, Modifications
and Additions; Substitution of Engines . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.05. Loss, Destruction or Requisition . . . . . . . . . . . . . . . . . . . . . . . . . 31

OWNED AIRCRAFT INDENTURE i
477
TABLE OF CONTENTS
(CONTINUED)

PAGE

SECTION 4.06. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.07. Merger of Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE V EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.01. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.02. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.03. Return of Aircraft, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.04. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.05. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.06. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.07. Appointment of Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.08. Mortgagee Authorized to Execute Bills of Sale, Etc. . . . . . . . . . . . . . . . 41
SECTION 5.09. Rights of Note Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . 42

ARTICLE VI DUTIES OF THE MORTGAGEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.01. Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.02. Action Upon Instructions; Certain Rights and Limitations . . . . . . . . . . . . . 42
SECTION 6.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.04. No Duties Except as Specified in Trust Indenture or Instructions . . . . . . . . . 43
SECTION 6.05. No Action Except Under Trust Indenture or Instructions . . . . . . . . . . . . . . 44
SECTION 6.06. Investment of Amounts Held by Mortgagee . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE VII THE MORTGAGEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.02. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.03. No Representations or Warranties as to Aircraft or Documents . . . . . . . . . . . 45
SECTION 7.04. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.05. Reliance; Agreements; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.06. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.07. Instructions from Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE VIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.01. Scope of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

OWNED AIRCRAFT INDENTURE ii
478
TABLE OF CONTENTS
(CONTINUED)

PAGE

ARTICLE IX SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.01. Resignation of Mortgagee; Appointment of Successor . . . . . . . . . . . . . . . . 47
SECTION 9.02. Appointment of Additional and Separate Trustees . . . . . . . . . . . . . . . . . 48

ARTICLE X SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER DOCUMENTS . . . . . . . . . . . 50
SECTION 10.01. Instructions of Majority; Limitations . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.02. Mortgagee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.03. Documents Mailed to Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.04. No Request Necessary for Trust Indenture Supplement . . . . . . . . . . . . . . . 51

ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.01. Termination of Trust Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 11.02. No Legal Title to Collateral in Note Holders . . . . . . . . . . . . . . . . . . . 52
SECTION 11.03. Sale of Aircraft by Mortgagee Is Binding . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.04. Trust Indenture for Benefit of Owner, Mortgagee, Note Holders
and the other Indenture Indemnitees . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.05. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.07. No Oral Modification or Continuing Waivers . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.09. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.10. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.11 Governing Law; Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.12. Voting By Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.13. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

ANNEX A Definitions

ANNEX B Insurance

EXHIBIT A Form of Trust Indenture and Mortgage Supplement

SCHEDULE I Equipment Notes Amortization and Interest Rates

OWNED AIRCRAFT INDENTURE iii
479
TRUST INDENTURE AND MORTGAGE ___

TRUST INDENTURE AND MORTGAGE ___, dated as of ______________
__, 199_ ("Trust Indenture"), between CONTINENTAL AIRLINES, INC., a Delaware
corporation ("Owner"), and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity, except as expressly stated herein,
but solely as Mortgagee hereunder (together with its successors hereunder, the
"Mortgagee").

W I T N E S S E T H

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

WHEREAS, the parties hereto desire by this Trust Indenture,
among other things, (i) to provide for the issuance by the Owner of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner to the Mortgagee, as part of the Collateral hereunder, among other
things, of all of the Owner's right, title and interest in and to the Aircraft
and, except as hereinafter expressly provided, all payments and other amounts
received hereunder in accordance with the terms hereof, as security for, among
other things, the Owner's obligations to the Note Holders and the Indenture
Indemnitees;

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

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

GRANTING CLAUSE

OWNED AIRCRAFT INDENTURE
480
to and under the following described property, rights and privileges, whether
now or hereafter acquired (which, collectively, together with all property
hereafter specifically subject to the Lien of this Trust Indenture by the terms
hereof or any supplement hereto, are included within, and are referred to as,
the "Collateral"), to wit:

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

(2) The Purchase Agreement and the Bills of Sale to the
extent the same relate to continuing rights of the Owner in respect of any
warranty, indemnity or agreement, express or implied, as to title, materials,
workmanship, design or patent infringement or related matters with respect to
the Airframe or the Engines (reserving to the Owner, however, all of the
Owner's other rights and interest in and to the Purchase Agreement) together
with all rights, powers, privileges, options and other benefits of the Owner
thereunder (subject to such reservation) with respect to the Airframe or the
Engines, including, without limitation, the right to make all waivers and
agreements, to give and receive all notices and other instruments or
communications, to take such action upon the occurrence of a default
thereunder, including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted thereby or by law,
and to do any and all other things which the Owner is or may be entitled to do
thereunder (subject to such reservation), subject, with respect to the Purchase
Agreement, to the terms and conditions of the Consent and Agreement and the
Engine Consent and Agreement;

(3) All proceeds with respect to the requisition of title
to or use of the Aircraft or any Engine by any Government Entity or from the
sale or other disposition of the Aircraft, the Airframe, any Engine or other
property described in any of these Granting Clauses by the Mortgagee pursuant
to the terms of this Trust Indenture, and all insurance proceeds with respect
to the Aircraft, the Airframe, any Engine or any part thereof, but excluding
any insurance maintained by the Owner and not required under Section 4.06;

(4) All rents, revenues and other proceeds collected by
the Mortgagee pursuant to Section 5.03(b) and all monies and securities from
time to time deposited or required

OWNED AIRCRAFT INDENTURE 2
481
to be deposited with the Mortgagee by or for the account of the Owner pursuant
to any terms of this Trust Indenture held or required to be held by the
Mortgagee hereunder; and

(5) All proceeds of the foregoing.

PROVIDED, HOWEVER, that notwithstanding any of the foregoing
provisions, so long as no Event of Default shall have occurred and be
continuing, (a) the Mortgagee shall not take or cause to be taken any action
contrary to the Owner's right hereunder to quiet enjoyment of the Airframe and
Engines, and to possess, use, retain and control the Airframe and Engines and
all revenues, income and profits derived therefrom, and (b) the Owner shall
have the right, to the exclusion of the Mortgagee, with respect to the Purchase
Agreement, to exercise in the Owner's name all rights and powers of the buyer
under the Purchase Agreement (other than to amend, modify or waive any of the
warranties or indemnities contained therein, except in the exercise of the
Owner's reasonable business judgment) and to retain any recovery or benefit
resulting from the enforcement of any warranty or indemnity under the Purchase
Agreement; and provided further that, notwithstanding the occurrence or
continuation of an Event of Default, the Mortgagee shall not enter into any
amendment of the Purchase Agreement which would increase the obligations of the
Owner thereunder.

TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.13 and Article III hereof, without
any preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and in all cases and as to all property specified in paragraphs (1)
through (5) inclusive above, subject to the terms and provisions set forth in
this Trust Indenture.

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

The Owner does hereby constitute the Mortgagee the true and
lawful attorney of the Owner, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Owner or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and

OWNED AIRCRAFT INDENTURE 3
482
claims for monies (in each case including insurance and requisition proceeds)
due and to become due under or arising out of the Indenture Agreements, and all
other property which now or hereafter constitutes part of the Collateral, 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; provided
that the Mortgagee shall not exercise any such rights except upon the
occurrence and during the continuance of an Event of Default hereunder.

The Owner agrees that at any time and from time to time, upon
the written request of the Mortgagee, the Owner will promptly and duly execute
and deliver or cause to be duly executed and delivered any and all such further
instruments and documents (including without limitation UCC continuation
statements) as the Mortgagee may reasonably deem necessary to perfect, preserve
or protect the mortgage, security interests and assignments created or intended
to be created hereby or to obtain for the Mortgagee the full benefits of the
assignment hereunder and of the rights and powers herein granted.

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

ARTICLE I

DEFINITIONS

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

ARTICLE II

THE EQUIPMENT NOTES

SECTION 2.01. FORM OF EQUIPMENT NOTES

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

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

OWNED AIRCRAFT INDENTURE 4
483
CONTINENTAL AIRLINES, INC.

SERIES [_____] EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE BOEING
MODEL _______ AIRCRAFT BEARING UNITED
STATES REGISTRATION NUMBER N_____.

No. ____ Date: [__________, ____]

_______________________

INTEREST RATE MATURITY DATE

[___________] [____________]

CONTINENTAL AIRLINES, INC., a Delaware corporation ("Owner"),
hereby promises to pay to __________________, or the registered assignee
thereof, the principal sum of $____________ (the "Original Amount"), together
with interest on the amount of the Original Amount remaining unpaid from time
to time (calculated on the basis of a year of 360 days comprised of twelve
30-day months) from the date hereof until paid in full at a rate per annum
equal to the Debt Rate. The Original Amount of this Equipment Note shall be
payable in installments on the dates set forth in Schedule I hereto equal to
the corresponding percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be due and
payable in semiannual installments commencing on ______, __ 199_, and
thereafter on April 1, and October 1 of each year, to and including
_______________. Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in full the unpaid
Original Amount and all accrued and unpaid interest on, and any other amounts
due under, this Equipment Note. Notwithstanding anything to the contrary
contained herein, if any date on which a payment under this Equipment Note
becomes due and payable is not a Business Day, then such payment shall not be
made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.

For purposes hereof, the term "Trust Indenture" means the
Trust Indenture and Mortgage ________, dated as of _______ __, 199_, between
the Owner and Wilmington Trust Company (the "Mortgagee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.

This Equipment Note shall bear interest, payable on demand, at
the Payment Due Rate (calculated on the basis of a year of 360 days comprised
of twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not paid
when due (whether at stated maturity, by acceleration or otherwise).

OWNED AIRCRAFT INDENTURE 5
484
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the circumstances, specified by
the Registration Rights Agreement.

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

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

The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Trust Indenture, each payment of the
Original Amount, Make-Whole Amount, if any, and interest received by it
hereunder shall be applied, first, to the payment of accrued interest on this
Equipment Note (as well as any interest on any overdue Original Amount, any
overdue Make-Whole Amount, if any, or, to the extent permitted by Law, any
overdue interest and other amounts hereunder) to the date of such payment,
second, to the payment of the Original Amount of this Equipment Note then due,
third, to the payment of Make-Whole Amount, if any, and any other amount due
hereunder or under the Trust Indenture, and fourth, the balance, if any,
remaining thereafter, to the payment of installments of the Original Amount of
this Equipment Note remaining unpaid in the inverse order of their maturity.

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

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

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

OWNED AIRCRAFT INDENTURE 6
485
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. In
addition, this Equipment Note may be accelerated as provided in Section 5.02 of
the Trust Indenture.

[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of [Series A
Equipment Notes](1) [Series A and Series B Equipment Notes](2) and this
Equipment Note is issued subject to such provisions. The Note Holder of this
Equipment Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Mortgagee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Trust Indenture and (c) appoints the Mortgagee his
attorney-in-fact for such purpose.](3)

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

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

* * *

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

CONTINENTAL AIRLINES, INC.

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

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

(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted for each Equipment Note other than any Series A
Equipment Note.

OWNED AIRCRAFT INDENTURE 7
486
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION

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

WILMINGTON TRUST COMPANY, as
Mortgagee

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

SCHEDULE I

EQUIPMENT NOTE AMORTIZATION

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

[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]

* * *

OWNED AIRCRAFT INDENTURE 8
487
SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES

The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in three separate series consisting of Series A,
Series B and Series C and in the maturities and principal amounts and shall
bear interest as specified in Schedule I hereto. On the date thereof, each
Equipment Note shall be issued to the Subordination Agent on behalf of the Pass
Through Trustee under the Applicable Pass Through Trust Agreement. The
Equipment Notes shall be issued in registered form only. The Equipment Notes
shall be issued in denominations of $1,000 and integral multiples thereof,
except that one Equipment Note of each Series may be in an amount that is not
an integral multiple of $1,000.

Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Original Amount thereof from time to time outstanding,
payable in arrears on _____ __, 199_, and on each _____ April 1 and October 1
thereafter until maturity. The Original Amount of each Equipment Note shall be
payable on the dates and in the installments equal to the corresponding
percentage of the Original Amount as set forth in Schedule I hereto which shall
be attached as Schedule I to the Equipment Notes. Notwithstanding the
foregoing, the final payment made under each Equipment Note shall be in an
amount sufficient to discharge in full the unpaid Original Amount and all
accrued and unpaid interest on, and any other amounts due under, such Equipment
Note. Each Equipment Note shall bear interest at the Payment Due Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on any part of the Original Amount, Make-Whole Amount, if any, and, to
the extent permitted by applicable Law, interest and any other amounts payable
thereunder not paid when due for any period during which the same shall be
overdue, in each case for the period the same is overdue. Amounts shall be
overdue if not paid when due (whether at stated maturity, by acceleration or
otherwise). Notwithstanding anything to the contrary contained herein, if any
date on which a payment under any Equipment Note becomes due and payable is not
a Business Day then such payment shall not be made on such scheduled date but
shall be made on the next succeeding Business Day and if such payment is made
on such next succeeding Business Day, no interest shall accrue on the amount of
such payment during such extension.

The Owner agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) to the extent not payable (whether or
not in fact paid) under Section 6(a) of the Note Purchase Agreement, an amount
equal to the fees payable to the relevant Liquidity Provider under Section 2.03
of each Liquidity Facility and the related Fee Letter (as defined in the
Intercreditor Agreement) multiplied by a fraction the numerator of which shall
be the then outstanding aggregate principal amount of the Series A Equipment
Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal amount
of all "Series A Equipment Notes," "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement); (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause

OWNED AIRCRAFT INDENTURE 9
488
(i); (iii) (x) the amount equal to interest on any Non-Extension Advance (other
than any Applied Non-Extension Advance) payable under Section 3.07(a)(i) of
each Liquidity Facility minus Investment Earnings from such Non-Extension
Advance multiplied by (y) the fraction specified in the foregoing clause (i);
(iv) if any payment default shall have occurred and be continuing with respect
to interest on any Series A Equipment Notes, Series B Equipment Notes or Series
C Equipment Notes, (x) the excess, if any, of (1) an amount equal to interest
on any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance payable under Section 3.07(a)(i) of each Liquidity Facility over (2)
the sum of Investment Earnings from any Final Advance plus any amount of
interest at the Payment Due Rate actually payable (whether or not in fact paid)
by Owner on the overdue scheduled interest on the Equipment Notes in respect of
which such Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance was made multiplied by (y) a fraction the numerator of which shall be
the then aggregate overdue amounts of interest on the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes (other than interest
becoming due and payable solely as a result of acceleration of any such
Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A Equipment Notes," "Series B
Equipment Notes" and "Series C Equipment Notes" (each as defined in the Note
Purchase Agreement) (other than interest becoming due and payable solely as a
result of acceleration of any such "Equipment Notes"); and (v) Owner's pro rata
share of any other amounts owed to the Liquidity Providers by the Subordination
Agent as borrower under each Liquidity Facility other than amounts due as
repayment of advances thereunder or as interest on such advances, except to the
extent payable pursuant to clause (ii), (iii) or (iv) above, (c) Owner's pro
rata share of all compensation and reimbursement of expenses, disbursements and
advances payable by Owner under the Pass Through Trust Agreements, (d) Owner's
pro rata share of all compensation and reimbursement of expenses and
disbursements payable to the Subordination Agent under the Intercreditor
Agreement except with respect to any income or franchise taxes incurred by the
Subordination Agent in connection with the transactions contemplated by the
Intercreditor Agreement and (e) in the event Owner requests any amendment to
any Operative Agreement or Pass Through Agreement, Owner's pro rata share of
all reasonable fees and expenses (including, without limitation, fees and
disbursements of counsel) of the Escrow Agents and the Paying Agents in
connection therewith payable by the Pass Through Trustees under the Escrow
Agreements. As used herein, "Owner's pro rata share" means as of any time a
fraction, the numerator of which is the principal balance then outstanding of
Equipment Notes and the denominator of which is the aggregate principal balance
then outstanding of all "Equipment Notes" (as such term is defined in each of
the Operative Indentures). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral Account",
"Downgrade Advance", "Final Advance", "Investment Earnings", "Non-Extension
Advance" and "Unpaid Advance" shall have the meanings specified in each
Liquidity Facility.

The Equipment Notes shall be executed on behalf of the Owner
by one of its authorized officers. Equipment Notes bearing the signatures of
individuals who were at any time the proper officers of the Owner shall bind
the Owner, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Equipment
Notes or did not hold such offices at the respective dates of such Equipment
Notes.

OWNED AIRCRAFT INDENTURE 10
489
The Owner may from time to time execute and deliver Equipment Notes with
respect to the Aircraft to the Mortgagee for authentication upon original issue
and such Equipment Notes shall thereupon be authenticated and delivered by the
Mortgagee upon the written request of the Owner signed by an authorized officer
of the Owner; provided, however, that each such request shall specify the
aggregate Original Amount of all Equipment Notes to be authenticated hereunder
on original issue with respect to the Aircraft. No Equipment Note shall be
secured by or entitled to any benefit under this Trust Indenture or be valid or
obligatory for any purposes, unless there appears on such Equipment Note a
certificate of authentication in the form provided for herein executed by the
Mortgagee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and delivered
hereunder.

The aggregate Original Amount of the Equipment Notes issued
hereunder shall not exceed _______.

SECTION 2.03. [INTENTIONALLY OMITTED]

SECTION 2.04. METHOD OF PAYMENT

(a) The Original Amount of, interest on,
Make-Whole Amount, if any, and other amounts due under each Equipment Note or
hereunder will be payable in Dollars by wire transfer of immediately available
funds not later than 12:30 PM, New York time, on the due date of payment to the
Mortgagee at the Corporate Trust Office for distribution among the Note Holders
in the manner provided herein. The Owner shall not have any responsibility for
the distribution of such payment to any Note Holder. Notwithstanding the
foregoing or any provision in any Equipment Note to the contrary, the Mortgagee
will use reasonable efforts to pay or cause to be paid, if so directed in
writing by any Note Holder (with a copy to the Owner), all amounts paid by the
Owner hereunder and under such holder's Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed pursuant
to Article III of this Trust Indenture) by transferring, or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 2:00 p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United States
the amount to be distributed to such holder, for credit to the account of such
holder maintained at such bank. If the Mortgagee shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, the Mortgagee, in its
individual capacity and not as trustee, agrees to compensate such holders for
loss of use of funds at Debt Rate until such payment is made and the Mortgagee
shall be entitled to any interest earned on such funds until such payment is
made. Any payment made hereunder shall be made without any presentment or
surrender of any Equipment Note, except that, in the case of the final payment
in respect of any Equipment Note, such Equipment Note shall be surrendered to
the Mortgagee for cancellation promptly after such payment. Notwithstanding
any other provision of this Trust Indenture to the contrary, the Mortgagee
shall not be required to make, or cause to be made, wire transfers as aforesaid
prior to the first Business Day on which it is practicable for the Mortgagee to
do so in view of the time of day when the funds to be so transferred were
received by it if such funds were received after

OWNED AIRCRAFT INDENTURE 11
490
12:30 PM, New York time, at the place of payment. Prior to the due presentment
for registration of transfer of any Equipment Note, the Owner and the Mortgagee
shall deem and treat the Person in whose name any Equipment Note is registered
on the Equipment Note Register as the absolute owner and holder of such
Equipment Note for the purpose of receiving payment of all amounts payable with
respect to such Equipment Note and for all other purposes, and none of the
Owner or the Mortgagee shall be affected by any notice to the contrary. So
long as any signatory to the Participation Agreement or nominee thereof shall
be a registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Mortgagee
consistent with this Section 2.04.

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

If a Note Holder which is a Non-U.S. Person has furnished to
the Mortgagee a properly completed, accurate and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms as
may be required by the United States Treasury Department) during the calendar
year in which the payment hereunder or under the Equipment Note(s) held by such
holder is made (but prior to the making of such payment), or in either of the
two preceding calendar years, and has not notified the Mortgagee of the
withdrawal or inaccuracy of such form prior to the date of such payment (and
the Mortgagee has no reason to believe that any information set forth in such
form is inaccurate), the Mortgagee shall withhold only the amount, if any,
required by Law (after taking into account any applicable exemptions properly
claimed by the Note Holder) to be withheld from payments hereunder or under the
Equipment Notes held by such holder in respect of United States federal income
tax. If a Note Holder (x) which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form 4224 in duplicate (or such successor certificate, form or
forms as may be required by the United States Treasury Department as necessary
in order to properly avoid withholding of United States federal income tax),
for each calendar year in which a payment is made (but prior to the making of
any payment for such year), and has not notified the Mortgagee of the
withdrawal or inaccuracy of such certificate or form prior to the date of such
payment (and the Mortgagee has no reason to believe that any information set
forth in such form is inaccurate) or (y) which is a U.S. Person has

OWNED AIRCRAFT INDENTURE 12
491
furnished to the Mortgagee a properly completed, accurate and currently
effective U.S. Internal Revenue Service Form W- 9, if applicable, prior to a
payment hereunder or under the Equipment Notes held by such holder, no amount
shall be withheld from payments in respect of United States federal income tax.
If any Note Holder has notified the Mortgagee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not filed a
form claiming an exemption from United States withholding tax or if the Code or
the regulations thereunder or the administrative interpretation thereof is at
any time after the date hereof amended to require such withholding of United
States federal income taxes from payments under the Equipment Notes held by
such holder, the Mortgagee agrees to withhold from each payment due to the
relevant Note Holder withholding taxes at the appropriate rate under Law and
will, on a timely basis as more fully provided above, deposit such amounts with
an authorized depository and make such returns, statements, receipts and other
documentary evidence in connection therewith as required by Law.

Owner shall not have any liability for the failure of the
Mortgagee to withhold taxes in the manner provided for herein or for any false,
inaccurate or untrue evidence provided by any Note Holder hereunder.

SECTION 2.05. APPLICATION OF PAYMENTS

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

First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Original Amount, any
overdue Make-Whole Amount, if any, and to the extent permitted by Law,
any overdue interest and any other overdue amounts thereunder) to the
date of such payment;

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

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

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

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

SECTION 2.06. TERMINATION OF INTEREST IN COLLATERAL

No Note Holder nor any other Indenture Indemnitee shall, as
such, have any further interest in, or other right with respect to, the
Collateral when and if the Original Amount

OWNED AIRCRAFT INDENTURE 13
492
of, Make-Whole Amount, if any, and interest on and other amounts due under all
Equipment Notes held by such Note Holder and all other sums then due and
payable to such Note Holder, such Indenture Indemnitee or the Mortgagee
hereunder (including, without limitation, under the third paragraph of Section
2.02 hereof) and under the other Operative Agreements by the Owner
(collectively, the "Secured Obligations") shall have been paid in full.

SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT
NOTES

The Mortgagee shall keep a register (the "Equipment Note
Register") in which the Mortgagee shall provide for the registration of
Equipment Notes and the registration of transfers of Equipment Notes. No such
transfer shall be given effect unless and until registration hereunder shall
have occurred. The Equipment Note Register shall be kept at the Corporate
Trust Office of the Mortgagee. The Mortgagee is hereby appointed "Equipment
Note Registrar" for the purpose of registering Equipment Notes and transfers of
Equipment Notes as herein provided. A holder of any Equipment Note intending
to exchange such Equipment Note shall surrender such Equipment Note to the
Mortgagee at the Corporate Trust Office, together with a written request from
the registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address of
the new holder or holders. Upon surrender for registration of transfer of any
Equipment Note, the Owner shall execute, and the Mortgagee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Equipment Notes of a like aggregate Original Amount and of the same
series. At the option of the Note Holder, Equipment Notes may be exchanged for
other Equipment Notes of any authorized denominations of a like aggregate
Original Amount, upon surrender of the Equipment Notes to be exchanged to the
Mortgagee at the Corporate Trust Office. Whenever any Equipment Notes are so
surrendered for exchange, the Owner shall execute, and the Mortgagee shall
authenticate and deliver, the Equipment Notes which the Note Holder making the
exchange is entitled to receive. All Equipment Notes issued upon any
registration of transfer or exchange of Equipment Notes (whether under this
Section 2.07 or under Section 2.08 hereof or otherwise under this Trust
Indenture) shall be the valid obligations of the Owner evidencing the same
respective obligations, and entitled to the same security and benefits under
this Trust Indenture, as the Equipment Notes surrendered upon such registration
of transfer or exchange. Every Equipment Note presented or surrendered for
registration of transfer, shall (if so required by the Mortgagee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Mortgagee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Mortgagee shall require evidence
satisfactory to it as to the compliance of any such transfer with the
Securities Act, and the securities Laws of any applicable state. The Mortgagee
shall make a notation on each new Equipment Note of the amount of all payments
of Original Amount previously made on the old Equipment Note or Equipment Notes
with respect to which such new Equipment Note is issued and the date to which
interest on such old Equipment Note or Equipment Notes has been paid. Interest
shall be deemed to have been paid on such new Equipment Note to the date on
which interest shall have been paid on such old Equipment Note, and all
payments of the Original Amount marked on such new Equipment Note, as provided
above, shall be deemed to have been made thereon. The Owner shall not be
required to exchange any surrendered Equipment Notes as provided above during
the ten-day period preceding the due

OWNED AIRCRAFT INDENTURE 14
493
date of any payment on such Equipment Note. The Owner shall in all cases deem
the Person in whose name any Equipment Note shall have been issued and
registered as the absolute owner and holder of such Equipment Note for the
purpose of receiving payment of all amounts payable by the Owner with respect
to such Equipment Note and for all purposes until a notice stating otherwise is
received from the Mortgagee and such change is reflected on the Equipment Note
Register. The Mortgagee will promptly notify the Owner of each registration of
a transfer of an Equipment Note. Any such transferee of an Equipment Note, by
its acceptance of an Equipment Note, agrees to the provisions of this Indenture
and the Participation Agreement applicable to Note Holders, including Sections
6.3, 6.4 and 9.1 thereof and shall be deemed to have covenanted to the parties
to the Participation Agreement as to the matters covenanted by the original
Note Holder in the Participation Agreement. Subject to compliance by the Note
Holder and its transferee (if any) of the requirements set forth in this
Section 2.07, Mortgagee and Owner shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within 10 Business Days of the date
an Equipment Note is surrendered for transfer or exchange.

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

If any Equipment Note shall become mutilated, destroyed, lost
or stolen, the Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft.
If the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be
furnished to the Owner. If the Equipment Note being replaced has been
destroyed, lost or stolen, the holder of such Equipment Note shall furnish to
the Owner and the Mortgagee such security or indemnity as may be required by
them to save the Owner and the Mortgagee harmless and evidence satisfactory to
the Owner and the Mortgagee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof. If a "qualified institutional buyer" of the
type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of Rule 144A under
the Securities Act (a "QIB") is the holder of any such destroyed, lost or
stolen Equipment Note, then the written indemnity of such QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory Owner shall be accepted as satisfactory indemnity and security and
no further indemnity or security shall be required as a condition to the
execution and delivery of such new Equipment Note. Subject to compliance by
the Note Holder with the requirements set forth in this Section 2.08, Mortgagee
and Owner shall use all reasonable efforts to issue new Equipment Notes within
10 Business Days of the date of the written request therefor from the Note
Holder.

SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION

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

OWNED AIRCRAFT INDENTURE 15
494
(b) The Mortgagee shall cancel all Equipment
Notes surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.

SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES

On the date on which the Owner is required pursuant
to Section 4.05 hereof to make payment for an Event of Loss with respect to the
Airframe, all of the Equipment Notes shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with all
accrued interest thereon to the date of redemption and all other Secured
Obligations owed or then due and payable to the Note Holders but without
Make-Whole Amount.

SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES

All (but not less than all) of the Equipment Notes may be
redeemed by the Owner upon at least 30 days' revocable prior written notice to
the Mortgagee and the Note Holders, and the Equipment Notes shall be redeemed
in whole at a redemption price equal to 100% of the unpaid Original Amount
thereof, together with accrued interest thereon to the date of redemption and
all other Secured Obligations owed or then due and payable to the Note Holders
plus, if such redemption is made prior to the Premium Termination Date,
Make-Whole Amount, if any.

SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION

(a) No redemption of any Equipment Note may be
made except to the extent and in the manner expressly permitted by this Trust
Indenture. No purchase of any Equipment Note may be made by the Mortgagee.

(b) Notice of redemption with respect to the
Equipment Notes shall be given by the Mortgagee by first-class mail, postage
prepaid, mailed not less than 25 nor more than 60 days prior to the applicable
redemption date, to each Note Holder of such Equipment Notes to be redeemed, at
such Note Holder's address appearing in the Equipment Note Register; provided
that such notice shall be revocable by written notice from the Owner to
Mortgagee given not later than three days prior to the redemption date. All
notices of redemption shall state: (1) the redemption date, (2) the applicable
basis for determining the redemption price, (3) that on the redemption date,
the redemption price will become due and payable upon each such Equipment Note,
and that, if any such Equipment Notes are then outstanding, interest on such
Equipment Notes shall cease to accrue on and after such redemption date, and
(4) the place or places where such Equipment Notes are to be surrendered for
payment of the redemption price.

(c) On or before the redemption date, the Owner
(or any person on behalf of the Owner) shall, to the extent an amount equal to
the redemption price for the Equipment Notes to be redeemed on the redemption
date shall not then be held by the Mortgagee, deposit or cause to be deposited
with the Mortgagee by 12:30 PM New York time on the redemption date in
immediately available funds the redemption price of the Equipment Notes to be
redeemed.

OWNED AIRCRAFT INDENTURE 16
495
(d) Notice of redemption having been given as
aforesaid, the Equipment Notes to be redeemed shall, on the redemption date,
become due and payable at the Corporate Trust Office of the Mortgagee or at any
office or agency maintained for such purposes pursuant to Section 2.07, and
from and after such redemption date (unless there shall be a default in the
payment of the redemption price) any such Equipment Notes then outstanding
shall cease to bear interest. Upon surrender of any such Equipment Note for
redemption in accordance with said notice, such Equipment Note shall be
redeemed at the redemption price. If any Equipment Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the applicable
redemption date at the interest rate in effect for such Equipment Note as of
such redemption date.

SECTION 2.13. SUBORDINATION

(a) The Owner and, by acceptance of its Equipment
Notes of any Series, each Note Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Note Holder of such Series, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 5.01(vi) hereof, except as
expressly provided in Article III hereof.

(b) By the acceptance of its Equipment Notes of
any Series (other than Series A), each Note Holder of such Series agrees that
in the event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect of
such Series which it is not entitled to receive under this Section 2.13 or
Article III hereof, it will hold any amount so received in trust for the Senior
Holder (as defined in Section 2.13(c) hereof) and will forthwith turn over such
payment to the Mortgagee in the form received to be applied as provided in
Article III hereof.

(c) As used in this Section 2.13, the term
"Senior Holder" shall mean, (i) the Note Holders of Series A until the Secured
Obligations in respect of Series A Equipment Notes have been paid in full, (ii)
after the Secured Obligations in respect of Series A Equipment Notes have been
paid in full, the Note Holders of Series B until the Secured Obligations in
respect of Series B Equipment Notes have been paid in full and (iii) after the
Secured Obligations in respect of Series B Equipment Notes have been paid in
full, the Note Holders of Series C until the Secured Obligations in respect of
Series C Equipment Notes have been paid in full.

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS

SECTION 3.01. BASIC DISTRIBUTIONS

Except as otherwise provided in Section 3.03 hereof, each
periodic payment of principal or interest on the Equipment Notes received by
the Mortgagee shall be promptly distributed in the following order of priority:

OWNED AIRCRAFT INDENTURE 17
496
(i) so much of such payment as shall be required to pay in full
the aggregate amount of the payment or payments of Original
Amount and interest (as well as any interest on any overdue
Original Amount and, to the extent permitted by Law, on any
overdue interest) then due under all Series A Equipment Notes
shall be distributed to the Note Holders of Series A ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each
Series A Equipment Note bears to the aggregate amount of the
payments then due under all Series A Equipment Notes;

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

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

SECTION 3.02. EVENT OF LOSS; REPLACEMENT; OPTIONAL REDEMPTION

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

First, (a)to reimburse the Mortgagee and the Note Holders for any
reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or
indemnity by Owner, under the Operative Agreements and then
(b) to pay any other amounts then due (except as provided in
clause "Second" below) to the Mortgagee, the Note Holders and
the other Indenture Indemnitees under this Trust Indenture,
the Participation Agreement or the Equipment Notes;

OWNED AIRCRAFT INDENTURE 18
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Second, (i) to pay the amounts specified in paragraph (i) of clause
"Third" of Section 3.03 hereof plus Make-Whole Amount, if any,
then due and payable in respect of the Series A Equipment
Notes;

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

provided, however, that if a Replacement Airframe or Replacement Engine shall
be substituted for the Airframe or Engine subject to such Event of Loss as
provided in Section 4.05 hereof, any insurance, condemnation or similar
proceeds which result from such Event of Loss and are paid over to the
Mortgagee shall be held by the Mortgagee as permitted by Section 7.04 hereof
(provided that such moneys shall be invested as provided in Section 6.06
hereof) as additional security for the obligations of Owner under Operative
Agreements and such proceeds (and such investment earnings), to the extent not
theretofore applied as provided herein, shall be released to the Owner at the
Owner's written request upon the release of such Airframe or Engine and the
replacement thereof as provided herein.

SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT

Except as otherwise provided in Section 3.04 hereof, all
payments received and amounts held or realized by the Mortgagee (including any
amounts realized by the Mortgagee from the exercise of any remedies pursuant to
Article V hereof) after an Event of Default shall have occurred and be
continuing and after the declaration specified in Section 5.02(b) hereof, as
well as all payments or amounts then held by the Mortgagee as part of the
Collateral, shall be promptly distributed by the Mortgagee in the following
order of priority:

First, so much of such payments or amounts as shall be required to
(i) reimburse the Mortgagee or WTC for any tax (except to the
extent resulting from a failure of the Mortgagee to withhold
taxes pursuant to Section 2.04(b) hereof), expense or other
loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon the rents,
revenues, issues, products and profits of, the property
included in the Collateral (all such property being herein
called the "Mortgaged Property") pursuant to Section 5.03(b)
hereof) incurred by the Mortgagee or WTC (to the extent not
previously reimbursed), the expenses of any sale, or other
proceeding, reasonable attorneys' fees and expenses, court
costs, and any other expenditures incurred or expenditures or
advances made by the Mortgagee, WTC or the Note Holders in the
protection, exercise or enforcement of any right, power or
remedy or any damages sustained by the Mortgagee, WTC or any
Note Holder,

OWNED AIRCRAFT INDENTURE 19
498
liquidated or otherwise, upon such Event of Default shall be
applied by the Mortgagee as between itself, WTC and the Note
Holders in reimbursement of such expenses and any other
expenses for which the Mortgagee, WTC or the Note Holders are
entitled to reimbursement under any Operative Agreement and
(ii) all amounts payable to the other Indenture Indemnitees
hereunder and under the Participation Agreement; and in the
case the aggregate amount to be so distributed is insufficient
to pay as aforesaid in clauses (i) and (ii), then ratably,
without priority of one over the other, in proportion to the
amounts owed each hereunder;

Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders
for payments made pursuant to Section 6.03 hereof (to the
extent not previously reimbursed) shall be distributed to such
then existing or prior Note Holders ratably, without priority
of one over the other, in accordance with the amount of the
payment or payments made by each such then existing or prior
Note Holder pursuant to said Section 6.03 hereof;

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

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

OWNED AIRCRAFT INDENTURE 20
499
all such holders plus the accrued but unpaid interest and
other amounts due thereon (other than the Make-Whole Amount)
to the date of distribution; and

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

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

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

SECTION 3.04. CERTAIN PAYMENTS

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

(b) Notwithstanding anything to the contrary
contained in this Article III, the Mortgagee will distribute promptly upon
receipt any indemnity payment received by it from the Owner in respect of the
Mortgagee in its individual capacity, any Note Holder or any other Indenture
Indemnitee, in each case whether pursuant to Section 8 of the Participation
Agreement, directly to the Person entitled thereto. Any payment received by
the Mortgagee under the third paragraph of Section 2.02 shall be distributed to
the Subordination Agent to be distributed in accordance with the terms of the
Intercreditor Agreement.

SECTION 3.05. OTHER PAYMENTS

Any payments received by the Mortgagee for which no provision
as to the application thereof is made elsewhere in this Trust Indenture or in
any other Operative Agreement shall be distributed by the Mortgagee to the
extent received or realized at any time, in

OWNED AIRCRAFT INDENTURE 21
500
the order of priority specified in Section 3.01 hereof, and after payment in
full of all amounts then due in accordance with Section 3.01 in the manner
provided in clause "Fourth" of Section 3.03 hereof.

ARTICLE IV

COVENANTS OF THE OWNER

SECTION 4.01. LIENS

The Owner will not directly or indirectly create, incur,
assume or suffer to exist any Lien or with respect to the Airframe or any
Engine, title to any of the foregoing or any interest of Owner therein, except
Permitted Liens. The Owner shall promptly, at its own expense, take such
action as may be necessary to duly discharge (by bonding or otherwise) any Lien
other than a Permitted Lien arising at any time.

SECTION 4.02. POSSESSION, OPERATION AND USE, MAINTENANCE,
REGISTRATION AND MARKINGS

(a) General. Except as otherwise expressly
provided herein, the Owner shall be entitled to operate, use, locate, employ or
otherwise utilize or not utilize the Airframe, any Engine or any Parts in any
lawful manner or place in accordance with the Owner's business judgment.

(b) Possession. The Owner, without the prior
consent of Mortgagee, shall not lease or otherwise in any manner deliver,
transfer or relinquish possession of the Aircraft, the Airframe or any Engine
or install any Engine, or permit any Engine to be installed, on any airframe
other than the Airframe; except that the Owner may, without such prior written
consent of Mortgagee:

(i) Subject or permit any Permitted
Lessee to subject any Engine to normal interchange agreements or pooling
agreements or arrangements, in each case customary in the commercial airline
industry and entered into by Owner or such Permitted Lessee, as the case may
be, in the ordinary course of business; provided, however, that if Owner's
title to any such Engine is divested under any such agreement or arrangement,
then such Engine shall be deemed to have suffered an Event of Loss as of the
date of such divestiture, and Owner shall comply with Section 4.04(e) in
respect thereof;

(ii) Deliver or permit any Permitted
Lessee to deliver possession of the Aircraft, Airframe, any Engine or any Part
(x) to the manufacturer thereof or to any third-party maintenance provider for
testing, service, repair, maintenance or overhaul work on the Aircraft,
Airframe, any Engine or any Part, or, to the extent required or permitted by
Section 4.04, for alterations or modifications in or additions to the Aircraft,
Airframe or any Engine or (y) to any Person for the purpose of transport to a
Person referred to in the preceding clause (x);

OWNED AIRCRAFT INDENTURE 22
501
(iii) Install or permit any Permitted
Lessee to install an Engine on an airframe owned by Owner or such Permitted
Lessee, as the case may be, free and clear of all Liens, except (x) Permitted
Liens and those that do not apply to the Engines, and (y) the rights of third
parties under normal interchange or pooling agreements and arrangements of the
type that would be permitted under Section 4.02(b)(i);

(iv) Install or permit any Permitted
Lessee to install an Engine on an airframe leased to Owner or such Permitted
Lessee, or purchased by Owner or such Permitted Lessee subject to a mortgage,
security agreement, conditional sale or other secured financing arrangement,
but only if (x) such airframe is free and clear of all Liens, except (A) the
rights of the parties to such lease, or any such secured financing arrangement,
covering such airframe and (B) Liens of the type permitted by clause (iii)
above and (y) Owner or Permitted Lessee, as the case may be, shall have
received from the lessor, mortgagee, secured party or conditional seller, in
respect of such airframe, a written agreement (which may be a copy of the
lease, mortgage, security agreement, conditional sale or other agreement
covering such airframe), whereby such Person agrees that it will not acquire or
claim any right, title or interest in, or Lien on, such Engine by reason of
such Engine being installed on such airframe at any time while such Engine is
subject to the Lien of this Trust Indenture;

(v) Install or permit any Permitted
Lessee to install an Engine on an airframe owned by Owner or such Permitted
Lessee, leased to Owner or such Permitted Lessee, or purchased by Owner or such
Permitted Lessee subject to a conditional sale or other security agreement
under circumstances where neither clause (iii) or (iv) above is applicable;
provided, however, that any such installation shall be deemed an Event of Loss
with respect to such Engine, and Owner shall comply with Section 4.04(e) hereof
in respect thereof;

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

(vii) Enter into a charter or Wet Lease or
other similar arrangement with respect to the Aircraft or any other aircraft on
which any Engine may be installed (which shall not be considered a transfer of
possession hereunder); provided that the Owner's obligations hereunder shall
continue in full force and effect notwithstanding any such charter or Wet Lease
or other similar arrangement;

(viii) So long as no Event of Default shall
have occurred and be continuing, and subject to the provisions of the
immediately following paragraph, enter into a lease with respect to the
Aircraft, Airframe or any Engine to any Permitted Air Carrier that is not the
subject to any bankruptcy, insolvency, liquidation, reorganization, dissolution
or similar proceeding and shall not have substantially all of its property in
the possession of any liquidator,

OWNED AIRCRAFT INDENTURE 23
502
trustee, receiver or similar person; provided that, in the case only of a lease
to a Permitted Foreign Air Carrier, (A) the United States maintains diplomatic
relations with the country of domicile of such Permitted Foreign Air Carrier
(or, in the case of Taiwan, diplomatic relations at least as good as those in
effect on the Closing Date) and (B) Owner shall have furnished Mortgagee a
favorable opinion of counsel, reasonably satisfactory to Mortgagee, in the
country of domicile of such Permitted Foreign Air Carrier, that (v) the terms
of such lease are the legal, valid and binding obligations of the parties
thereto enforceable under the laws of such jurisdiction, (w) it is not
necessary for Mortgagee to register or qualify to do business in such
jurisdiction, if not already so registered or qualified, as a result, in whole
or in part, of the proposed lease, (x) Mortgagee's Lien in respect of, the
Aircraft, Airframe and Engines will be recognized in such jurisdiction, (y) the
Laws of such jurisdiction of domicile require fair compensation by the
government of such jurisdiction, payable in a currency freely convertible into
Dollars, for the loss of title to the Aircraft, Airframe or Engines in the
event of the requisition by such government of such title (unless Owner shall
provide insurance in the amounts required with respect to hull insurance under
this Trust Indenture covering the requisition of title to the Aircraft,
Airframe or Engines by the government of such jurisdiction so long as the
Aircraft, Airframe or Engines are subject to such lease) and (z) the agreement
of such Permitted Air Carrier that its rights under the lease are subject and
subordinate to all the terms of this Trust Indenture is enforceable against
such Permitted Air Carrier under applicable law;

provided that (1) the rights of any transferee who receives possession by
reason of a transfer permitted by this Section 4.02(b) (other than by a
transfer of an Engine which is deemed an Event of Loss) shall be subject and
subordinate to all the terms of this Trust Indenture, (2) the Owner shall
remain primarily liable for the performance of all of the terms of this Trust
Indenture and all the terms and conditions of this Trust Indenture and the
other Operative Agreements shall remain in effect and (3) no lease or transfer
of possession otherwise in compliance with this Section 4.02(b) shall (x)
result in any registration or re-registration of an Aircraft, except to the
extent permitted by Section 4.02(e) or the maintenance, operation or use
thereof except in compliance with Sections 4.02(c) and 4.02(d) or (y) permit
any action not permitted to the Owner hereunder.

In the case of any lease permitted under this Section 4.02(b), the
Owner will included in such lease appropriate provisions which (t) make such
lease expressly subject and subordinate to all of the terms of this Trust
Indenture, including the rights of the Mortgagee to avoid such lease in the
exercise of its rights to repossession of the Airframe and Engines hereunder;
(u) require the Permitted Lessee to comply with the terms of Section 4.06; and
(v) require that the Airframe or any Engine subject thereto be used in
accordance with the limitations applicable to the Owner's possession and use
provided in this Trust Indenture. No lease permitted under this Section
4.02(b) shall be entered into unless (w) Owner shall provide written notice to
Mortgagee (such notice in the event of a lease to a U.S. Air Carrier to be
given promptly after entering into any such lease or, in the case of a lease to
any other Permitted Air Carrier, 10 days in advance of entering into such
lease); (x) Owner shall furnish to Mortgagee evidence reasonably satisfactory
to Mortgagee that the insurance required by Section 4.06 remains in effect; (y)
all necessary documents shall have been duly filed, registered or recorded in
such public offices as may be required fully to preserve the first priority
security interest

OWNED AIRCRAFT INDENTURE 24
503
(subject to Permitted Liens) of Mortgagee in the Aircraft, Airframe and
Engines; and (z) Owner shall reimburse Mortgagee for all of its reasonable
out-of-pocket fees and expenses, including, without limitation, reasonable fees
and disbursements of counsel, incurred by Mortgagee in connection with any such
lease. For all purposes of this Section, the term "lease" shall be deemed to
include interchange agreements with respect to the Aircraft or Airframe.
Except as otherwise provided herein and without in any way relieving the Owner
from its primary obligation for the performance of its obligations under this
Trust Indenture, the Owner may in its sole discretion permit a lessee to
exercise any or all rights which the Owner would be entitled to exercise under
Sections 4.02 and 4.04, and may cause a lessee to perform any or all of the
Owner's obligations under Article IV, and the Mortgagee agrees to accept actual
and full performance thereof by a lessee in lieu of performance by the Owner.

Mortgagee hereby agrees, and each Note Holder by acceptance of
an Equipment Note agrees, for the benefit of each lessor, conditional seller,
indenture trustee or secured party of any engine leased to, or purchased by,
Owner or any Permitted Lessee subject to a lease, conditional sale, trust
indenture or other security agreement that Mortgagee, each Note Holder and
their respective successors and assigns will not acquire or claim, as against
such lessor, conditional seller, indenture trustee or secured party, any right,
title or interest in any engine as the result of such engine being installed on
the Airframe at any time while such engine is subject to such lease,
conditional sale, trust indenture or other security agreement and owned by such
lessor or conditional seller or subject to a trust indenture or security
interest in favor of such indenture trustee or secured party.

(c) Operation and Use. So long as the Aircraft,
Airframe or any Engine is subject to the Lien of this Trust Indenture, the
Owner shall not operate, use or locate the Aircraft, Airframe or any Engine, or
allow the Aircraft, Airframe or any Engine to be operated, used or located, (i)
in any area excluded from coverage by any insurance required by the terms of
Section 4.06, except in the case of a requisition by the U.S. Government where
the Owner obtains indemnity in lieu of such insurance from the U.S. Government,
or insurance from the U.S. Government, against substantially the same risks and
for at least the amounts of the insurance required by Section 4.06 covering
such area, or (ii) in any recognized area of hostilities unless covered in
accordance with Section 4.06 by war risk insurance, or in either case unless
the Aircraft, the Airframe or any Engine is only temporarily operated, used or
located in such area as a result of an emergency, equipment malfunction,
navigational error, hijacking, weather condition or other similar unforeseen
circumstance, so long as Owner diligently and in good faith proceeds to remove
the Aircraft from such area. So long as the Aircraft, the Airframe or any
Engine is subject to the Lien of this Trust Indenture, the Owner shall not
permit such Aircraft, Airframe or any Engine, as the case may be, to be used,
operated, maintained, serviced, repaired or overhauled (x) in violation of any
Law binding on or applicable to such Aircraft, Airframe or Engine or (y) in
violation of any airworthiness certificate, license or registration of any
Government Entity relating to the Aircraft, the Airframe or any Engine, except
(i) immaterial or non-recurring violations with respect to which corrective
measures are taken promptly by Owner or Permitted Lessee, as the case may be,
upon discovery thereof, or (ii) to the extent the validity or application of
any such Law or requirement relating to any such certificate, license or
registration is being contested in good faith by Owner or Permitted Lessee in
any reasonable

OWNED AIRCRAFT INDENTURE 25
504
manner which does not involve any material risk of the sale, forfeiture or loss
of the Aircraft, Airframe or any Engine, any material risk of criminal
liability or material civil penalty against Mortgagee or impair the Mortgagee's
security interest in the Aircraft, Airframe or any Engine.

(d) Maintenance and Repair. So long as the
Aircraft, Airframe or any Engine is subject to the Lien of this Trust
Indenture, the Owner shall cause the Aircraft, Airframe and each Engine to be
maintained, serviced, repaired and overhauled in accordance with (i)
maintenance standards required by or substantially equivalent to those required
by the FAA or the central aviation authority of Canada, France, Germany, Japan,
the Netherlands or the United Kingdom for the Aircraft, Airframe and Engines,
so as to (A) keep the Aircraft, the Airframe and each Engine in as good
operating condition as on the Closing Date, ordinary wear and tear excepted,
(B) keep the Aircraft in such operating condition as may be necessary to enable
the applicable airworthiness certification of such Aircraft to be maintained
under the regulations of the FAA or other Aviation Authority then having
jurisdiction over the operation of the Aircraft, except during (x) temporary
periods of storage in accordance with applicable regulations, (y) maintenance
and modification permitted hereunder or (z) periods when the FAA or such other
Aviation Authority has revoked or suspended the airworthiness certificates for
Similar Aircraft; and (ii) except during periods when a Permitted Lease is in
effect, the same standards as Owner uses with respect to similar aircraft of
similar size in its fleet operated by Owner in similar circumstances and,
during any period in which a Permitted Lease is in effect, the same standards
used by the Permitted Lessee with respect to similar aircraft of similar size
in its fleet and operated by the Permitted Lessee in similar circumstances.
Owner further agrees that the Aircraft, Airframe and Engines will be
maintained, used, serviced, repaired, overhauled or inspected in compliance
with applicable Laws with respect to the maintenance of the Aircraft and in
compliance with each applicable airworthiness certificate, license and
registration relating to the Aircraft, Airframe or any Engine issued by the
Aviation Authority, other than minor or nonrecurring violations with respect to
which corrective measures are taken upon discovery thereof and except to the
extent Owner or Permitted Lessee is contesting in good faith the validity or
application of any such Law or requirement relating to any such certificate,
license or registration in any reasonable manner which does not create a
material risk of sale, loss or forfeiture of the Aircraft, the Airframe or any
Engine or the interest of Mortgagee therein, or any material risk of criminal
liability or material civil penalty against Mortgagee. The Owner shall
maintain or cause to be maintained the Aircraft Documents in the English
language.

(e) Registration. The Owner on or prior to the
date of the Closing shall cause the Aircraft to be duly registered in its name
under the Act and except as otherwise permitted by this Section 4.02(e) at all
times thereafter shall cause the Aircraft to remain so registered. So long as
no Special Default or Event of Default shall have occurred and be continuing,
Owner may, by written notice to Mortgagee, request to change the country of
registration of the Aircraft. Any such change in registration shall be
effected only in compliance with, and subject to all of the conditions set
forth in, Section 6.4.5 of the Participation Agreement. Unless the Trust
Indenture has been discharged, Owner shall also cause the Trust Indenture to be
duly recorded and at all times maintained of record as a first-priority
perfected mortgage (subject to Permitted Liens) on the Aircraft, the Airframe
and each of the Engines

OWNED AIRCRAFT INDENTURE 26
505
(except to the extent such perfection or priority cannot be maintained solely
as a result of the failure by Mortgagee to execute and deliver any necessary
documents).

(f) Markings. If permitted by applicable Law, on
or reasonably promptly after the Closing Date, Owner will cause to be affixed
to, and maintained in, the cockpit of the Airframe and on each Engine, in each
case, in a clearly visible location, a placard of a reasonable size and shape
bearing the legend: "Subject to a security interest in favor of Wilmington
Trust Company, not in its individual capacity but solely as Mortgagee." Such
placards may be removed temporarily, if necessary, in the course of maintenance
of the Airframe or Engines. If any such placard is damaged or becomes
illegible, Owner shall promptly replace it with a placard complying with the
requirements of this Section.

SECTION 4.03. INSPECTION

(a) At all reasonable times, so long as the
Aircraft is subject to the Lien of this Trust Indenture, Mortgagee and its
authorized representatives (the "Inspecting Parties") may (not more than once
every 12 months unless an Event of Default has occurred and is continuing then
such inspection right shall not be so limited) inspect the Aircraft, Airframe
and Engines (including without limitation, the Aircraft Documents) and any such
Inspecting Party may make copies of such Aircraft Documents not reasonably
deemed confidential by Owner or such Permitted Lessee.

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

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

(d) Each Inspecting Party shall bear its own
expenses in connection with any such inspection (including the cost of any
copies made in accordance with Section 4.03(a)).

SECTION 4.04. REPLACEMENT AND POOLING OF PARTS, ALTERATIONS,
MODIFICATIONS AND ADDITIONS; SUBSTITUTION OF ENGINES

(a) Replacement of Parts. Except as otherwise
provided herein, so long as the Airframe or Engine is subject to the Lien of
this Indenture, Owner, at its own cost and expense, will, or will cause a
Permitted Lessee to, at its own cost and expense, promptly replace (or cause to
be replaced) all Parts which may from time to time be incorporated or installed
in or attached to the Aircraft, Airframe or any Engine and 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.
In addition, Owner may, at its own cost and expense, or may permit a Permitted
Lessee at its own cost and expense to, remove (or cause to be removed)

OWNED AIRCRAFT INDENTURE 27
506
in the ordinary course of maintenance, service, repair, overhaul or testing any
Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use; provided, however,
that Owner, except as otherwise provided herein, at its own cost and expense,
will, or will cause a Permitted Lessee at its own cost and expense to, replace
such Parts as promptly as practicable. All replacement Parts shall be free and
clear of all Liens, except for Permitted Liens and pooling arrangements to the
extent permitted by Section 4.04(c) below (and except in the case of
replacement property temporarily installed on an emergency basis) and shall be
in good operating condition and have a value and utility not less than the
value and utility of the Parts replaced (assuming such replaced Parts were in
the condition required hereunder).

(b) Parts. Except as otherwise provided herein,
any Part at any time removed from the Airframe or any Engine shall remain
subject to the Lien of this Trust Indenture, no matter where located, until
such time as such Part shall be replaced by a Part that has been incorporated
or installed in or attached to such Airframe or any Engine and that meets the
requirements for replacement Parts specified above. Immediately upon any
replacement Part becoming incorporated or installed in or attached to such
Airframe or any Engine as provided in Section 4.04(a), without further act, (i)
the replaced Part shall thereupon be free and clear of all rights of the
Mortgagee and shall no longer be deemed a Part hereunder, and (ii) such
replacement Part shall become subject to this Trust Indenture and be deemed
part of such Airframe or any Engine, as the case may be, for all purposes
hereof to the same extent as the Parts originally incorporated or installed in
or attached to such Airframe or any Engine.

(c) Pooling of Parts. Any Part removed from the
Aircraft, Airframe or an Engine may be subjected by the Owner or a Permitted
Lessee to a normal pooling arrangement customary in the airline industry and
entered into in the ordinary course of business of Owner or Permitted Lessee
that the part replacing such removed Part shall be incorporated or installed in
or attached to such Airframe or any Engine in accordance with Sections 4.04(a)
and 4.04(b) as promptly as practicable after the removal of such removed Part.
In addition, any replacement part when incorporated or installed in or attached
to the Airframe or any Engine may be owned by any third party, subject to a
normal pooling arrangement, so long as the Owner or a Permitted Lessee, at its
own cost and expense, as promptly thereafter as reasonably possible, either (i)
causes such replacement part to become subject to the Lien of this Trust
Indenture, free and clear of all Liens except Permitted Liens, at which time
such replacement part shall become a Part or (ii) replaces such replacement
part by incorporating or installing in or attaching to the Aircraft, Airframe
or any Engine a further replacement Part owned by the Owner free and clear of
all Liens except Permitted Liens and which shall become subject to the Lien of
this Trust Indenture in accordance with Section 4.04(b).

(d) Alterations, Modifications and Additions.
The Owner shall, or shall cause a Permitted Lessee to, make (or cause to be
made) alterations and modifications in an additions to the Aircraft, Airframe
and each Engine as may be required to be made from time to time to meet the
applicable standards of the FAA or other Aviation Authority having jurisdiction
over the operation of the Aircraft, to the extent made mandatory in respect of
the Aircraft (a "Mandatory Modification"); provided however, that the Owner or
a Permitted Lessee may, in

OWNED AIRCRAFT INDENTURE 28
507
good faith and by appropriate procedure, contest the validity or application of
any law, rule, regulation or order in any reasonable manner which does not
materially adversely affect Mortgagee's interest in the Aircraft and does not
involve any material risk of sale, forfeiture or loss of the Aircraft or the
interest of Mortgagee therein, or any material risk of material civil penalty
or any material risk of criminal liability being imposed on Mortgagee or the
holder of any Equipment Note. In addition, the Owner, at its own expense, may,
or may permit a Permitted Lessee at its own cost and expense to, from time to
time make or cause to be made such alterations and modifications in and
additions to the Airframe or any Engine (each an "Optional Modification") as
the Owner or such Permitted Lessee may deem desirable in the proper conduct of
its business including, without limitation, removal of Parts which Owner deems
are obsolete or no longer suitable or appropriate for use in the Aircraft,
Airframe or such Engine; provided, however, that no such Optional Modification
shall (i) materially diminish the fair market value, utility, or useful life of
the Aircraft or any Engine below its fair market value, utility or useful life
immediately prior to such Optional Modification (assuming the Aircraft or such
Engine was in the condition required by the Lease immediately prior to such
Optional Modification) or (ii) cause the Aircraft to cease to have the
applicable standard certificate of airworthiness. All Parts incorporated or
installed in or attached to any Airframe or any Engine as the result of any
alteration, modification or addition effected by the Owner shall be free and
clear of any Liens except Permitted Liens and become subject to the Lien of
this Trust Indenture; provided that the Owner or any Permitted Lessee may, at
any time so long as the Airframe or any Engine is subject to the Lien of this
Trust Indenture, remove any such Part (such Part being referred to herein as a
"Removable Part") from such Airframe or an Engine if (i) such Part is in
addition to, and not in replacement of or in 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 in substitution for, any such original Part, (ii) such Part is not required
to be incorporated or installed in or attached or added to such Airframe or any
Engine pursuant to the terms of Section 4.02(d) or the first sentence of this
Section 4.04(d) and (iii) such Part can be removed from such Airframe or any
Engine without materially diminishing the fair market value, utility or
remaining useful life which such Airframe or any Engine would have had at the
time of removal had such removal not been effected by the Owner, assuming the
Aircraft was otherwise maintained in the condition required by this Trust
Indenture. Upon the removal by the Owner of any such Part as above provided,
title thereto shall, without further act, be free and clear of all rights of
the Mortgagee and such Part shall no longer be deemed a Part hereunder.
Removable Parts may be leased from or financed by third parties other than
Mortgagee.

(e) Substitution of Engines. Upon the occurrence
of an Event of Loss with respect to an Engine under circumstances in which an
Event of Loss with respect to the Airframe has not occurred, Owner shall
promptly (and in any event within 15 days after such occurrence) give the
Mortgagee written notice of such Event of Loss. The Owner shall have the right
at its option at any time, on at least 5 Business Days' prior notice to the
Mortgagee, to substitute, and if an Event of Loss shall have occurred with
respect to an Engine under circumstances in which an Event of Loss with respect
to the Airframe has not occurred, shall within 60 days of the occurrence of
such Event of Loss substitute, a Replacement Engine for any Engine. In such
event, immediately upon the effectiveness of such substitution and without
further act, (i) the replaced Engine shall thereupon be free and clear of all
rights of the Mortgagee

OWNED AIRCRAFT INDENTURE 29
508
and the Lien of this Trust Indenture and shall no longer be deemed an Engine
hereunder and (ii) such Replacement Engine shall become subject to this Trust
Indenture and be deemed part of the Aircraft for all purposes hereof to the
same extent as the replaced Engine. Such Replacement Engine shall be an engine
manufactured by Engine Manufacturer that is the same model as the Engine to be
replaced thereby, or an improved model, and that is suitable for installation
and use on the Airframe, and that has a value, utility and remaining useful
life (without regard to hours and cycles remaining until overhaul) at least
equal to the Engine to be replaced thereby (assuming that such Engine had been
maintained in accordance with this Trust Indenture). The Owner's right to make
a replacement hereunder shall be subject to the fulfillment (which may be
simultaneous with such replacement) of the following conditions precedent at
the Owner's sole cost and expense, and the Mortgagee agrees to cooperate with
the Owner to the extent necessary to enable it to timely satisfy such
conditions:

(i) an executed counterpart of each of
the following documents shall be delivered to the Mortgagee:

(A) a Trust Indenture Supplement covering the
Replacement Engine, which shall have been duly filed for
recordation pursuant to the Act or such other applicable law
of the jurisdiction other than the United States in which the
Aircraft of which such Engine is a part is registered in
accordance with Section 4.02(e), as the case may be;

(B) a full warranty ▇▇▇▇ of sale (as to title),
covering the Replacement Engine, executed by the former owner
thereof in favor of the Owner (or, at the Owner's option,
other evidence of the Owner's ownership of such Replacement
Engine, reasonably satisfactory to the Mortgagee); and

(C) Uniform Commercial Code financing statements
covering the security interests created by this Trust
Indenture (or any similar statements or other documents
required to be filed or delivered pursuant to the laws of the
jurisdiction in which such Aircraft may be registered) as are
deemed necessary or desirable by counsel for the Mortgagee to
protect the security interests of the Mortgagee in the
Replacement Engine;

(ii) the Owner shall cause to be
delivered to the Mortgagee an opinion of counsel to the effect that the Lien of
this Trust Indenture continues to be in full force and effect with respect to
the Replacement Engine and such evidence of compliance with the insurance
provisions of Section 4.06 with respect to such Replacement Engine as Mortgagee
shall reasonably request; and

(iii) the Owner shall have furnished to
Mortgagee an opinion of Owner's aviation law counsel reasonably satisfactory to
Mortgagee and addressed to Mortgagee as to the due filing for recordation of
the Trust Indenture Supplement with respect to such Replacement Engine under
the Act or such other applicable law of the jurisdiction other than the United
States in which the Aircraft is registered in accordance with Section 4.02(e),
as the case may be.

OWNED AIRCRAFT INDENTURE 30
509
(iv) the Owner shall have furnished to
Mortgagee a certificate of a qualified aircraft engineer (who may be an
employee of Owner) certifying that such Replacement Engine has a value and
utility and remaining useful life (without regard to hours and cycles remaining
until overhaul) at least equal to the Engine so replaced (assuming that such
Engine had been maintained in accordance with this Trust Indenture).

Upon satisfaction of all conditions to such substitution, (x)
the Mortgagee shall execute and deliver to the Owner such documents and
instruments, prepared at the Owner's expense, as the Owner shall reasonably
request to evidence the release of such replaced Engine from the Lien of this
Trust Indenture, (y) the Mortgagee shall assign to the Owner all claims it may
have against any other Person relating to any Event of Loss giving rise to such
substitution and (z) the Owner shall receive all insurance proceeds (other than
those reserved to others under Section 4.06(b)) and proceeds in respect of any
Event of Loss giving rise to such replacement to the extent not previously
applied to the purchase price of the Replacement Engine as provided in Sections
4.05(d).

SECTION 4.05. LOSS, DESTRUCTION OR REQUISITION

(a) Event of Loss With Respect to the Airframe.

Upon the occurrence of an Event of Loss with respect to the
Airframe, the Owner shall promptly (and in any event within 15 days after such
occurrence) give the Mortgagee written notice of such Event of Loss. The Owner
shall, within 45 days after such occurrence, give the Mortgagee written notice
of Owner's election to either replace the Airframe as provided under Section
4.05(a)(i) or to make payment in respect of such Event of Loss as provided
under Section 4.05(a)(ii) (it being agreed that if Owner shall not have given
the Mortgagee such notice of such election within the above specified time
period, the Owner shall be deemed to have elected to make payment in respect of
such Event of Loss as provided under Section 4.03(a)(ii)):

(i) if Owner elects to replace the
Airframe, Owner shall, subject to the satisfaction of the conditions contained
in Section 4.05(c), as promptly as possible and in any event within 120 days
after the occurrence of such Event of Loss, cause to be subjected to the Lien
of this Trust Indenture, in replacement of the Airframe with respect to which
the Event of Loss occurred, a Replacement Airframe and, if any Engine shall
have been installed on the Airframe when it suffered the Event of Loss, a
Replacement Engine therefor, such Replacement Airframe and Replacement Engines
to be free and clear of all Liens except Permitted Liens and to have a value,
utility and remaining useful life (without regard to hours or cycles remaining
until the next regular maintenance check) at least equal to the Airframe or
Engine, as the case may be, to be replaced thereby (assuming that such Airframe
or Engine had been maintained in accordance with this Trust Indenture);
provided that if the Owner shall not perform its obligation to effect such
replacement under this clause (i) during the 120-day period of time provided
herein, it shall pay the amounts required to be paid pursuant to and within the
time frame specified in clause (ii) below; or

(ii) if Owner elects to make a payment in
respect of such Event of Loss of the Airframe, Owner shall make a payment to
the Mortgagee for purposes of

OWNED AIRCRAFT INDENTURE 31
510
redeeming Equipment Notes in accordance with Section 2.10 hereof on a date on
or before the Business Day next following the earlier of (x) the 120th day
following the date of the occurrence of such Event of Loss, and (y) the fourth
Business Day following the receipt of insurance proceeds with respect to such
Event of Loss (but in any event not earlier than the date of Owner's election
under Section 4.05(a) to make payment under this section 4.05 (a)(ii)); and
upon such payment and payment of all other Secured Obligations then due and
payable, the Mortgagee shall, at the cost and expense of the Owner, release
from the Lien of this Trust Indenture the Airframe and the Engines, by
executing and delivering to the Owner all documents and instruments as the
Owner may reasonably request to evidence such release.

(b) Effect of Replacement. Should the Owner have
provided a Replacement Airframe and Replacement Engines, if any, as provided
for in Section 4.05(a)(i), (i) the Lien of this Trust Indenture shall continue
with respect to such Replacement Airframe and Replacement Engines, if any, as
though no Event of Loss had occurred; (ii) the Mortgagee shall, at the cost and
expense of the Owner, release from the Lien of this Trust Indenture the
replaced Airframe and Engines, if any, by executing and delivering to the Owner
such documents and instruments as the Owner may reasonably request to evidence
such release; and (iii) in the case of a replacement upon an Event of Loss, the
Mortgagee shall assign to the Owner all claims the Mortgagee may have against
any other Person arising from the Event of Loss and the Owner shall receive all
insurance proceeds (other than those reserved to others under Section 4.06(b))
and proceeds from any award in respect of condemnation, confiscation, seizure
or requisition, including any investment interest thereon, to the extent not
previously applied to the purchase price of the Replacement Airframe and
Replacement Engines, if any, as provided in Sections 4.05(d).

(c) Conditions to Airframe and Engine
Replacement. The Owner's right to substitute a Replacement Airframe and
Replacement Engines, if any, as provided in Section 4.05(a)(i) shall be subject
to the fulfillment, at the Owner's sole cost and expense, in addition to the
conditions contained in such Section 4.05(a)(i), of the following conditions
precedent:

(i) on the date when the Replacement
Airframe and Replacement Engines, if any, is subjected to the Lien of this
Trust Indenture (such date being referred to in this Section 4.05 as the
"Replacement Closing Date"), an executed counterpart of each of the following
documents (or, in the case of the FAA ▇▇▇▇ of Sale and full warranty ▇▇▇▇ of
sale referred to below, a photocopy thereof) shall have been delivered to the
Mortgagee:

(A) a Trust Indenture Supplement covering the
Replacement Airframe and Replacement Engines, if any, which
shall have been duly filed for recordation pursuant to the Act
or such other applicable law of such jurisdiction other than
the United States in which the Replacement Airframe and
Replacement Engines, if any, are to be registered in
accordance with Section 4.02(e), as the case may be;

(B) an FAA ▇▇▇▇ of Sale (or a comparable
document, if any, of another Aviation Authority, if
applicable) covering the Replacement Airframe and

OWNED AIRCRAFT INDENTURE 32
511
Replacement Engines, if any, executed by the former owner
thereof in favor of the Owner;

(C) a full warranty (as to title) ▇▇▇▇ of sale,
covering the Replacement Airframe and Replacement Engines, if
any, executed by the former owner thereof in favor of the
Owner (or, at the Owner's option, other evidence of the
Owner's ownership of such Replacement Airframe and Replacement
Engines, if any, reasonably satisfactory to the Mortgagee);
and

(D) Uniform Commercial Code financing statements
(or any similar statements or other documents required to be
filed or delivered pursuant to the laws of the jurisdiction in
which the Replacement Airframe and Replacement Engines, if
any, may be registered in accordance with Section 4.02(e)) as
are deemed necessary or desirable by counsel for the Mortgagee
to protect the security interests of the Mortgagee in the
Replacement Airframe and Replacement Engines, if any;

(ii) the Replacement Airframe and
Replacement Engines, if any, shall be of the same model as the Airframe or
Engines, as the case may be, or an improved model of such aircraft or engines
of the manufacturer thereof, shall have a value and utility (without regard to
hours or cycles remaining until the next regular maintenance check) at least
equal to, and be in as good operating condition and repair as, the Airframe and
any Engines replaced (assuming such Airframe and Engines had been maintained in
accordance with this Trust Indenture);

(iii) the Mortgagee (acting directly or by
authorization to its special counsel) shall have received satisfactory evidence
as to the compliance with Section 4.06 with respect to the Replacement Airframe
and Replacement Engines, if any;

(iv) on the Replacement Closing Date, (A)
the Owner shall cause the Replacement Airframe and Replacement Engines, if any,
to be subject to the Lien of this Trust Indenture free and clear of Liens
(other than Permitted Liens), (B) the Replacement Airframe shall have been duly
certified by the FAA as to type and airworthiness in accordance with the terms
of this Trust Indenture and (C) application for registration of the Replacement
Airframe in accordance with Section 4.02(e) shall have been duly made with the
FAA or other applicable Aviation Authority and the Owner shall have authority
to operate the Replacement Airframe;

(v) the Mortgagee at the expense of the
Owner, shall have received (acting directly or by authorization to its special
counsel) (A) an opinion of counsel, addressed to the Mortgagee, to the effect
that the Replacement Airframe and Replacement Engine, if any, has or have duly
been made subject to the Lien of this Trust Indenture, and Mortgagee will be
entitled to the benefits of Section 1110 with respect to the Replacement
Airframe, provided that such opinion with respect to Section 1110 need not be
delivered to the extent that immediately prior to such replacement the benefits
of Section 1110 were not, solely by reason of a change in law or court
interpretation thereof, available to Mortgagee, and (B) an

OWNED AIRCRAFT INDENTURE 33
512
opinion of Owner's aviation law counsel reasonably satisfactory to and
addressed to Mortgagee as to the due registration of any such Replacement
Airframe and the due filing for recordation of each Trust Indenture Supplement
with respect to such Replacement Airframe or Replacement Engine under the Act
or such other applicable law of the jurisdiction other than the United States
in which the Replacement Airframe is to be registered in accordance with
Section 4.02(e), as the case may be; and

(vi) the Owner shall have furnished to
the Mortgagee a certificate of a qualified aircraft engineer (who may be an
employee of Owner) certifying that the Replacement Airframe and Replacement
Engines, if any, have a value and utility and remaining useful life (without
regard to hours and cycles remaining until overhaul) at least equal to the
Airframe and any Engines so replaced (assuming that such Airframe and Engines
had been maintained in accordance with this Trust Indenture).

(d) Non-Insurance Payments Received on Account of
an Event of Loss. Any amounts, other than insurance proceeds in respect of
damage or loss not constituting an Event of Loss (the application of which is
provided for in Annex B), received at any time by Mortgagee or Owner from any
Government Entity or any other Person in respect of any Event of Loss will be
applied as follows:

(i) If such amounts are received with respect to
the Airframe, and any Engine installed thereon at the time of
such Event of Loss, upon compliance by Owner with the
applicable terms of Section 4.05(c) with respect to the Event
of Loss for which such amounts are received, such amounts
shall be paid over to, or retained by, Owner;

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

(iii) If such amounts are received, in whole or in
part, with respect to the Airframe, and Owner makes, has made
or is deemed to have made the election set forth in Section
4.05(a)(ii), such amounts shall be applied as follows:

first, if the sum described in Section
4.05(a)(ii) has not then been paid in full by Owner, such
amounts shall be paid to Mortgagee to the extent necessary to
pay in full such sum; and

second, the remainder, if any, shall be paid
to Owner.

(e) Requisition for Use. In the event of a
requisition for use by any Government Entity of the Airframe and the Engines,
if any, or engines installed on such Airframe while such Airframe is subject to
the Lien of this Trust Indenture, the Owner shall promptly notify the Mortgagee
of such requisition and all of the Owner's obligations under this

OWNED AIRCRAFT INDENTURE 34
513
Trust Indenture shall continue to the same extent as if such requisition had
not occurred except to the extent that the performance or observance of any
obligation by the Owner shall have been prevented or delayed by such
requisition; provided that the Owner's obligations under this Section 4.05 with
respect to the occurrence of an Event of Loss for the payment of money and
under Section 4.06 (except while an assumption of liability by the U.S.
Government of the scope referred to in Section 4.02(c) is in effect) shall not
be reduced or delayed by such requisition. Any payments received by the
Mortgagee or the Owner or Permitted Lessee from such Government Entity with
respect to such requisition of use shall be paid over to, or retained by, the
Owner. In the event of an Event of Loss of an Engine resulting from the
requisition for use by a Government Entity of such Engine (but not the
Airframe), the Owner will replace such Engine hereunder by complying with the
terms of Section 4.04(e) and any payments received by the Mortgagee or the
Owner from such Government Entity with respect to such requisition shall be
paid over to, or retained by, the Owner.

(f) Certain Payments to be Held As Security. Any
amount referred to in this Section 4.05 or Section 4.06 which is payable or
creditable to, or retainable by, the Owner shall not be paid or credited to, or
retained by the Owner if at the time of such payment, credit or retention a
Special Default or an Event of Default shall have occurred and be continuing,
but shall be paid to and held by the Mortgagee as security for the obligations
of the Owner under this Trust Indenture and the Operative Agreements, and at
such time as there shall not be continuing any such Special Default or Event of
Default such amount and any gain realized as a result of investments required
to be made pursuant to Section 6.06 shall to the extent not theretofore applied
as provided herein, be paid over to the Owner.

SECTION 4.06. INSURANCE

(a) Owner's Obligation to Insure. Owner shall
comply with, or cause to be complied with, each of the provisions of Annex B,
which provisions are hereby incorporated by this reference as if set forth in
full herein.

(b) Insurance for Own Account. Nothing in
Section 4.06 shall limit or prohibit (a) Owner from maintaining the policies of
insurance required under Annex B with higher limits than those specified in
Annex B, or (b) Mortgagee from obtaining insurance for its own account (and any
proceeds payable under such separate insurance shall be payable as provided in
the policy relating thereto); provided, however, that no insurance may be
obtained or maintained that would limit or otherwise adversely affect the
coverage of any insurance required to be obtained or maintained by Owner
pursuant to this Section 4.06 and Annex B.

(c) Indemnification by Government in Lieu of
Insurance. Mortgagee agrees to accept, in lieu of insurance against any risk
with respect to the Aircraft described in Annex B, indemnification from, or
insurance provided by, the U.S. Government, or upon the written consent of
Mortgagee, other Government Entity, against such risk in an amount that, when
added to the amount of insurance (including permitted self-insurance), if any,
against such risk that Owner (or any Permitted Lessee) may continue to
maintain, in accordance with this

OWNED AIRCRAFT INDENTURE 35
514
Section 11, during the period of such requisition or transfer, shall be at
least equal to the amount of insurance against such risk otherwise required by
this Section 11.

(d) Application of Insurance Proceeds. As
between Owner and Mortgagee, all insurance proceeds received as a result of the
occurrence of an Event of Loss with respect to the Aircraft or any Engine under
policies required to be maintained by Owner pursuant to this Section 4.06 will
be applied in accordance with Section 4.05(d). All proceeds of insurance
required to be maintained by Owner, in accordance with Section 4.06 and Section
B of Annex B, in respect of any property damage or loss not constituting an
Event of Loss with respect to the Aircraft, Airframe or any Engine will be
applied in payment (or to reimburse Owner) for repairs or for replacement
property, and any balance remaining after such repairs or replacement with
respect to such damage or loss shall be paid over to, or retained by, Owner.

SECTION 4.07. MERGER OF OWNER

(a) In General.

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

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

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

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

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

(b) Effect of Merger

Upon any such consolidation or merger of Owner with or into,
or the conveyance, transfer or lease by Owner of all or substantially all of
its assets to, any Person in accordance with this Section 4.07, such Person
will succeed to, and be substituted for, and may exercise every right and power
of, Owner under the Operative Agreements with the same effect as if such person
had been named as "Owner" therein. No such consolidation or merger, or
conveyance, transfer or lease, shall have the effect of releasing Owner or such
Person from any of the obligations, liabilities, covenants or undertakings of
Owner under the Trust Indenture.

OWNED AIRCRAFT INDENTURE 36
515
ARTICLE V

EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE

SECTION 5.01. EVENT OF DEFAULT

(i) the failure of the Owner to pay (i)
principal of, interest on or Make-Whole Amount, if any, under any Equipment
Note when due, and such failure shall continue unremedied for a period of 10
Business Days, or (ii) any other amount payable by it to the Note Holders under
this Trust Indenture or the Participation Agreement when due, and such failure
shall continue for a period in excess of 10 Business Days after Owner has
received written notice from Mortgagee of the failure to make such payment when
due;

(ii) Owner shall fail to carry and
maintain, or cause to be carried and maintained, insurance on and in respect of
the Aircraft, Airframe and Engines in accordance with the provisions of Section
4.06;

(iii) Owner shall fail to observe or
perform (or caused to be observed and performed) in any material respect any
other covenant, agreement or obligation set forth herein or in any other
Operative Agreement to which Owner is a party and such failure shall continue
unremedied for a period of 30 days from and after the date of written notice
thereof to Owner from Mortgagee, unless such failure is capable of being
corrected and Owner shall be diligently proceeding to correct such failure, in
which case there shall be no Event of Default unless and until such failure
shall continue unremedied for a period of 180 days after receipt of such
notice;

(iv) any representation or warranty made
by Owner herein, in the Participation Agreement or in any other Operative
Agreement to which Owner is a party (a) shall prove to have been untrue or
inaccurate in any material respect as of the date made, (b) such untrue or
inaccurate representation or warranty is material at the time in question, (c)
and the same shall remain uncured (to the extent of the adverse impact of such
incorrectness on the interest of the Mortgagee) for a period in excess of 30
days from and after the date of written notice thereof from Mortgagee to Owner;

(v) the Owner shall consent to the
appointment of or taking possession by a receiver, trustee or liquidator of
itself or of a substantial part of its property, or the Owner shall admit in
writing its inability to pay its debts generally as they come due or shall make
a general assignment for the benefit of its creditors, or the Owner shall file
a voluntary petition in bankruptcy or a voluntary petition or an answer seeking
reorganization, liquidation or other relief under any bankruptcy laws or
insolvency laws (as in effect at such time), or an answer admitting the
material allegations of a petition filed against it in any such case, or the

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Owner shall seek relief by voluntary petition, answer or consent, under the
provisions of any other bankruptcy or similar law providing for the
reorganization or winding-up of corporations (as in effect at such time), or
the Owner shall seek an agreement, composition, extension or adjustment with
its creditors under such laws or the Owner's board of directors shall adopt a
resolution authorizing corporate action in furtherance of any of the foregoing;

(vi) an order, judgment or decree shall
be entered by any court of competent jurisdiction appointing, without the
consent of the Owner, a receiver, trustee or liquidator of the Owner or of any
substantial part of its property, or any substantial part of the property of
the Owner shall be sequestered, or granting any other relief in respect of the
Owner as a debtor under any bankruptcy laws or other insolvency laws (as in
effect at such time), and any such order, judgment, decree, or decree of
appointment or sequestration shall remain in force undismissed, unstayed or
unvacated for a period of 90 days after the date of entry thereof; or

(vii) a petition against the Owner in a
proceeding under any bankruptcy laws or other insolvency laws (as in effect at
such time) is filed and not withdrawn or dismissed within 90 days thereafter,
or if, under the provisions of any law providing for reorganization or
winding-up of corporations which may apply to the Owner, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Owner of any
substantial part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished, unstayed or unterminated for a period of
90 days.

SECTION 5.02. REMEDIES

(a) If an Event of Default shall have occurred
and be continuing and so long as the same shall continue unremedied, then and
in every such case the Mortgagee may exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this Article V and
shall have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and may take possession of all or any part of
the properties covered or intended to be covered by the Lien created hereby or
pursuant hereto and may exclude the Owner and all persons claiming under it
wholly or partly therefrom; provided, that the Mortgagee shall give the Owner
twenty 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, even
though it shall not have taken possession of the Aircraft and shall not have
possession thereof at the time of such sale.

(b) If an Event of Default shall have occurred
and be continuing, then and in every such case the Mortgagee may (and shall,
upon receipt of a written demand therefor from a Majority in Interest of Note
Holders), at any time, by delivery of written notice or notices to the Owner,
declare all the Equipment Notes to be due and payable, whereupon the unpaid
Original Amount of all Equipment Notes then outstanding, together with accrued
but unpaid interest thereon (without Make-Whole Amount) and other amounts due
thereunder or otherwise payable hereunder, shall immediately become due and
payable without presentment, demand, protest or notice, all of which are hereby
waived; provided that if an Event of Default referred to in clause (v), (vi) or
(vii) of Section 5.01 hereof shall have occurred, then and in every such case

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the unpaid Original Amount then outstanding, together with accrued but unpaid
interest and all other amounts due hereunder and under the Equipment Notes
shall immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.

This Section 5.02(b), however, is subject to the condition
that, if at any time after the Original Amount of the Equipment Notes shall
have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, all overdue
payments of interest upon the Equipment Notes and all other amounts payable
hereunder or under the Equipment Notes (except the Original Amount of the
Equipment Notes which by such declaration shall have become payable) shall have
been duly paid, and every other Default and Event of Default with respect to
any covenant or provision of this Trust Indenture shall have been cured, then
and in every such case a Majority in Interest of Note Holders may (but shall
not be obligated to), by written instrument filed with the Mortgagee, rescind
and annul the Mortgagee's declaration (or such automatic acceleration) and its
consequences; but no such rescission or annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.

(c) The Note Holders shall be entitled, at any
sale pursuant to this Section 5.02, to credit against any purchase price bid at
such sale by such holder all or any part of the unpaid obligations owing to
such Note Holder and secured by the Lien of this Trust Indenture (only to the
extent that such purchase price would have been paid to such Note Holder
pursuant to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).

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

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

SECTION 5.03. RETURN OF AIRCRAFT, ETC.

(a) If an Event of Default shall have occurred
and be continuing and the Equipment Notes have been accelerated, at the request
of the Mortgagee, the Owner 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
Collateral to which the

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Mortgagee shall at the time be entitled hereunder. If the Owner shall for any
reason fail to execute and deliver such instruments and documents after such
request by the Mortgagee, the Mortgagee may (i) obtain a judgment conferring on
the Mortgagee the right to immediate possession and requiring the Owner to
execute and deliver such instruments and documents to the Mortgagee, to the
entry of which judgment the Owner hereby specifically consents to the fullest
extent permitted by Law, and (ii) pursue all or part of such Collateral
wherever it may be found and may enter any of the premises of Owner wherever
such Collateral may be or be supposed to be and search for such Collateral and
take possession of and remove such Collateral. All expenses of obtaining such
judgment or of pursuing, searching for and taking such property shall, until
paid, be secured by the Lien of this Trust Indenture.

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

SECTION 5.04. REMEDIES CUMULATIVE

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exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the Owner or to be an acquiescence therein.

SECTION 5.05. DISCONTINUANCE OF PROCEEDINGS

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

SECTION 5.06. WAIVER OF PAST DEFAULTS

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

SECTION 5.07. APPOINTMENT OF RECEIVER

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

SECTION 5.08. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF
SALE, ETC.

The Owner irrevocably appoints, while an Event of Default has
occurred and is continuing, the Mortgagee the true and lawful attorney-in-fact
of the Owner (which appointment is coupled with an interest) in its name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien of this Trust Indenture,
whether pursuant to foreclosure or power of sale, assignments and other
instruments as may be necessary or appropriate, with full power of
substitution, the Owner hereby ratifying and confirming all that such attorney
or any substitute shall do by virtue hereof in accordance with

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applicable law. Nevertheless, if so requested by the Mortgagee or any
purchaser, the Owner shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Mortgagee or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.

SECTION 5.09. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT

ARTICLE VI

DUTIES OF THE MORTGAGEE

SECTION 6.01. NOTICE OF EVENT OF DEFAULT

If the Mortgagee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay any installment of
principal and interest on any Equipment Note, the Mortgagee shall give prompt
written notice thereof to each Note Holder. Subject to the terms of Sections
5.06, 6.02 and 6.03 hereof, the Mortgagee shall take such action, or refrain
from taking such action, with respect to such Event of Default or Default
(including with respect to the exercise of any rights or remedies hereunder) as
the Mortgagee shall be instructed in writing by a Majority in Interest of Note
Holders. Subject to the provisions of Section 6.03, if the Mortgagee shall not
have received instructions as above provided within 20 days after mailing
notice of such Event of Default to the Note Holders, the Mortgagee may, subject
to instructions thereafter received pursuant to the preceding provisions of
this Section 6.01, take such action, or refrain from taking such action, but
shall be under no duty to take or refrain from taking any action, with respect
to such Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; provided, however, that the Mortgagee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest
of Note Holders. For all purposes of this Trust Indenture, in the absence of
Actual Knowledge on the part of the Mortgagee, the Mortgagee shall not be
deemed to have knowledge of a Default or an Event of Default (except, the
failure of Owner to pay any installment of principal or interest within one
Business Day after the same shall become due, which failure shall constitute
knowledge of a Default) unless notified in writing by the Owner or one or more
Note Holders.

SECTION 6.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS

Subject to the terms of Sections 5.02(a), 5.06, 6.01 and 6.03
hereof, upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Mortgagee shall, subject to the terms
of this Section 6.02, take such of the following actions

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521
as may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions and (ii) give such notice or direction or exercise such right,
remedy or power hereunder with respect to any part of the Collateral as shall
be specified in such instructions; it being understood that without the written
instructions of a Majority in Interest of Note Holders, the Mortgagee shall
not, except as provided in Section 6.01, approve any such matter as
satisfactory to the Mortgagee.

The Mortgagee will execute and the Owner will file such
continuation statements with respect to financing statements relating to the
security interest created hereunder in the Collateral as may be specified from
time to time in written instructions of a Majority in Interest of Note Holders
(which instructions shall be accompanied by the form of such continuation
statement so to be filed). The Mortgagee will furnish to each Note Holder,
promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates and other instruments furnished to the
Mortgagee hereunder

SECTION 6.03. INDEMNIFICATION

The Mortgagee shall not be required to take any action or
refrain from taking any action under Section 6.01 (other than the first
sentence thereof), 6.02 or Article V hereof unless the Mortgagee shall have
been indemnified to its reasonable satisfaction against any liability, cost or
expense (including counsel fees) which may be incurred in connection therewith
pursuant to a written agreement with one or more Note Holders. The Mortgagee
agrees that it shall look solely to the Note Holders for the satisfaction of
any indemnity (except expenses for foreclosure of the type referred to in
clause "First" of Section 3.03 hereof) owed to it pursuant to this Section
6.03. The Mortgagee shall not be under any obligation to take any action under
this Trust Indenture or any other Operative Agreement and nothing herein or
therein shall require the Mortgagee to expend or risk its own funds or
otherwise incur the risk of any financial liability in the performance of any
of its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it (the written indemnity of any Note Holder who is a
QIB, signed by an authorized officer thereof, in favor of, delivered to and in
form reasonably satisfactory to the Mortgagee shall be accepted as reasonable
assurance of adequate indemnity). The Mortgagee shall not be required to take
any action under Section 6.01 (other than the first sentence thereof) or 6.02
or Article V hereof, nor shall any other provision of this Trust Indenture or
any other Operative Agreement be deemed to impose a duty on the Mortgagee to
take any action, if the Mortgagee shall have been advised by counsel that such
action is contrary to the terms hereof or of the Lease or is otherwise contrary
to Law.

SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST
INDENTURE OR INSTRUCTIONS

The Mortgagee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Collateral, or to otherwise take or
refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Collateral, except as expressly provided by the
terms of

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522
this Trust Indenture or as expressly provided in written instructions from Note
Holders as provided in this Trust Indenture; and no implied duties or
obligations shall be read into this Trust Indenture against the Mortgagee. The
Mortgagee agrees that it will in its individual capacity and at its own cost
and expense (but without any right of indemnity in respect of any such cost or
expense under Section 8.01 hereof), promptly take such action as may be
necessary duly to discharge all liens and encumbrances on any part of the
Collateral which result from claims against it in its individual capacity not
related to the ownership of the Aircraft or the administration of the
Collateral or any other transaction pursuant to this Trust Indenture or any
document included in the Collateral.

SECTION 6.05. NO ACTION EXCEPT UNDER TRUST INDENTURE OR
INSTRUCTIONS

The Mortgagee will not use, operate, store, lease, control,
manage, sell, dispose of or otherwise deal with the Aircraft or any other part
of the Collateral except in accordance with the powers granted to, or the
authority conferred upon the Mortgagee pursuant to this Trust Indenture and in
accordance with the express terms hereof.

SECTION 6.06. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE

Any amounts held by the Mortgagee pursuant to the proviso to
the first sentence of Section 3.01, pursuant to Section 3.02, or pursuant to
any provision of any other Operative Agreement providing for amounts to be held
by the Mortgagee which are not distributed pursuant to the other provisions of
Article III hereof shall be invested by the Mortgagee from time to time in Cash
Equivalents as directed by the Owner so long as the Mortgagee may acquire the
same using its best efforts. Unless otherwise expressly provided in this Trust
Indenture, any income realized as a result of any such investment, net of the
Mortgagee's reasonable fees and expenses in making such investment, shall be
held and applied by the Mortgagee in the same manner as the principal amount of
such investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Mortgagee shall not be liable for any loss resulting from any
investment required to be made by it under this Trust Indenture other than by
reason of its willful misconduct or gross negligence, and any such investment
may be sold (without regard to its maturity) by the Mortgagee without
instructions whenever such sale is necessary to make a distribution required by
this Trust Indenture.

ARTICLE VII

THE MORTGAGEE

SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES

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523
any circumstances, except (i) for its own willful misconduct or gross
negligence (other than for the handling of funds, for which the standard of
accountability shall be willful misconduct or negligence), (ii) as provided in
the fourth sentence of Section 2.04(a) hereof and the last sentence of Section
6.04 hereof, and (iii) from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder.

SECTION 7.02. ABSENCE OF DUTIES

Except in accordance with written instructions furnished
pursuant to Section 6.01 or 6.02 hereof, and except as provided in, and without
limiting the generality of, Sections 6.03, 6.04 and 7.07 hereof the Mortgagee
shall have no duty (i) to see to any registration of the Aircraft or any
recording or filing of this Trust Indenture or any other document, or to see to
the maintenance of any such registration, recording or filing, (ii) to see to
any insurance on the Aircraft or to effect or maintain any such insurance,
whether or not Owner 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 Collateral, (iv) to confirm, verify or inquire into the failure to
receive any financial statements from Owner, or (v) to inspect the Aircraft at
any time or ascertain or inquire as to the performance or observance of any of
Owner's covenants herein or any Permitted Lessee's covenants under any assigned
Permitted Lease with respect to the Aircraft.

SECTION 7.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT
OR DOCUMENTS

THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT
MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND 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 The
Mortgagee, in its individual or trust capacities, does not make or shall not be
deemed to have made any representation or warranty as to the validity, legality
or enforceability of this Trust Indenture, the Participation Agreement, the
Equipment Notes, or the Purchase Agreement, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner made in its individual capacity and the representations
and warranties of the Mortgagee in its individual capacity, in each case
expressly made in this Trust Indenture or in the Participation Agreement. The
Note Holders make no representation or warranty hereunder whatsoever.

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524
SECTION 7.04. NO SEGREGATION OF MONIES; NO INTEREST

Any monies paid to or retained by the Mortgagee pursuant to
any provision hereof and not then required to be distributed to the Note
Holders, or the Owner as provided in Article III hereof need not be segregated
in any manner except to the extent required by Law or Section 6.06 hereof, and
may be deposited under such general conditions as may be prescribed by Law, and
the Mortgagee shall not be liable for any interest thereon (except that the
Mortgagee shall invest all monies held as directed by Owner so long as no Event
of Default has occurred and is continuing (or in the absence of such direction,
by the Majority In Interest of Note Holders) in Cash Equivalents; provided,
however, that any payments received, or applied hereunder, by the Mortgagee
shall be accounted for by the Mortgagee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.

SECTION 7.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL

The Mortgagee shall not 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 Mortgagee may accept a copy of a resolution of the Board of
Directors (or Executive Committee thereof) of the Owner, certified by the
Secretary or an Assistant Secretary thereof as duly adopted and in full force
and effect, as conclusive evidence that such resolution has been duly adopted
and that the same is in full force and effect. As to the aggregate unpaid
Original Amount of Equipment Notes outstanding as of any date, the Owner 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 the Owner the manner of which is not specifically described
herein, the Mortgagee may for all purposes hereof rely on a certificate, signed
by a duly authorized officer of the Owner, as to such fact or matter, and such
certificate shall constitute full protection to the Mortgagee for any action
taken or omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Mortgagee 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 Collateral, advise
with counsel, accountants and other skilled persons to be selected and retained
by it, and the Mortgagee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.

SECTION 7.06. COMPENSATION

The Mortgagee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and
expenses of counsel), for all services rendered hereunder and shall, on and
subsequent to an Event of Default hereunder, have a priority claim on the
Collateral for the payment of such compensation, to the extent that such
compensation shall not be paid by Owner, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Collateral toward such payments. The Mortgagee agrees that
it shall have no right against the Note Holders for any fee as compensation for
its services as trustee under this Trust Indenture.

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525
SECTION 7.07. INSTRUCTIONS FROM NOTE HOLDERS

ARTICLE VIII

INDEMNIFICATION

SECTION 8.01. SCOPE OF INDEMNIFICATION

The Mortgagee shall be indemnified by the Owner to the extent
and in the manner provided in Section 8 of the Participation Agreement.

ARTICLE IX

SUCCESSOR AND SEPARATE TRUSTEES

SECTION 9.01. RESIGNATION OF MORTGAGEE; APPOINTMENT OF
SUCCESSOR

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

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

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

(d) Any corporation into which the Mortgagee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Mortgagee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Mortgagee may be transferred, shall, subject to the terms
of paragraph (c) of this Section 9.01, be a successor Mortgagee and the
Mortgagee under this Trust Indenture without further act.

SECTION 9.02. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES

(a) Whenever (i) the Mortgagee shall deem it
necessary or desirable in order to conform to any Law of any jurisdiction in
which all or any part of the Collateral shall be situated or to make any claim
or bring any suit with respect to or in connection with the Collateral this
Trust Indenture, any other Indenture Agreement, the Equipment Notes or any of
the transactions contemplated by the Participation Agreement, (ii) the
Mortgagee shall be advised by counsel satisfactory to it that it is so
necessary or prudent in the interests of the Note Holders (and the Mortgagee
shall so advise the Owner), or (iii) the Mortgagee shall have been requested to
do so by a Majority in Interest of Note Holders, then in any such case, the
Mortgagee and, upon the written request of the Mortgagee, the Owner, shall
execute and deliver an indenture supplemental hereto and such other instruments
as may from time to time be necessary or advisable either (1) to constitute one
or more bank or trust companies or one or more persons approved by the
Mortgagee, either to act jointly with the Mortgagee as additional trustee or
trustees of all or any part of the Collateral, or to act as separate trustee or
trustees of all or any part of the Collateral, in each case with such rights,
powers, duties and obligations consistent with this Trust Indenture as may be
provided in such supplemental indenture or other

OWNED AIRCRAFT INDENTURE 48
527
instruments as the Mortgagee or a Majority in Interest of Note Holders may deem
necessary or advisable, or (2) to clarify, add to or subtract from the rights,
powers, duties and obligations theretofore granted any such additional or
separate trustee, subject in each case to the remaining provisions of this
Section 9.02. If the Owner shall not have taken any action requested of it
under this Section 9.02(a) that is permitted or required by its terms within 15
days after the receipt of a written request from the Mortgagee so to do, or if
an Event of Default shall have occurred and be continuing, the Mortgagee may
act under the foregoing provisions of this Section 9.02(a) without the
concurrence of the Owner, and the Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Mortgagee, its agent and
attorney-in-fact to act for it under the foregoing provisions of this Section
9.02(a) in either of such contingencies. The Mortgagee may, in such capacity,
execute, deliver and perform any such supplemental indenture, or any such
instrument, as may be required for the appointment of any such additional or
separate trustee or for the clarification of, addition to or subtraction from
the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 9.02(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties
and obligations of such additional or separate trustee shall revert to the
Mortgagee until a successor additional or separate trustee is appointed as
provided in this Section 9.02(a).

(b) No additional or separate trustee shall be
entitled to exercise any of the rights, powers, duties and obligations
conferred upon the Mortgagee in respect of the custody, investment and payment
of monies and all monies received by any such additional or separate trustee
from or constituting part of the Collateral or otherwise payable under any
Operative Agreement to the Mortgagee shall be promptly paid over by it to the
Mortgagee. All other rights, powers, duties and obligations conferred or
imposed upon any additional or separate trustee shall be exercised or performed
by the Mortgagee and such additional or separate trustee jointly except to the
extent that applicable Law of any jurisdiction in which any particular act is
to be performed renders the Mortgagee incompetent or unqualified to perform
such act, in which event such rights, powers, duties and obligations (including
the holding of title to all or part of the Collateral in any such jurisdiction)
shall be exercised and performed by such additional or separate trustee. No
additional or separate trustee shall take any discretionary action except on
the instructions of the Mortgagee or a Majority in Interest of Note Holders.
No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder, except that the Mortgagee shall be
liable for the consequences of its lack of reasonable care in selecting, and
the Mortgagee's own actions in acting with, any additional or separate trustee.
Each additional or separate trustee appointed pursuant to this Section 9.02
shall be subject to, and shall have the benefit of Articles V through IX and
Article XI hereof insofar as they apply to the Mortgagee. The powers of any
additional or separate trustee appointed pursuant to this Section 9.02 shall
not in any case exceed those of the Mortgagee hereunder.

(c) If at any time the Mortgagee shall deem it no
longer necessary or in order to conform to any such Law or take any such action
or shall be advised by such counsel that it is no longer so necessary or
desirable in the interest of the Note Holders, or in the event that the
Mortgagee shall have been requested to do so in writing by a Majority in
Interest of Note Holders, the Mortgagee and, upon the written request of the
Mortgagee, the Owner, shall execute

OWNED AIRCRAFT INDENTURE 49
528
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee.
The Mortgagee may act on behalf of the Owner under this Section 9.02(c) when
and to the extent it could so act under Section 9.02(a) hereof.

ARTICLE X

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS

SECTION 10.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS

(a) The Mortgagee agrees with the Note Holders
that it shall not enter into any amendment, waiver or modification of,
supplement or consent to this Trust Indenture, or any other Operative Agreement
to which it is a party, unless such supplement, amendment, waiver, modification
or consent is consented to in writing by a Majority in Interest of Note
Holders, but upon the written request of a Majority in Interest of Note
Holders, the Mortgagee shall from time to time enter into any such supplement
or amendment, or execute and deliver any such waiver, modification or consent,
as may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner, as may be appropriate, the Airframe
Manufacturer or the Engine Manufacturer; provided, however, that, without the
consent of each holder of an affected Equipment Note then outstanding and of
each Liquidity Provider, no such amendment, waiver or modification of the terms
of, or consent under, any thereof, shall (i) modify any of the provisions of
this Section 10.01, or of Article II or III or Section 5.01, 5.02(c), 5.02(d),
or 6.02 hereof, the definitions of "Event of Default," "Default," "Majority in
Interest of Note Holders," "Make-Whole Amount" or "Note Holder," or the
percentage of Note Holders required to take or approve any action hereunder,
(ii) reduce the amount, or change the time of payment or method of calculation
of any amount, of Original Amount, Make-Whole Amount, if any, or interest with
respect to any Equipment Note, (iii) reduce, modify or amend any indemnities in
favor of the Mortgagee or the Note Holders (except that the Mortgagee may
consent to any waiver or reduction of an indemnity payable to it), or (iv)
permit the creation of any Lien on the Trust Indenture Estate or any part
thereof other than Permitted Liens or deprive any Note Holder of the benefit of
the Lien of this Trust Indenture on the Collateral, except as provided in
connection with the exercise of remedies under Article V hereof.

(b) The Owner and the Mortgagee may enter into
one or more agreements supplemental hereto without the consent of any Note
Holder for any of the following purposes: (i) (a) to cure any defect or
inconsistency herein or in the Equipment Notes, or to make any change not
inconsistent with the provisions hereof (provided that such change does not
adversely affect the interests of any Note Holder in its capacity solely as
Note Holder) or (b) to cure any ambiguity or correct any mistake; (ii) to
evidence the succession of another party as the Owner in accordance with the
terms hereof or to evidence the succession of a new trustee hereunder pursuant
hereto, the removal of the trustee hereunder or the appointment of any
co-trustee or co-trustees or any separate or additional trustee or trustees;
(iii) to convey, transfer,

OWNED AIRCRAFT INDENTURE 50
529
assign, mortgage or pledge any property to or with the Mortgagee or to make any
other provisions with respect to matters or questions arising hereunder so long
as such action shall not adversely affect the interests of the Note Holders in
its capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Trust Indenture or
better to assure, convey and confirm unto the Mortgagee any property subject or
required to be subject to the Lien of this Trust Indenture, the Airframe or
Engines or any Replacement Airframe or Replacement Engine; (v) to add to the
covenants of the Owner for the benefit of the Note Holders, or to surrender any
rights or power herein conferred upon the Owner; (vi) to add to the rights of
the Note Holders; and (vii) to include on the Equipment Notes any legend as may
be required by Law.

SECTION 10.02. MORTGAGEE PROTECTED

If, in the opinion of the institution acting as Mortgagee
hereunder, any document required to be executed by it pursuant to the terms of
Section 10.01 hereof affects any right, duty, immunity or indemnity with
respect to such institution under this Trust Indenture, such institution may in
its discretion decline to execute such document.

SECTION 10.03. DOCUMENTS MAILED TO NOTE HOLDERS

Promptly after the execution by the Owner or the Mortgagee of
any document entered into pursuant to Section 10.01 hereof, the Mortgagee shall
mail, by first class mail, postage prepaid, a copy thereof to Owner (if not a
party thereto) and to each Note Holder at its address last set forth in the
Equipment Note Register, but the failure of the Mortgagee to mail such copies
shall not impair or affect the validity of such document.

SECTION 10.04. NO REQUEST NECESSARY FOR TRUST INDENTURE
SUPPLEMENT

No written request or consent of the Note Holders pursuant to
Section 10.01 hereof shall be required to enable the Mortgagee to execute and
deliver a Trust Indenture Supplement specifically required by the terms hereof.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. TERMINATION OF TRUST INDENTURE

OWNED AIRCRAFT INDENTURE 51
530
deliver such instrument as aforesaid; provided, however, that this Trust
Indenture and the trusts created hereby shall earlier terminate and this Trust
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Mortgagee of all property constituting part of the
Collateral and the final distribution by the Mortgagee of all monies or other
property or proceeds constituting part of the Collateral in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Trust Indenture and
the trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.

SECTION 11.02. NO LEGAL TITLE TO COLLATERAL IN NOTE HOLDERS

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

SECTION 11.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING

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

SECTION 11.04. TRUST INDENTURE FOR BENEFIT OF OWNER,
MORTGAGEE, NOTE HOLDERS AND THE OTHER INDENTURE INDEMNITEES

Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner, the Mortgagee, the
Note Holders and the other Indenture Indemnitees, any legal or equitable right,
remedy or claim under or in respect of this Trust Indenture, except that the
persons referred to in the last paragraph of Section 4.02(b) shall be third
party beneficiaries of such paragraph.

SECTION 11.05. NOTICES

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531
as such party shall have furnished by notice to the Owner and the Mortgagee,
or, until an address is so furnished, addressed to the address of such party
(if any) set forth on Schedule 1 to the Participation Agreement or in the
Equipment Note Register. Whenever any notice in writing is required to be
given by the Owner or the Mortgagee or any Note Holder to any of the other of
them, such notice shall be deemed given and such requirement satisfied when
such notice is received, or if such notice is mailed by certified mail, postage
prepaid, three Business Days after being mailed, addressed as provided above.
Any party hereto may change the address to which notices to such party will be
sent by giving notice of such change to the other parties to this Trust
Indenture.

SECTION 11.06. SEVERABILITY

SECTION 11.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS

No term or provision of this Trust Indenture or the Equipment
Notes may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner and the Mortgagee, in compliance with
Section 10.01 hereof. Any waiver of the terms hereof or of any Equipment Note
shall be effective only in the specific instance and for the specific purpose
given.

SECTION 11.08. SUCCESSORS AND ASSIGNS

SECTION 11.09. HEADINGS

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

SECTION 11.10. NORMAL COMMERCIAL RELATIONS

Anything contained in this Trust Indenture to the contrary
notwithstanding. Owner and Mortgagee may conduct any banking or other
financial transactions, and have banking or other commercial relationships,
with Owner, fully to the same extent as if this Trust

OWNED AIRCRAFT INDENTURE 53
532
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to Owner for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.

SECTION 11.11 GOVERNING LAW; COUNTERPART FORM

SECTION 11.12. VOTING BY NOTE HOLDERS

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

SECTION 11.13. BANKRUPTCY

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

CONTINENTAL AIRLINES, INC.

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

WILMINGTON TRUST COMPANY,
as Mortgagee

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

OWNED AIRCRAFT INDENTURE 54
533
ANNEX A

DEFINITIONS

GENERAL PROVISIONS

(a) In each Operative Agreement, unless otherwise
expressly provided, a reference to:

(i) each of "Owner," "Mortgagee," "Note Holder" or any other
person includes, without prejudice to the provisions of any
Operative Agreement, any successor in interest to it and any
permitted transferee, permitted purchaser or permitted
assignee of it;

(ii) words importing the plural include the singular and words
importing the singular include the plural;

(iii) any agreement, instrument or document, or any annex, schedule
or exhibit thereto, or any other part thereof, includes,
without prejudice to the provisions of any Operative
Agreement, that agreement, instrument or document, or annex,
schedule or exhibit, or part, respectively, as amended,
modified or supplemented from time to time in accordance with
its terms and in accordance with the Operative Agreements, and
any agreement, instrument or document entered into in
substitution or replacement therefor (including, without
limitation, in the case of each Pass Through Trust Agreement,
the "Related Pass Through Trust Agreement" as defined
therein);

(iv) any provision of any Law includes any such provision as
amended, modified, supplemented, substituted, reissued or
reenacted prior to the Closing Date, and thereafter from time
to time;

(v) the words "Agreement," "this Agreement," "hereby," "herein,"
"hereto," "hereof" and "hereunder" and words of similar import
when used in any Operative Agreement refer to such Operative
Agreement as a whole and not to any particular provision of
such Operative Agreement;

(vi) the words "including," "including, without limitation,"
"including, but not limited to," and terms or phrases of
similar import when used in any Operative Agreement, with
respect to any matter or thing, mean including, without
limitation, such matter or thing; and

(vii) a "Section," an "Exhibit," an "Annex" or a "Schedule" in any
Operative Agreement, or in any annex thereto, is a reference
to a section of, or an exhibit, an annex or a schedule to,
such Operative Agreement or such annex, respectively.

OWNED AIRCRAFT INDENTURE
534
(b) Each exhibit, annex and schedule to each
Operative Agreement is incorporated in, and shall be deemed to be a part of,
such Operative Agreement.

(c) Unless otherwise defined or specified in any
Operative Agreement, all accounting terms therein shall be construed and all
accounting determinations thereunder shall be made in accordance with GAAP.

(d) Headings used in any Operative Agreement are
for convenience only and shall not in any way affect the construction of, or be
taken into consideration in interpreting, such Operative Agreement.

(e) For purposes of each Operative Agreement, the
occurrence and continuance of a Default or Event of Default referred to in
Section 5.01(v),(vi) or (vii) shall not be deemed to prohibit the Owner from
taking any action or exercising any right that is conditioned on no Special
Default, Default or Event of Default having occurred and be continuing if such
Special Default, Default or Event of Default consists of the institution of
reorganization proceedings with respect to Owner under Chapter 11 of the
Bankruptcy Code and the trustee or debtor-in- possession in such proceedings
shall have (i) agreed to perform its obligations under the Trust Indenture with
the approval of the applicable court and thereafter shall have continued to
perform such obligations in accordance with Section 1110 or (ii) shall have
assumed the Trust Indenture with the approval of the relevant court and
thereafter shall have continued to perform its obligations under the Trust
Indenture.

DEFINED TERMS

"Act" means part A of subtitle VII of title 49, United States Code.

"Actual Knowledge" means (a) as it applies to Mortgagee, actual
knowledge of a responsible officer in the Corporate Trust Office, and (b) as it
applies to Owner, actual knowledge of a Vice President or more senior officer
of Owner or any other officer of Owner having responsibility for the
transactions contemplated by the Operative Agreements; provided that each of
Owner and Mortgagee shall be deemed to have "Actual Knowledge" of any matter as
to which it has received notice from Owner, any Note Holder or Mortgagee, such
notice having been given pursuant to Section 11.05 of the Trust Indenture.

"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.

"Aircraft" means, collectively, the Airframe and Engines.

OWNED AIRCRAFT INDENTURE 2
535
"Aircraft ▇▇▇▇ of Sale" means the full warranty ▇▇▇▇ of sale covering
the Aircraft delivered by Airframe Manufacturer to Owner on the Closing Date.

"Aircraft Documents" means all technical data, manuals and log books,
and all inspection, modification and overhaul records and other service,
repair, maintenance and technical records that are required by the FAA (or the
relevant Aviation Authority), to be maintained with respect to the Aircraft,
Airframe, Engines or Parts, and such term shall include all additions,
renewals, revisions and replacements of any such materials from time to time
made, or required to be made, by the FAA (or other Aviation Authority)
regulations, and in each case in whatever form and by whatever means or medium
(including, without limitation, microfiche, microfilm, paper or computer disk)
such materials may be maintained or retained by or on behalf of Owner
(provided, that all such materials shall be maintained in the English
language).

"Airframe" means (a) the aircraft (excluding Engines or engines from
time to time installed thereon) manufactured by Airframe Manufacturer and
identified by Airframe Manufacturer's model number, United States registration
number and Airframe Manufacturer's serial number set forth in the initial Trust
Indenture Supplement and any Replacement Airframe and (b) any and all Parts
incorporated or installed in or attached or appurtenant to such airframe, and
any and all Parts removed from such airframe, unless the Lien of the Trust
Indenture shall not be applicable to such Parts in accordance with Section 4.04
of the Trust Indenture. Upon substitution of a Replacement Airframe under and
in accordance with the Lease, such Replacement Airframe shall become subject to
the Lease and shall be the "Airframe" for all purposes of the Lease and the
other Operative Agreements and thereupon the Airframe for which the
substitution is made shall no longer be subject to the Lease, and such replaced
Airframe shall cease to be the "Airframe."

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

"Amortization Schedule" means, with respect to each Equipment Note,
the amortization schedule for such Equipment Note delivered pursuant to Section
2.02 of the Trust Indenture.

"Applicable Pass Through Trust" means each of the separate pass
through trusts created under the Applicable Pass Through Trust Agreements.

"Applicable Pass Through Trust Agreement" means each of the separate
Pass Through Trust Agreements by and between the Owner and an Applicable Pass
Through Trustee.

"Applicable Pass Through Trustee" means each Pass Through Trustee that
is a party to the Participation Agreement.

OWNED AIRCRAFT INDENTURE 3
536
"Appraiser" means a firm of internationally recognized, independent
aircraft appraisers.

"Aviation Authority" means the FAA or, if the Aircraft is permitted to
be, and is, registered with any other Government Entity under and in accordance
with Section 4.02 (e) of the Trust Indenture and Section 6.4.5 of the
Participation Agreement, such other Government Entity.

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq.

"Bills of Sale" means the FAA ▇▇▇▇ of Sale and the Aircraft ▇▇▇▇ of
Sale.

"Cash Equivalents" means the following securities (which shall mature
within 90 days of the date of purchase thereof): (a) direct obligations of the
U.S. Government; (b) obligations fully guaranteed by the U.S. Government; (c)
certificates of deposit issued by, or bankers' acceptances of, or time deposits
or a deposit account with, Mortgagee or any bank, trust company or national
banking association incorporated or doing business under the laws of the United
States or any state thereof having a combined capital and surplus and retained
earnings of at least $500,000,000 and having a rate of "C" or better from the
Thomson BankWatch Service; or (d) commercial paper of any issuer doing business
under the laws of the United States or one of the states thereof and in each
case having a rating assigned to such commercial paper by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. equal to A1 or higher.

"Citizen of the United States" is defined in 49 U.S.C. Section
40102(a)(15).

OWNED AIRCRAFT INDENTURE 4
537
"Closing" means the closing of the transactions contemplated by the
Participation Agreement.

"Closing Date" means the date on which the Closing occurs.

"Code" means the Internal Revenue Code of 1986, as amended; provided
that, when used in relation to a Plan, "Code" shall mean the Internal Revenue
Code of 1986 and any regulations and rulings issued thereunder, all as amended
and in effect from time to time.

"Collateral" is defined in the Granting Clause of the Trust Indenture.

"Consent and Agreement" means the Manufacturer Consent and Agreement
____, dated as of even date with the Participation Agreement, of Airframe
Manufacturer.

"CRAF" means the Civil Reserve Air Fleet Program established pursuant
to 10 U.S.C. Section 9511-13 or any similar substitute program.

"Debt Rate" means, with respect to (i) any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to
the Trust Indenture and (ii) for any other purpose, with respect to any period,
the weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.

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

"Deposit Agreement" means each of the four Deposit Agreements between
the Escrow Agent and the Depositary, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, provided that, for purposes of
any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Owner.

"Depositary" means Credit Suisse First Boston, New York Branch, as
Depositary under each Deposit Agreement.

"Dollars," "United States Dollars" or "$" means the lawful currency of
the United States.

"DOT" means the Department of Transportation of the United States or
any Government Entity succeeding to the functions of such Department of
Transportation.

OWNED AIRCRAFT INDENTURE 5
538
"Engine" means (a) each of the engines manufactured by Engine
Manufacturer and identified by Engine Manufacturer's model number and Engine
Manufacturer's serial number set forth in the initial Trust Indenture
Supplement and originally installed on the Airframe on the Closing Date, and
any Replacement Engine, in any case whether or not from time to time installed
on such Airframe or installed on any other airframe or aircraft, and (b) any
and all Parts incorporated or installed in or attached or appurtenant to such
engine, and any and all Parts removed from such engine, unless the Lien of the
Trust Indenture shall not apply to such Parts in accordance with Section 4.04
of the Trust Indenture. Upon substitution of a Replacement Engine under and in
accordance with the Trust Indenture, such Replacement Engine shall become
subject to the Trust Indenture and shall be an "Engine" for all purposes of the
Trust Indenture and the other Operative Agreements and thereupon the Engine for
which the substitution is made shall no longer be subject to the Trust
Indenture, and such replaced Engine shall cease to be an "Engine."

"Engine Consent and Agreement" means the Engine Manufacturer Consent
and Agreement ___ dated as of even date with the Participation Agreement, of
Engine Manufacturer.

"Engine Manufacturer" means _________________ a corporation organized
under the laws of __________.

"Equipment Note Register" is defined in Section 2.07 of the Trust
Indenture.

"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations and rulings issued thereunder all as amended and in effect from
time to time.

"Escrow Agent" means First Security Bank, National Association, as
Escrow Agent under each of the Escrow Agreements.

"Escrow Agreement" means each of the four Escrow and Paying Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial
purchasers of the Pass Through Certificates named therein and one of the Pass
Through Trustees, dated as of the Issuance Date, each of which relates to one
of the Pass Through Trusts, provided that, for purposes of any obligation of
Owner, no amendment, modification or supplement to, or substitution or
replacement of, any such Escrow Agreement shall be effective unless consented
to by Owner.

"Event of Default" is defined in Section 5.01 of the Trust Indenture.

"Event of Loss" means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect
to such property, for any reason whatsoever:

OWNED AIRCRAFT INDENTURE 6
539
(a) the destruction of such property, damage to
such property beyond economic repair or rendition of such property permanently
unfit for normal use by Owner;

(b) the actual or constructive total loss of such
property or any damage to such property, or requisition of title or use of such
property, which results in an insurance settlement with respect to such
property on the basis of a total loss or constructive or compromised total
loss;

(d) any seizure, condemnation, confiscation,
taking or requisition (including loss of title) of such property by any
Government Entity or purported Government Entity (other than a requisition of
use by a Permitted Government Entity) for a period exceeding 180 consecutive
days or, in the case of a requisition of title, the requisition of title shall
not have been reversed within 90 days from the date of such requisition of
title; by any U.S. Government Entity;

(e) as a result of any law, rule, regulation,
order or other action by the Aviation Authority or by any Government Entity of
the government of registry of the Aircraft or by any Government Entity
otherwise having jurisdiction over the operation or use of the Aircraft, the
use of such property in the normal course of Owner's business of passenger air
transportation is prohibited for a period of 180 consecutive days unless Owner,
prior to the expiration of such 180-day period, shall have undertaken and shall
be diligently carrying forward such steps as may be necessary or desirable to
permit the normal use of such property by Owner, 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 such prohibition has been
applicable to Owner's entire U.S. fleet of such property and Owner, prior to
the expiration of such two-year period, shall have conformed at least one unit
of such property 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 such property in so conforming such
property, steps which are necessary or desirable to permit the normal use of
the Aircraft by Owner, but in any event if such use shall have been prohibited
for a period of three years.

"FAA" means the Federal Aviation Administration of the United States
or any Government Entity succeeding to the functions of such Federal Aviation
Administration.

"FAA ▇▇▇▇ of Sale" means a ▇▇▇▇ of sale for the Aircraft on AC Form
8050-2 (or such other form as may be approved by the FAA) delivered to Owner on
the Closing Date by Airframe Manufacturer.

OWNED AIRCRAFT INDENTURE 7
540
"FAA Filed Documents" means the Trust Indenture, the Trust Indenture
Supplement, the FAA ▇▇▇▇ of Sale and an application for registration of the
Aircraft with the FAA in the name of Owner.

"FAA Regulations" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.

"Financing Statements" means, collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements (a) covering the Collateral, by Owner,
as debtor, showing Mortgagee as secured party, for filing in Texas and each
other jurisdiction that, in the opinion of Mortgagee, is necessary to perfect
its Lien on the Collateral.

"GAAP" means generally accepted accounting principles as set forth in
the statements of financial accounting standards issued by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants, as such principles may at any time or from time to time be varied
by any applicable financial accounting rules or regulations issued by the SEC
and, with respect to any person, shall mean such principles applied on a basis
consistent with prior periods except as may be disclosed in such person's
financial statements.

"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

"Indemnitee" means (i) WTC and Mortgagee, (ii) each separate or
additional trustee appointed pursuant to the Trust Indenture, (iii) the
Subordination Agent, the Paying Agent and the Escrow Agent, (iv) each Liquidity
Provider, (v) the Pass Through Trustees, (vi) each Affiliate of the persons
described in clauses (i) and (ii), (vii) each Affiliate of the persons
described in clauses (iii), (iv) and (v), (viii) the respective directors,
officers, employees, agents and servants of each of the persons described in
clauses (i), (ii) and (vi), (ix) the respective directors, officers, employees,
agents and servants of each of the persons described in clauses (iii), (iv),
(v) and (vii), (x) the successors and permitted assigns of the persons
described in clauses (i), (ii) and (viii), and (xi) the successors and
permitted assigns of the persons described in clauses (iii), (iv), (v) and
(ix). If any Indemnitee is Airframe Manufacturer or Engine Manufacturer or any
subcontractor or supplier of either thereof, such Person shall be an Indemnitee
only in its capacity as Note Holder.

"Indenture Agreements" means the Purchase Agreement and the Bills of
Sale, to the extent included in Granting Clause (2) of the Trust Indenture, and
any other contract, agreement or instrument from time to time assigned or
pledged under the Trust Indenture.

"Indenture Default" means any condition, circumstance, act or event
that, with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.

OWNED AIRCRAFT INDENTURE 8
541
"Indenture Event of Default" means any one or more of the conditions,
circumstances, acts or events set forth in Section 5.01 of the Trust Indenture.

"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Pass Through Trustees, the Liquidity Providers and the Subordination
Agent, dated as of the Issuance Date, provided that, for purposes of any
obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, such Intercreditor Agreement shall be effective
unless consented to by Owner.

"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.

"Issuance Date" means March 21, 1997.

"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.

"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease or security interest affecting the title to or any interest in property.

"Liquidity Facilities" means the eight Revolving Credit Agreements
(consisting of a separate Revolving Credit Agreement with each Liquidity
Provider with respect to each Pass Through Trust) between the Subordination
Agent, as borrower, and a Liquidity Provider, each dated as of the Issuance
Date, provided that, for purposes of any obligation of Owner, no amendment,
modification or supplement to, or substitution or replacement of, any such
Liquidity Facility shall be effective unless consented to by Owner.

"Majority in Interest of Note Holders" means as of a particular date
of determination, the holders of a majority in aggregate unpaid Original Amount
of all Equipment Notes outstanding as of such date (excluding any Equipment
Notes held by Owner or any of its Affiliates (unless all Equipment Notes then
outstanding shall be held by Owner or any Affiliate of Owner); provided that
for the purposes of directing any action or casting any vote or giving any
consent, waiver or instruction hereunder, any Note Holder of an Equipment Note
or Equipment Notes may allocate, in such Note Holder's sole discretion, any
fractional portion of

OWNED AIRCRAFT INDENTURE 9
542
the principal amount of such Equipment Note or Equipment Notes in favor of or
in opposition to any such action, vote, consent, waiver or instruction.

"Make-Whole Amount" means, with respect to any Equipment Note, an
amount (as determined by an independent investment banker of national standing)
equal to the excess, if any, of (a) the present value of the remaining
scheduled payments of principal and interest to maturity of such Equipment Note
computed by discounting such payments on a semiannual basis on each Payment
Date (assuming a 360-day year of twelve 30-day months) using a discount rate
equal to the Treasury Yield over (b) the outstanding principal amount of such
Equipment Note plus accrued interest to the date of determination. For
purposes of determining the Make-Whole Amount, "Treasury Yield" means, at the
date of determination with respect to any Equipment Note, the interest rate
(expressed as a decimal and, in the case of United States Treasury bills,
converted to a bond equivalent yield) determined to be the per annum rate equal
to the semi-annual yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Equipment Note and trading in the
public securities markets either as determined by interpolation between the
most recent weekly average yield to maturity for two series of United States
Treasury securities, trading in the public securities markets, (A) one maturing
as close as possible to, but earlier than, the Average Life Date of such
Equipment Note and (B) the other maturing as close as possible to, but later
than, the Average Life Date of such Equipment Note, in each case as published
in the most recent H.15(519) or, if a weekly average yield to maturity for
United States Treasury securities maturing on the Average Life Date of such
Equipment Note is reported on the most recent H.15(519), such weekly average
yield to maturity as published in such H.15(519). "H.15(519)" means the weekly
statistical release designated as such, or any successor publication, published
by the Board of Governors of the Federal Reserve System. The date of
determination of a Make- Whole Amount shall be the third Business Day prior to
the applicable payment or redemption date and the "most recent H.15(519)" means
the H.15(519) published prior to the close of business on the third Business
Day prior to the applicable payment or redemption date.

"Minimum Liability Insurance Amount" is defined in Schedule 3 to the
Participation Agreement.

"Mortgaged Property" is defined in Section 3.03 of the Trust
Indenture.

"Mortgagee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as mortgagee under the
Trust Indenture.

"Net Worth" means, for any person, the excess of its total assets over
its total liabilities.

OWNED AIRCRAFT INDENTURE 10
543
"Non-U.S. Person" means any Person other than a United States person,
as defined in Section 7701(a)(30) of the Code.

"Note Holder" means at any time each registered holder of one or more
Equipment Notes.

"Officer's Certificate" means, in respect of any party to the
Participation Agreement, a certificate signed by the Chairman, the President,
any Vice President (including those with varying ranks such as Executive,
Senior, Assistant or Staff Vice President), the Treasurer or the Secretary of
such party.

"Operative Agreements" means, collectively, the Participation
Agreement, the Trust Indenture, the initial Trust Indenture Supplement, the
Bills of Sale, and the Equipment Notes.

"Operative Indentures" means each of the indentures under which notes
have been issued and purchased by the Pass Through Trustees pursuant to the
Note Purchase Agreement.

"Owner Person" means Owner, any lessee, assignee, successor or other
user or person in possession of the Aircraft, Airframe or an Engine with or
without color of right, or any Affiliate of any of the foregoing (excluding any
Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any
person using or claiming any rights with respect to the Aircraft, Airframe or
an Engine directly by or through any of the persons in this parenthetical).

"Participation Agreement" means the Participation Agreement _______
dated as of ________________ among Owner, the Applicable Pass Through Trustees,
the Subordination Agent and Mortgagee.

"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than (a) Engines or engines, and (b) any Removable Part leased by
Owner from a third party or subject to a security interest granted to a third
party), that may from time to time be installed or incorporated in or attached
or appurtenant to the Airframe or any Engine.

OWNED AIRCRAFT INDENTURE 11
544
Liquidity Facilities, provided that no amendment, modification or supplement
to, or substitution or replacement of, any such Fee Letter shall be effective
for purposes of any obligation of Owner, unless consented to by Owner.

"Pass Through Certificates" means the pass through certificates issued
by the Pass Through Trusts (and any other pass through certificates for which
such pass through certificates may be exchanged).

"Pass Through Trust" means each of the four separate pass through
trusts created under the Pass Through Trust Agreements.

"Pass Through Trust Agreement" means each of the four separate pass
through trust agreements dated as of the Issuance Date by and between the Owner
and a Pass Through Trustee.

"Pass Through Trustee" means Wilmington Trust Company, a Delaware
banking corporation, in its capacity as trustee under each Pass Through Trust
Agreement.

"Paying Agent" means Wilmington Trust Company, as paying agent under
each of the Escrow Agreements.

"Payment Date" means each April 1 and October 1, commencing on
_________.

"Payment Due Rate" means, with respect to (i) any payment made to a
Note Holder under any Series of Equipment Notes, the lesser of (a) the Debt
Rate applicable to such Series plus 2% and (b) the maximum rated permitted by
applicable law and (ii) any other payment made under any Operative Agreement to
any other Person, 9.45% per annum (computed on the basis of a year of 360 days
comprised of twelve 30-day months).

"Permitted Country" means any country listed on Schedule 4 to the
Participation Agreement.

OWNED AIRCRAFT INDENTURE 12
545
"Permitted Government Entity" means (i) the U.S. Government or (ii)
any Government Entity if the Aircraft is then registered under the laws of the
country of such Government Entity.

"Permitted Lien" means (a) the rights of Mortgagee under the Operative
Agreements, or of any Permitted Lessee under any Permitted Lease; (b) Liens
attributable to Mortgagee (both in its capacity as trustee under the Trust
Indenture and in its individual capacity); (c) the rights of others under
agreements or arrangements to the extent expressly permitted by the terms of
Section 4.02(b) or 4.04 of the Trust Indenture; (d) Liens of Taxes of Owner
(and its U.S. federal tax law consolidated group), or Liens for Taxes of any
Tax Indemnitee (and its U.S. federal tax law consolidated group) for which
Owner is obligated to indemnify such Tax Indemnitee under any of the Operative
Agreements, in any such case either not yet due or being contested in good
faith by appropriate proceedings so long as such Liens and such proceedings do
not involve any material risk of the sale, forfeiture or loss of the Aircraft,
the Airframe, or any Engine or the interest of Mortgagee therein or impair the
Lien of the Trust Indenture; (e) materialmen's, mechanics', workers',
repairers', employees' or other like Liens arising in the ordinary course of
business for amounts the payment of which is either not yet delinquent for more
than 60 days or is being contested in good faith by appropriate proceedings, so
long as such Liens and such proceedings do not involve any material risk of the
sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or the
interest of Mortgagee therein or impair the Lien of the Trust Indenture; (f)
Liens arising out of any judgment or award against Owner (or any Permitted
Lessee), so long as such judgment shall, within 60 days after the entry
thereof, have been discharged or vacated, or execution thereof stayed pending
appeal or shall have been discharged, vacated or reversed within 60 days after
the expiration of such stay, and so long as during any such 60 day period there
is not, or any such judgment or award does not involve, any material risk of
the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or
the interest of Mortgagee therein or impair the Lien of the Trust Indenture;
(g) any other Lien with respect to which Owner (or any Permitted Lessee) shall
have provided a bond, cash collateral or other security adequate in the
reasonable opinion of Mortgagee.

"Permitted Lease" means a lease permitted under Section 4.02(b) of the
Trust Indenture.

"Permitted Lessee" means the lessee under a Permitted Lease.

"Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA, or any plan within the meaning of Section 4975(e)(1) of the
Code.

OWNED AIRCRAFT INDENTURE 13
546
"Purchase Agreement" means the Purchase Agreement No. ____, dated
________________, between Airframe Manufacturer and Owner (including all
exhibits thereto, together with all letter agreements entered into that by
their terms constitute part of such Purchase Agreement), to the extent included
in the Granting Clause (2) of the Trust Indenture.

"QIB" is defined in Section 2.08 of the Trust Indenture.

"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated the Issuance Date by and among Owner and certain initial
purchasers of the Pass Through Certificates named therein, providing for, among
other things, the exchange offer with respect to such Pass Through Certificates
to be registered under the Securities Act or the shelf registration of such
Pass Through Certificates for a period specified therein.

"Removable Part" is defined in Section 4.04(d) of the Trust Indenture.

"Replacement Airframe" means any airframe substituted for the Airframe
pursuant to Article IV of the Trust Indenture.

"Replacement Engine" means an engine substituted for an Engine
pursuant to Article IV of the Trust Indenture.

"SEC" means the Securities and Exchange Commission of the United
States, or any Government Entity succeeding to the functions of such Securities
and Exchange Commission.

"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor or analogous section of the federal bankruptcy law in effect from
time to time.

"Secured Obligations" is defined in Section 2.06 of the Trust
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

"Security" means a "security" as defined in Section 2(l) of the
Securities Act.

"Senior Holder" is defined in Section 2.13(c) of the Trust Indenture.

"Series" means any of Series A, Series B or Series C.

OWNED AIRCRAFT INDENTURE 14
547
"Series C" or "Series C Equipment Notes" means Equipment Notes issued
under the Trust Indenture and designated as "Series C" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series C."

"Similar Aircraft" means a Boeing Model _______ aircraft.

"Special Default" means (i) the failure by Owner to pay any amount of
principal of or interest on any Equipment Note when due or (ii) the occurrence
of any Default or Event of Default referred to in Section 5.01(v), (vi) or
(vii).

"Subordination Agent" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement, or any successor thereto.

"Tax Indemnitee" means (a) WTC and Mortgagee, (b) each separate or
additional trustee appointed pursuant to the Trust Indenture, (c) each Note
Holder and (d) the respective successors, assigns, agents and servants of the
foregoing.

"Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.

"Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.

"Transaction Expenses" means all costs and expenses incurred by
Mortgagee in connection with (a) the preparation, execution and delivery of the
Operative Agreements and the recording or filing of any documents, certificates
or instruments in accordance with any Operative Agreement, including, without
limitation, the FAA Filed Documents and the Financing Statements, (b) the
initial fee of Mortgagee under the Trust Indenture and (c) the reasonable fees
and disbursements of counsel for each Mortgagee and special counsel in Oklahoma
City, Oklahoma, in each case, in connection with the Closing.

"Transactions" means the transactions contemplated by the
Participation Agreement.

"Transfer" means the transfer, sale, assignment or other conveyance of
all or any interest in any property, right or interest.

"Transferee" means a person to which any Note Holder purports or
intends to Transfer any or all of its right, title or interest in the Equipment
Note, as described in Section 9 of the Participation Agreement..

OWNED AIRCRAFT INDENTURE 15
548
"Trust Indenture" means the Trust Indenture and Mortgage __________,
dated as of the date of the Participation Agreement between Owner and
Mortgagee.

"Trust Indenture Supplement" means a Trust Indenture and Mortgage
Supplement, substantially in the form of Exhibit A to the Trust Indenture, with
appropriate modifications to reflect the purpose for which it is being used.

"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

"United States" or "U.S." means the United States of America; provided
that for geographic purposes, "United States" means, in aggregate, the 50
states and the District of Columbia of the United States of America.

"U.S. Air Carrier" means any United States air carrier that is a
Citizen of the United States holding an air carrier operating certificate
issued by the Secretary of Transportation pursuant to chapter 447 of title 49
of the United States Code for aircraft capable of carrying 10 or more
individuals or 6000 pounds or more of cargo, and as to which there is in force
an air carrier operating certificate issued pursuant to Part 121 of the FAA
Regulations, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provisions therefor or in the
absence thereof.

"U.S. Person" means any Person described in Section 7701 (a)(30) of
the Code.

"Wet Lease" means any arrangement whereby Owner agrees to furnish the
Aircraft, Airframe or any Engine to a third party pursuant to which the
Aircraft, Airframe or Engine shall at all times be in the operational control
of Owner or a Permitted Lessee, provided that Owner's obligations under the
Trust Indenture shall continue in full force and effect notwithstanding any
such arrangement.

"WTC" means Wilmington Trust Company, a Delaware banking corporation,
not in its capacity as Mortgagee under the Trust Indenture, but in its
individual capacity.

OWNED AIRCRAFT INDENTURE 16
549
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE

TRUST INDENTURE AND MORTGAGE SUPPLEMENT

This TRUST INDENTURE AND MORTGAGE SUPPLEMENT NO. 1, dated
______________ ___, ____ (herein called this "Trust Indenture Supplement") of
CONTINENTAL AIRLINES, INC., as Owner (the "Owner").

WITNESSETH:

WHEREAS, the Trust Indenture and Mortgage, dated as of ______________
__, 199_ (as amended and supplemented to the date hereof, the "Trust
Indenture") between the Owner and Wilmington Trust Company, as Mortgagee (the
"Mortgagee"), provides for the execution and delivery of a supplement thereto
substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Mortgagee; and

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

NOW, THEREFORE, this Trust Indenture Supplement WITNESSETH that the
Owner hereby confirms that the Lien of the Trust Indenture on the Collateral
covers all of Owners right, title and interest in and to the following
described property:

AIRFRAME

One airframe identified as follows:

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

The Boeing Company

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

AIRCRAFT ENGINES

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

OWNED AIRCRAFT INDENTURE
550

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

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

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

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

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

AND, FURTHER, the Owner hereby acknowledges that the Aircraft referred
to in this Trust Indenture Supplement has been delivered to the Owner and is
included in the property of the Owner subject to the pledge and mortgage
thereof under the Trust Indenture.

* * *

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

CONTINENTAL AIRLINES, INC.

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

OWNED AIRCRAFT INDENTURE 2
551
SCHEDULE I

ORIGINAL AMOUNT INTEREST RATE
--------------- -------------

Series A:

Series B:

Series C:

Trust Indenture and Mortgage

Equipment Note Amortization

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

OWNED AIRCRAFT INDENTURE
552

EXHIBIT D-1 to
Note Purchase Agreement
-----------------------

FORM OF SPECIAL PARTICIPATION AGREEMENT

553

CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION
SET FORTH IN SECTION 8 OF THIS AGREEMENT
______________________________________________________________

PARTICIPATION AGREEMENT ___

Dated as of _____________

Among

CONTINENTAL AIRLINES, INC.,

Lessee,

______________________

Owner Participant,

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

Owner Trustee

and

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

Mortgagee and Loan Participant

__________________________

One Boeing Model ________ Aircraft

Bearing Manufacturer's Serial No. _____
______________________________________________________________

PARTICIPATION AGREEMENT SPECIAL
554

CONTENTS

SECTION 1. DEFINITIONS AND CONSTRUCTION ...................................... 3

SECTION 2. PARTICIPATION IN LESSOR'S COST;
ISSUANCE OF EQUIPMENT NOTES; TERMINATION
OF OBLIGATION TO PARTICIPATE ...................................... 3
2.1 Participation in Lessor's Cost .................................... 3
2.2 Nature of Obligations of Participants ............................. 4
2.3 Termination of Obligation to Participate .......................... 4

SECTION 3. COMMITMENT TO LEASE AIRCRAFT ...................................... 4

SECTION 4. PROCEDURE FOR PARTICIPATION IN PAYMENT
OF LESSOR'S COST; POSTPONEMENT OF
SCHEDULED DELIVERY DATE............................................ 4
4.1 Notices of Scheduled Delivery Date ................................ 4
4.2 Payment of Lessor's Cost .......................................... 5
4.3 Postponement of Scheduled Delivery Date ........................... 6
4.3.1 Postponement .............................................. 6
4.3.2 Return of Funds ........................................... 6
4.4 Closing ........................................................... 6

SECTION 5. CONDITIONS PRECEDENT .............................................. 7
5.1 Conditions Precedent to Obligations of Participants................ 7
5.1.1 Notice .................................................... 7
5.1.2 Delivery of Documents ..................................... 7
5.1.3 Other Commitments ......................................... 12
5.1.4 Violation of Law .......................................... 12
5.1.5 Tax Law Change ............................................ 12
5.1.6 Representations, Warranties and Covenants.................. 12
5.1.7 No Default ................................................ 13
5.1.8 No Event of Loss .......................................... 13
5.1.9 Title ..................................................... 13
5.1.10 Certification ............................................. 13
5.1.11 Section 1110 .............................................. 14
5.1.12 Filing .................................................... 14
5.1.13 No Proceedings ............................................ 14
5.1.14 Governmental Action ....................................... 14
5.1.15 Note Purchase Agreement ................................... 14
5.1.16 Perfected Security Interest ............................... 15
5.2 Conditions Precedent to Obligations of Owner Trustee............... 15

PARTICIPATION AGREEMENT SPECIAL PAGE i
555

5.2.1 Notice .................................................... 15
5.2.2 Documents ................................................. 15
5.2.3 Other Conditions Precedent ................................ 15
5.3 Conditions Precedent to Obligations of Mortgagee .................. 15
5.3.1 Notice .................................................... 16
5.3.2 Documents ................................................. 16
5.3.3 Other Conditions Precedent ................................ 16
5.4 Conditions Precedent to Obligations of Lessee...................... 16
5.4.1 Documents ................................................. 16
5.4.2 Sales Tax ................................................. 16
5.4.3 Other Conditions Precedent ................................ 17
5.4.4 Tax Law Change ............................................ 17
5.5 Post-Registration Opinion ......................................... 17

SECTION 6. REPRESENTATIONS AND WARRANTIES .................................... 17
6.1 Lessee's Representations and Warranties ........................... 17
6.1.1 Organization; Qualification ............................... 18
6.1.2 Corporate Authorization ................................... 18
6.1.3 No Violation .............................................. 18
6.1.4 Approvals ................................................. 18
6.1.5 Valid and Binding Agreements .............................. 19
6.1.6 Litigation ................................................ 19
6.1.7 Financial Condition ....................................... 20
6.1.8 Registration and Recordation .............................. 20
6.1.9 Chief Executive Office .................................... 20
6.1.10 No Default ................................................ 21
6.1.11 No Event of Loss .......................................... 21
6.1.12 Compliance With Laws ...................................... 21
6.1.13 Securities Laws ........................................... 21
6.1.14 All Disclosures Made ...................................... 22
6.1.15 Broker's Fees ............................................. 22
6.1.16 Section 1110 .............................................. 22
6.2 Owner Participant's Representations and Warranties ................ 22
6.2.1 Organization, Etc. ........................................ 22
6.2.2 Corporate Authorization ................................... 23
6.2.3 No Violation .............................................. 23
6.2.4 Approvals ................................................. 23
6.2.5 Valid and Binding Agreements .............................. 24
6.2.6 Citizenship ............................................... 24
6.2.7 No Liens .................................................. 24
6.2.8 Investment by Owner Participant ........................... 24
6.2.9 ERISA ..................................................... 24

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556

6.2.10 Litigation ................................................ 25
6.2.11 Securities Laws ........................................... 25
6.2.12 Broker's Fees ............................................. 25
6.3 First Security's Representations and Warranties ................... 25
6.3.1 Organization, Etc. ........................................ 25
6.3.2 Corporate Authorization ................................... 25
6.3.3 No Violation .............................................. 26
6.3.4 Approvals ................................................. 26
6.3.5 Valid and Binding Agreements .............................. 27
6.3.6 Citizenship ............................................... 27
6.3.7 Chief Executive Office .................................... 27
6.3.8 Title ..................................................... 27
6.3.9 No Liens; Financing Statements ............................ 27
6.3.10 Litigation ................................................ 28
6.3.11 Securities Laws ........................................... 28
6.3.12 Expenses and Taxes ........................................ 28
6.4 WTC's Representations and Warranties .............................. 28
6.4.1 Organization, Etc. ........................................ 29
6.4.2 Corporate Authorization ................................... 29
6.4.3 No Violation .............................................. 29
6.4.4 Approvals ................................................. 30
6.4.5 Valid and Binding Agreements .............................. 30
6.4.6 Citizenship ............................................... 31
6.4.7 No Liens .................................................. 31
6.4.8 Litigation ................................................ 31
6.4.9 Securities Laws ........................................... 31
6.4.10 Investment ................................................ 31
6.4.11 Taxes ..................................................... 32
6.4.12 Control ................................................... 32
6.4.13 Broker's Fees ............................................. 32

SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS ............................ 33
7.1 Covenants of Lessee ............................................... 33
7.1.1 Corporate Existence; Franchises ........................... 33
7.1.2 U.S. Air Carrier; Section 1110 ............................ 33
7.1.3 Notice of Change of Chief Executive Office................... 33
7.1.4 Certain Assurances ........................................ 34
7.1.5 Securities Laws ........................................... 35
7.2 Covenants of Owner Participant .................................... 35
7.2.1 Liens ..................................................... 35
7.2.2 Revocation of Trust Agreement ............................. 36
7.2.3 Change of Situs of Owner Trust ............................ 36
7.2.4 Compliance with Lease Provisions .......................... 37

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557

7.2.5 Securities Act ............................................ 38
7.2.6 Regarding the Owner Trustee ............................... 38
7.3 Covenants of First Security and Owner Trustee...................... 38
7.3.1 Liens ..................................................... 38
7.3.2 Other Business ............................................ 39
7.3.3 Notice of Change of Chief Executive Office................. 39
7.3.4 Securities Act ............................................ 39
7.3.5 Performance of Agreements ................................. 39
7.3.6 Release of Lien of Trust Indenture ........................ 39
7.3.7 Notices; Documents ........................................ 40
7.3.8 Filings ................................................... 40
7.4 Covenants of WTC .................................................. 40
7.4.1 Liens ..................................................... 40
7.4.2 Securities Act ............................................ 41
7.4.3 Performance of Agreements ................................. 41
7.4.4 Withholding Taxes ......................................... 41
7.5 Covenants of Note Holders ......................................... 41
7.5.1 Withholding Taxes ......................................... 42
7.5.2 Transfer; Compliance ...................................... 42
7.6 Agreements ........................................................ 43
7.6.1 Owner Trustee Is Owner for All Purposes.................... 43
7.6.2 Rights under the Lease .................................... 43
7.6.3 Commencement of Bankruptcy Proceedings..................... 43
7.6.4 Certain Bankruptcy Matters ................................ 44
7.6.5 Quiet Enjoyment; Sale by Owner
Trustee Binding............................................ 44
7.6.6 Effect of Lessee's Merger ................................. 45
7.6.7 Non-Recourse .............................................. 45
7.6.8 Other Documents; Amendment ................................ 46
7.6.9 Consents .................................................. 47
7.6.10 Insurance ................................................. 47
7.6.11 Extent of Interest of Note Holders ........................ 47
7.6.12 Foreign Registration ...................................... 47
7.6.13 Other Commercial Relations Unaffected ..................... 53
7.6.14 Interest in Certain Engines ............................... 53
7.6.15 Trust Agreement ........................................... 54
7.6.16 Release of Lien of Trust Indenture ........................ 54

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558

SECTION 8. CONFIDENTIALITY ................................................... 55

SECTION 9. INDEMNIFICATION AND EXPENSES ...................................... 56
9.1 General Indemnity ................................................. 56
9.1.1 Indemnity ................................................. 56
9.1.2 Exceptions ................................................ 57
9.1.3 Separate Agreement ........................................ 60
9.1.4 Notice .................................................... 61
9.1.5 Notice of Proceedings; Defense
of Claims; Limitations..................................... 61
9.1.6 Information................................................ 62
9.1.7 Effect of Other Indemnities;
Subrogation; Further Assurances............................ 63
9.1.8 Refunds.................................................... 63
9.2 Expenses .......................................................... 63
9.2.1 Invoices and Payment....................................... 63
9.2.2 Payment of Other Expenses.................................. 64
9.3 General Tax Indemnity ............................................. 64
9.3.1 General.................................................... 64
9.3.2 Certain Exceptions......................................... 65
9.3.3 Payment.................................................... 69
9.3.4 Contest.................................................... 71
9.3.5 Refund..................................................... 74
9.3.6 Tax Filing................................................. 74
9.3.7 Forms...................................................... 75
9.3.8 Non-Parties................................................ 75
9.3.9 Subrogation................................................ 75
9.3.10 Foreign Tax On Loan Payments............................... 76
9.4 Payments .......................................................... 76
9.5 Interest .......................................................... 76
9.6 Benefit of Indemnities ............................................ 77

SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS ............................... 77
10.1 Participants, Owner Trustee and Note Holders ...................... 77
10.1.1 Owner Participant.......................................... 77
10.1.2 Owner Trustee.............................................. 80
10.1.3 Note Holders............................................... 80
10.2 Effect of Transfer ................................................ 81

SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS ............................... 81
11.1 Refunding Generally ............................................... 81
11.1.1 Refunding Certificate...................................... 82
11.1.2 Financing Agreements....................................... 82
11.1.3 Lease Amendments........................................... 82

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559

11.1.4 Security Agreements........................................ 83
11.1.5 Make-Whole Amount.......................................... 83
11.1.6 Expenses................................................... 83
11.1.7 Return of Equipment Notes.................................. 83
11.2 Timing; Refunding Limit; Notice ................................... 83
11.3 Limitations on Obligation to Refund ............................... 84
11.4 All Equipment Notes ............................................... 84
11.5 Execution of Certain Documents .................................... 84
11.6 ERISA ............................................................. 85
11.7 Consent to Optional Redemptions ................................... 85

SECTION 12. LEASE FOR ALL PURPOSES; SECTION 1110 .............................. 85

SECTION 13. OWNER PARTICIPANT'S RIGHT TO RESTRUCTURE .......................... 86
13.1 General Right to Restructure ...................................... 86
13.2 Limitations on Restructuring Provisions;
Additional Terms................................................... 87
13.2.1 Lessee..................................................... 87
13.2.2 Loan Participant and Note Holders.......................... 87
13.3 Special Structure Transaction Expenses ............................ 88

SECTION 14. CHANGE OF CITIZENSHIP ............................................. 88
14.1 Generally ......................................................... 88
14.2 Owner Participant ................................................. 89
14.3 Owner Trustee ..................................................... 89
14.4 Mortgagee ......................................................... 89

SECTION 15. CONCERNING OWNER TRUSTEE .......................................... 90

SECTION 16. MISCELLANEOUS ..................................................... 90
16.1 Amendments ........................................................ 90
16.2 Severability ...................................................... 91
16.3 Survival .......................................................... 91
16.4 Reproduction of Documents ......................................... 91
16.5 Counterparts ...................................................... 92
16.6 No Waiver ......................................................... 92
16.7 Notices ........................................................... 92
16.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE .................. 93
16.9 Third-Party Beneficiary ........................................... 93
16.10 Entire Agreement .................................................. 94
16.11 Further Assurances ................................................ 94

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ANNEX, SCHEDULES AND EXHIBITS

ANNEX A - Definitions

SCHEDULE 1 - Accounts; Addresses
SCHEDULE 2 - Commitments
SCHEDULE 3 - Certain Terms

EXHIBIT A - Opinion of special counsel to Lessee
EXHIBIT B - Opinion of corporate counsel to Lessee
EXHIBIT C - Opinion of corporate counsel to Airframe Manufacturer

EXHIBIT D - Opinion of special counsel to Owner Trustee
EXHIBIT E - Opinion of special counsel to Mortgagee
EXHIBIT F - Opinion of special counsel to Owner Participant
EXHIBIT G - Opinion of corporate counsel to Owner Participant
EXHIBIT H - Opinion of special counsel to Loan Participant
EXHIBIT I - Opinion of special counsel in Oklahoma City, Oklahoma

PARTICIPATION AGREEMENT SPECIAL PAGE vii

561

PARTICIPATION AGREEMENT ___

PARTICIPATION AGREEMENT ___, dated as of ___________ (this "Agreement"),
among (a) CONTINENTAL AIRLINES, INC., a Delaware corporation ("Lessee"), (b)
_________________, a New York corporation ("Owner Participant"), (c) FIRST
SECURITY BANK NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as expressly provided herein, but solely as Owner
Trustee (this and all other capitalized terms used but not defined herein shall
have the respective meanings ascribed thereto in Section 1) (in its capacity as
Owner Trustee, "Owner Trustee" or "Lessor," and in its individual capacity,
"First Security"), (d) WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity, except as expressly provided
herein, but solely as Mortgagee (in its capacity as Mortgagee, "Mortgagee" and
in its individual capacity, "WTC"), (e) WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly provided herein, but solely as Pass
Through Trustee under each of the Applicable Pass Through Trust Agreements,
(each, an "Applicable Pass Through Trustee") and (f) WILMINGTON TRUST COMPANY,
not in its individual capacity, except as expressly provided herein, but solely
as Subordination Agent under the Intercreditor Agreement ("Subordination
Agent").

RECITALS

PARTICIPATION AGREEMENT SPECIAL PAGE 1

562

subject to the terms and conditions set forth in the Purchase Agreement and the
Purchase Agreement Assignment.

D. Pursuant to each of the Pass Through Trust Agreements, on the Issuance
Date the Pass Through Trusts were created and the Pass Through Certificates
were issued and sold.

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

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

PARTICIPATION AGREEMENT SPECIAL PAGE 2

563

SECTION 1. DEFINITIONS AND CONSTRUCTION

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

SECTION 2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT
NOTES; TERMINATION OF OBLIGATION TO PARTICIPATE

2.1 PARTICIPATION IN LESSOR'S COST

Subject to the terms and conditions of this Agreement, on the Delivery
Date, Owner Participant and each Applicable Pass Through Trustee shall
participate in the payment of Lessor's Cost as follows:

(a) Owner Participant shall participate in the payment of
Lessor's Cost for the Aircraft by making an equity investment in the
beneficial ownership of the Aircraft in the amount in Dollars equal
to Owner Participant's Percentage multiplied by Lessor's Cost,
provided that in no event shall Owner Participant be obligated to
make such investment in an amount in excess of the dollar amount set
forth for the Owner Participant in Schedule 2; and

(b) Each Applicable Pass Through Trustee shall make a
non-recourse secured loan to Owner Trustee to finance, in part, the
Owner Trustee's payment of Lessor's Cost in the amount in Dollars
equal to such Pass Through Trustee's PTT Percentage multiplied by
Lessor's Cost, such loan to be evidenced by one or more Equipment
Notes, dated the Delivery Date, issued to the Subordination Agent as
the registered holder on behalf of each such Applicable Pass Through
Trustee for the related Applicable Pass Through Trust by Owner
Trustee in accordance with this Agreement and the Trust Indenture,
in an aggregate principal amount equal to the Commitment of each
such Applicable Pass Through Trustee.

PARTICIPATION AGREEMENT SPECIAL PAGE 3

564

2.2 NATURE OF OBLIGATIONS OF PARTICIPANTS

The obligations hereunder of each Participant are several, and not joint,
and a Participant shall have no obligation to make available to Owner Trustee
any portion of any amount not paid hereunder by any other Participant. The
failure by any Participant to perform its obligations hereunder shall not
affect the obligations of Lessee toward any other Participant, except to the
extent provided in Section 5.4.

2.3 TERMINATION OF OBLIGATION TO PARTICIPATE

Notwithstanding any other provision of this Agreement, if the Closing does
not occur on or before the Commitment Termination Date, the Commitment of each
Participant and its obligation to participate in the payment of Lessor's Cost
shall expire and be of no further force and effect; provided, that the
liability of any Participant that has defaulted in the payment of its
Commitment shall not be released.

SECTION 3. COMMITMENT TO LEASE AIRCRAFT

SECTION 4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
POSTPONEMENT OF SCHEDULED DELIVERY DATE

4.1 NOTICES OF SCHEDULED DELIVERY DATE

Without limiting its obligations to the Loan Participant under Section
1(b) of the Note Purchase Agreement, Lessee agrees to give Participants, Owner
Trustee, and Mortgagee at least one Business Day's written notice of the
Scheduled Delivery Date, which notice shall set forth Lessor's Cost and the
amount of each Participant's Commitment. Each Participant agrees that making
available its respective Commitment shall constitute a waiver of such notice.
Owner Trustee and Mortgagee shall be deemed to have waived such notice if WTC
shall have received from each Participant funds in the full amount of its
respective Commitment.

PARTICIPATION AGREEMENT SPECIAL PAGE 4

565

4.2 PAYMENT OF LESSOR'S COST

(a) Each Participant agrees, subject to the terms and conditions of this
Agreement, to make the Dollar amount of its respective Commitment available, by
wire transfer of immediately available funds to WTC's account no. ▇▇▇-▇-▇▇▇▇▇▇
at The Chase Manhattan Bank (National Association), New York, New York ABA#
▇▇▇▇▇▇▇▇▇ (contact: Emma Budget, tel. (▇▇▇) ▇▇▇-▇▇▇▇), reference Continental
Lease ___, at or before 12:00 Noon, New York City time, on the Scheduled
Delivery Date. All such funds made available by each Participant to WTC shall,
until payment thereof to Airframe Manufacturer and Lessee as provided in
Section 4.2(b)(ii) or return thereof to the respective Participant as provided
in Section 4.3.2, be held by WTC in trust for the benefit of the respective
Participant, as the sole and exclusive property of the respective Participant
and not as part of the Trust Estate or the Trust Indenture Estate.

(i) purchase, take title to, and accept delivery of, the Aircraft;

(ii) in consideration of the transfer of title to the Aircraft to
Owner Trustee, direct WTC to pay, from the funds made available to WTC
hereunder by the Participants, all or a specified portion of such funds
either to (A) Airframe Manufacturer, which payments in the aggregate
shall be equal to Manufacturer's Purchase Price, by wire transfer of
immediately available funds to Airframe Manufacturer's account set forth
in Schedule 1 or (B) Lessee, which payments to Lessee in the aggregate
shall be equal to Lessor's Cost minus Manufacturer's Purchase Price, by
wire transfer of immediately available funds to Lessee's account set
forth in Schedule 1 or as otherwise directed by Lessee;

(iii) execute an application for registration of the Aircraft with
the FAA, the Lease and Lease Supplement No. 1, in each case with respect
to the Aircraft;

PARTICIPATION AGREEMENT SPECIAL PAGE 5

566

(iv) execute the Trust Indenture and the initial Trust Indenture
Supplement and issue the Equipment Notes to the Subordination Agent in
accordance with Section 2.1(b);

(v) lease the Aircraft to Lessee, pursuant to the Lease; and

(vi) take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative
Agreement.

4.3 POSTPONEMENT OF SCHEDULED DELIVERY DATE

4.3.1 POSTPONEMENT

If for any reason whatsoever the Closing is not consummated on the
Scheduled Delivery Date, Lessee may, subject to the provisions of 1(e) of the
Note Purchase Agreement, by telephonic notice, given by 5:00 p.m., New York
City time (such telephonic notice to be promptly confirmed in writing by
personal delivery or facsimile), on the Scheduled Delivery Date to each
Participant, Owner Trustee and Mortgagee, designate a Delayed Delivery Date, in
which case the Owner Participant will make its funds available pursuant to
Section 4.2(a), and each Loan Participant shall comply with its obligations
under Section 2.01 of each Applicable Pass Through Trust Agreement.

4.3.2 RETURN OF FUNDS

WTC shall promptly return to each Participant that makes funds available
to it in accordance with Section 4.2(a) such funds, together with interest or
income earned thereon, if the Closing fails to occur on the Scheduled Delivery
Date, provided that any funds made available by the Owner Participant or the
Loan Participants shall be returned on such Scheduled Delivery Date.

4.4 CLOSING

PARTICIPATION AGREEMENT SPECIAL PAGE 6

567

SECTION 5. CONDITIONS PRECEDENT

5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTICIPANTS

The obligation of each Participant to make the Dollar amount of its
respective Commitment available for payment as directed by the Owner Trustee on
the Delivery Date is subject to satisfaction or waiver by each such
Participant, on or prior to the Delivery Date, of the conditions precedent set
forth below in this Section 5.1; provided, that it shall not be a condition
precedent to the obligation of any Participant that any document be produced or
action taken that is to be produced or taken by such Participant or by a Person
within such Participant's control; provided, further, that Sections 5.1.2(iii),
(xv) and (xxiii)(H) shall not be conditions precedent to the obligation of Loan
Participant and Sections 5.1.15 shall not be conditions precedent to the
obligation of Owner Participant.

5.1.1 NOTICE

Such Participant shall have received the notice described in Section 4.1
or, in the case of a Delayed Delivery Date, 4.3, when and as required thereby,
or shall have waived such notice.

5.1.2 DELIVERY OF DOCUMENTS

(i) the Lease; provided, that only Mortgagee shall receive the sole
executed chattel paper original thereof;

(ii) Lease Supplement No. 1 in respect of the Aircraft; provided,
that only Mortgagee shall receive the sole executed chattel paper
original thereof;

(iii) the Tax Indemnity Agreement; provided, that only Owner
Participant and Lessee shall receive copies of the Tax Indemnity
Agreement;

(iv) the Trust Agreement;

PARTICIPATION AGREEMENT SPECIAL PAGE 7

568

(v) the Trust Indenture;

(vi) the initial Trust Indenture Supplement;

(vii) the Purchase Agreement Assignment;

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

(ix) the Equipment Notes dated the Delivery Date; provided, that
only the Subordination Agent shall receive the authenticated Equipment
Notes;

(x) an excerpted copy of the Purchase Agreement, to the extent
relating to Airframe Manufacturer's or Engine Manufacturer's respective
warranties or related obligations or any right in the Purchase Agreement
assigned to Owner Trustee pursuant to the Purchase Agreement Assignment;
provided, that only Owner Trustee and Mortgagee shall receive copies of
such agreements (copies of which may be inspected by Participants and
their respective special counsel on the Delivery Date, but after the
Delivery Date such copies shall be retained by Owner Trustee and
Mortgagee and may be inspected and reviewed by Owner Participant or Loan
Participant or their respective counsel if and only if there shall have
occurred and be continuing a Lease Default or Lease Event of Default);

(xi) the Bills of Sale;

(xii) an invoice from Airframe Manufacturer to Owner Trustee in
respect of the Aircraft (except for the BFE) specifying the amount of the
Manufacturer's Purchase Price and an invoice from Lessee specifying the
amount due to Lessee in respect of the Aircraft and the BFE, which
amounts, in the aggregate, shall equal Lessor's Cost of the Aircraft;

(xiii) an appointment of authorized representatives by Owner
Trustee, and an acceptance thereof by such representatives in each case,
dated the Delivery Date;

(xiv) the broker's report and insurance certificates in respect of
the Aircraft required by Section 11 of the Lease;

PARTICIPATION AGREEMENT SPECIAL PAGE 8

569

(xv) an appraisal or appraisals from an Appraiser, which appraisal
or appraisals shall be satisfactory in form and substance to Owner
Participant; provided, that only Owner Participant and Lessee shall
receive copies of such appraisal or appraisals;

(xvi) (A) a copy of the Certificate of Incorporation and By-Laws of
Lessee and resolutions of the board of directors of Lessee and/or the
executive committee thereof, in each case certified as of the Delivery
Date, by the Secretary or an Assistant Secretary of Lessee, duly
authorizing the execution, delivery and performance by Lessee of the
Lessee Operative Agreements required to be executed and delivered by
Lessee on or prior to the Delivery Date in accordance with the provisions
hereof and thereof; (B) an incumbency certificate of Lessee, Owner
Participant, First Security and WTC as to the person or persons
authorized to execute and deliver the relevant Operative Agreements on
behalf of such party; and (C) a copy of the Certificate of Incorporation
or Articles of Incorporation and By-Laws and general authorizing
resolutions of the boards of directors (or executive committees) or other
satisfactory evidence of authorization of Owner Participant, First
Security and WTC, certified as of the Delivery Date by the Secretary or
an Assistant or Attesting Secretary of Owner Participant, First Security
and WTC, respectively, which authorize the execution, delivery and
performance by Owner Participant, First Security and WTC, respectively,
of each of the Operative Agreements to which it is a party, together with
such other documents and evidence with respect to it as Lessee or any
Participant may reasonably request in order to establish the consummation
of the transactions contemplated by this Agreement and the taking of all
corporate proceedings in connection therewith;

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

(xviii) an Officer's Certificate of First Security, dated as of the
Delivery Date, stating that its representations and warranties, in its
individual capacity and as Owner

PARTICIPATION AGREEMENT SPECIAL PAGE 9

570

Trustee, set forth in this Agreement are true and correct as of the
Delivery Date (or, to the extent that any such representation and
warranty expressly relates to an earlier date, true and correct as of
such earlier date);

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

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

(xxi) an application for registration of the Aircraft with the FAA
in the name of Owner Trustee; provided, that only special counsel in
Oklahoma City, Oklahoma shall receive the sole executed copy thereof for
filing with the FAA;

(xxii) the Financing Statements;

(xxiii) the following opinions of counsel, in each case dated the
Delivery Date:

(A) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel
to Lessee, substantially in the form of Exhibit A;

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

(C) an opinion of ______________________________, corporate
counsel to Airframe Manufacturer, substantially in the form of
Exhibit C;

PARTICIPATION AGREEMENT SPECIAL PAGE 10

571

(D) an opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to
Owner Trustee, substantially in the form of Exhibit D;

(E) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel
to Mortgagee, substantially in the form of Exhibit E;

(F) an opinion of ______________, special counsel to Owner
Participant, substantially in the form of Exhibit F;

(G) an opinion of ______________, corporate counsel to the
Owner Participant;

(H) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel
for the Loan Participant, substantially in the form set forth in
Exhibit H;

(I) an opinion of ______________, special tax counsel to Owner
Participant, with respect to certain tax consequences of the
transactions contemplated hereby; provided, that only Owner
Participant shall receive such opinion; and

(J) an opinion of ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel in
Oklahoma City, Oklahoma, substantially in the form of Exhibit I;

(xxiv) a copy of a current, valid Standard Certificate of
Airworthiness for the Aircraft duly issued by the FAA;

(xxv) a letter of Lessee, certifying the documents Lessee has
provided pursuant to Section 6.1.6 and 6.1.7 and attaching any such
documents not otherwise furnished to Owner Participant; and

(xxvi) the Participants and their respective counsel shall have
received copies of such documents and papers as such Participants may
reasonably request, other than (A) in the case of Loan Participant,
copies of the Purchase Agreement, provided that special counsel for Loan
Participant may inspect the Purchase Agreement in connection with the
transactions contemplated hereby or as a basis for such counsel's closing
opinion, and (B) in the case of

PARTICIPATION AGREEMENT SPECIAL PAGE 11

572

parties other than Owner Participant and its special counsel, the Tax
Indemnity Agreement.

5.1.3 OTHER COMMITMENTS

Each other Participant shall have made available the Dollar amount of its
Commitment as directed by Owner Trustee in accordance with Section 4.

5.1.4 VIOLATION OF LAW

No circumstance or condition shall exist that makes it a violation of Law
for (a) Lessee, any Participant, Subordination Agent, Owner Trustee or
Mortgagee to execute, deliver and perform the Operative Agreements to which any
of them is a party or (b) any Participant to make the Dollar amount of its
Commitment available or, in the case of any Loan Participant, to acquire an
Equipment Note or to realize the benefits of the security afforded by the Trust
Indenture.

5.1.5 TAX LAW CHANGE

In respect of Owner Participant, no Adverse Change in Tax Law shall have
been enacted, promulgated or issued on or prior to the Delivery Date. Owner
Participant agrees to consider promptly, and to consult with Lessee concerning
any such Adverse Change in Tax Law and to advise Lessee and Loan Participant
promptly if Owner Participant determines that an Adverse Change in Tax Law
which has been enacted or promulgated or, if proposed, has a substantial
likelihood of becoming effective, would cause Owner Participant to elect not to
close with respect to the Aircraft. At any time on or before the Delivery Date,
Owner Participant may notify Lessee and Loan Participant that Owner Participant
elects not to close as a result of the enactment, promulgation or issuance of
any Adverse Change in Tax Law on or before the Delivery Date, specifying such
Adverse Change in Tax Law; and failure to give such notice on or before the
Delivery Date shall preclude Owner Participant from not closing with respect to
such Aircraft as a result of any Adverse Change in Tax Law.

5.1.6 REPRESENTATIONS, WARRANTIES AND COVENANTS

The representations and warranties of each other party to this Agreement
made, in each case, in this Agreement and in any other Operative Agreement to
which it is a party, shall be true

PARTICIPATION AGREEMENT SPECIAL PAGE 12

573

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

5.1.7 NO DEFAULT

5.1.8 NO EVENT OF LOSS

5.1.9 TITLE

5.1.10 CERTIFICATION

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

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574

5.1.11 SECTION 1110

5.1.12 FILING

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

5.1.13 NO PROCEEDINGS

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

5.1.14 GOVERNMENTAL ACTION

5.1.15 NOTE PURCHASE AGREEMENT

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575

5.1.16 PERFECTED SECURITY INTEREST

5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER TRUSTEE

5.2.1 NOTICE

Owner Trustee shall have received the notice described in Section 4.1 or,
in the case of a Delayed Delivery Date, 4.3, when and as required thereby, or
shall have waived such notice.

5.2.2 DOCUMENTS

Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Owner Trustee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Owner Trustee.

5.2.3 OTHER CONDITIONS PRECEDENT

Each of the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and
5.1.11 shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Owner Trustee.

5.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE

PARTICIPATION AGREEMENT SPECIAL PAGE 15

576

5.3.1 NOTICE

Mortgagee shall have received the notice described in Section 4.1 or, in
the case of a Delayed Delivery Date, 4.3, when and as required thereby, or
shall have waived such notice.

5.3.2 DOCUMENTS

5.3.3 OTHER CONDITIONS PRECEDENT

Each of the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7, and
5.1.11 shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Mortgagee.

5.4 CONDITIONS PRECEDENT TO OBLIGATIONS OF LESSEE

5.4.1 DOCUMENTS

5.4.2 SALES TAX

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577

5.4.3 OTHER CONDITIONS PRECEDENT

5.4.4 TAX LAW CHANGE

5.5 POST-REGISTRATION OPINION

SECTION 6. REPRESENTATIONS AND WARRANTIES

6.1 LESSEE'S REPRESENTATIONS AND WARRANTIES

Lessee represents and warrants to each Participant, Subordination Agent,
Owner Trustee and Mortgagee that:

PARTICIPATION AGREEMENT SPECIAL PAGE 17

578

6.1.1 ORGANIZATION; QUALIFICATION

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

6.1.2 CORPORATE AUTHORIZATION

6.1.3 NO VIOLATION

The execution and delivery by Lessee of the Lessee Operative Agreements,
the performance by Lessee of its obligations thereunder and the consummation by
Lessee on the Delivery Date of the transactions contemplated thereby, do not
and will not (a) violate or contravene any provision of the Certificate of
Incorporation or By-Laws of Lessee, (b) violate or contravene any Law
applicable to or binding on Lessee or (c) violate, contravene or constitute any
default under, or result in the creation of any Lien (other than as permitted
under the Lease) upon any property of Lessee or any of its subsidiaries under,
any indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, lease, loan or other material agreement, instrument or document to
which Lessee is a party or by which Lessee or any of its properties is or may
be bound or affected.

6.1.4 APPROVALS

The execution and delivery by Lessee of the Lessee Operative Agreements,
the performance by Lessee of its obligations

PARTICIPATION AGREEMENT SPECIAL PAGE 18

579

thereunder and the consummation by Lessee on the Delivery Date of the
transactions contemplated thereby do not and will not require the consent,
approval or authorization of, or the giving of notice to, or the registration
with, or the recording or filing of any documents with, or the taking of any
other action in respect of, (a) any trustee or other holder of any Debt of
Lessee and (b) any Government Entity, other than the filing of the FAA Filed
Documents and the Financing Statements (and continuation statements
periodically) and filings, recordings, notices or other ministerial actions
pursuant to any routine recording, contractual or regulatory requirements
applicable to it.

6.1.5 VALID AND BINDING AGREEMENTS

6.1.6 LITIGATION

Except as set forth in Lessee's most recent Annual Report on Form 10-K, as
amended, Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by
Lessee with the SEC on or prior to the Delivery Date (copies of which
(excluding exhibits), in each case, have been furnished to Owner Participant by
Lessee), no action, claim or proceeding is now pending or, to the Actual
Knowledge of Lessee, threatened, against Lessee, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of
any foreign government or any federal, state or local government or of any
agency or subdivision thereof, or before any arbitrator or panel of
arbitrators, which is reasonably likely to be determined adversely to Lessee
and if determined adversely to Lessee would result in a Material Adverse
Change.

PARTICIPATION AGREEMENT SPECIAL PAGE 19

580

6.1.7 FINANCIAL CONDITION

The audited consolidated balance sheet of Lessee with respect to Lessee's
most recent fiscal year included in Lessee's most recent Annual Report on Form
10-K, and the related consolidated statements of operations and cash flows for
the period then ended (copies of which have been furnished to Owner Participant
by Lessee) have been prepared in accordance with GAAP and fairly present in all
material respects the financial condition of Lessee and its consolidated
subsidiaries as of such date and the results of its operations and cash flows
for such period, and since the date of such balance sheet, there has been no
material adverse change in such financial condition or operations of Lessee,
except for matters disclosed in (a) the financial statements referred to above
or (b) any subsequent Quarterly Report on Form 10-Q or Current Report on Form
8-K filed by Lessee with the SEC on or prior to the date hereof (copies of
which (excluding exhibits) have been delivered to Owner Participant by Lessee).

6.1.8 REGISTRATION AND RECORDATION

Except for (a) the registration of the Aircraft with the FAA pursuant to
the Act in the name of Owner Trustee, (b) the filing for recordation (and
recordation) of the FAA Filed Documents, (c) the filing of the Financing
Statements (and continuation statements relating thereto at periodic
intervals), (d) the taking of possession and retention by Mortgagee of the
original counterparts of the Lease and Lease Supplement No. 1 and (e) the
affixation of the nameplates referred to in Section 7.1.3 of the Lease, no
further action, including any filing or recording of any document (including
any financing statement in respect thereof under Article 9 of the UCC) is
necessary or advisable in order to establish and perfect the right, title or
interest of Owner Trustee, and the Mortgagee's security interest, in the
Aircraft and the Lease, as against Lessee and any other Person, in each case,
in any applicable jurisdictions.

6.1.9 CHIEF EXECUTIVE OFFICE

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581

6.1.10 NO DEFAULT

No event which, if the Aircraft were subject to the Lease, constitutes a
Lease Default or Lease Event of Default has occurred and is continuing.

6.1.11 NO EVENT OF LOSS

6.1.12 COMPLIANCE WITH LAWS

(a) Lessee is not in default under, or in violation of, any Law applicable
to Lessee or to which Lessee is subject, the violation of which would give rise
to a Material Adverse Change to Lessee.

(b) Without limiting the generality of Section 6.1.12(a):

(i) Lessee is a Citizen of the United States and a U.S. Air Carrier;

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

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

6.1.13 SECURITIES LAWS

PARTICIPATION AGREEMENT SPECIAL PAGE 21

582

under the Trust Indenture, for sale to, or solicited any offer to acquire any
such interest or security from, or has sold any such interest or security to,
any person in violation of the Securities Act or applicable state securities
Laws.

6.1.14 ALL DISCLOSURES MADE

No Operative Agreement contains any untrue statement of a material fact by
Lessee and Lessee has not omitted to state any material fact necessary to make
the statements of fact of Lessee, in light of the circumstances under which
they were made, contained herein or therein not misleading. For purposes of
this Section 6.1.14, the term "Operative Agreements" shall not include the Tax
Indemnity Agreement.

6.1.15 BROKER'S FEES

No Person acting on behalf of Lessee is or will be entitled to any
broker's fee, commission or finder's fee in connection with the Transactions,
except for fees payable to Lessee's Advisor, if any.

6.1.16 SECTION 1110

Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee of
Owner Trustee under the Trust Indenture), is entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines as provided in the Lease in the event of
a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.

6.2 OWNER PARTICIPANT'S REPRESENTATIONS AND WARRANTIES

Owner Participant represents and warrants to Lessee, Loan Participant,
Subordination Agent, Owner Trustee and Mortgagee that:

6.2.1 ORGANIZATION, ETC.

Owner Participant is a corporation duly incorporated, validly existing and
in good standing under the Laws of the State of New York and has the corporate
power and authority to conduct the business in which it is currently engaged
and to own or hold under lease its properties and to enter into, and perform
its obligations under the Owner Participant Agreements and has a

PARTICIPATION AGREEMENT SPECIAL PAGE 22

583

tangible net worth (exclusive of good will) greater than $50,000,000.

6.2.2 CORPORATE AUTHORIZATION

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

6.2.3 NO VIOLATION

The execution and delivery by Owner Participant of the Owner Participant
Agreements, the performance by Owner Participant of its obligations thereunder
and the consummation by Owner Participant on the Delivery Date of the
transactions contemplated thereby, do not and will not (a) violate or
contravene any provision of the Certificate of Incorporation or By-Laws of
Owner Participant, (b) violate or contravene any Law applicable to or binding
on Owner Participant (it being understood that no representation or warranty is
made with respect to any Law to the extent that such Law relates to ERISA or
any Plan, other than as set forth in Section 6.2.9) or (c) violate, contravene
or constitute any default under, or result in the creation of any Lien (other
than as provided for or otherwise permitted in the Operative Agreements) upon
the Trust Estate under, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sales contract, lease, loan or other material agreement,
instrument or document to which Owner Participant is a party or by which Owner
Participant or any of its properties is or may be bound or affected.

6.2.4 APPROVALS

PARTICIPATION AGREEMENT SPECIAL PAGE 23

584

Documents and the Financing Statements and routine regulatory filings.

6.2.5 VALID AND BINDING AGREEMENTS

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

6.2.6 CITIZENSHIP

On the Delivery Date, Owner Participant is a Citizen of the United States.

6.2.7 NO LIENS

On the Delivery Date, there are no Lessor Liens attributable to Owner
Participant in respect of all or any part of the Trust Estate.

6.2.8 INVESTMENT BY OWNER PARTICIPANT

6.2.9 ERISA

No part of the funds to be used by Owner Participant to acquire or hold
its interests in the Trust Estate to be acquired by it under this Agreement
directly or indirectly constitutes assets of a Plan.

PARTICIPATION AGREEMENT SPECIAL PAGE 24

585

6.2.10 LITIGATION

There are no pending or, to the Actual Knowledge of Owner Participant,
threatened actions or proceedings against Owner Participant before any court,
administrative agency or tribunal which, if determined adversely to Owner
Participant, would materially adversely affect the ability of Owner Participant
to perform its obligations under the Owner Participant Agreements.

6.2.11 SECURITIES LAWS

Neither Owner Participant nor any person Owner Participant has authorized
to act on its behalf has directly or indirectly offered any beneficial interest
in or Security relating to the ownership of the Aircraft or any interest in the
Trust Estate, or any of the Equipment Notes or any other interest in or
Security under the Trust Indenture for sale to, or solicited any offer to
acquire any of the same from, any Person in violation of the Securities Act or
applicable state securities Laws.

6.2.12 BROKER'S FEES

No Person acting on behalf of Owner Participant is or will be entitled to
any broker's fee, commission or finder's fee in connection with the
Transactions.

6.3 FIRST SECURITY'S REPRESENTATIONS AND WARRANTIES

First Security represents and warrants to Lessee, Owner Participant, Loan
Participant, Subordination Agent and Mortgagee that:

6.3.1 ORGANIZATION, ETC.

6.3.2 CORPORATE AUTHORIZATION

First Security has taken, or caused to be taken, all necessary corporate
action (including, without limitation, the obtaining of any consent or approval
of stockholders required by

PARTICIPATION AGREEMENT SPECIAL PAGE 25

586

Law or by its Articles of Association or By-Laws) to authorize the execution
and delivery by First Security, in its individual capacity and as Owner
Trustee, of each of the Owner Trustee Agreements, and the performance of its
obligations thereunder.

6.3.3 NO VIOLATION

The execution and delivery by First Security, in its individual capacity
and as Owner Trustee of the Owner Trustee Agreements, the performance by First
Security, in its individual capacity and as Owner Trustee, of its obligations
thereunder and the consummation by First Security in its individual capacity
and as Owner Trustee on the Delivery Date of the transactions contemplated
thereby, do not and will not (a) violate or contravene any provision of the
Articles of Association or By-Laws of First Security, (b) violate or contravene
any Law applicable to or binding on Owner Trustee or First Security or (c)
violate, contravene or constitute any default under, or result in the creation
of any Lien (other than the lien of the Trust Indenture) upon any property of
First Security, in its individual capacity and as Owner Trustee, or any of its
subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which First Security, in its individual capacity and as Owner
Trustee, is a party or by which First Security, in its individual capacity and
as Owner Trustee, or any of its properties is or may be bound or affected.

6.3.4 APPROVALS

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587

6.3.5 VALID AND BINDING AGREEMENTS

6.3.6 CITIZENSHIP

On the Delivery Date, First Security is a Citizen of the United States.

6.3.7 CHIEF EXECUTIVE OFFICE

6.3.8 TITLE

6.3.9 NO LIENS; FINANCING STATEMENTS

PARTICIPATION AGREEMENT SPECIAL PAGE 27

588

6.3.10 LITIGATION

There are no pending or, to the Actual Knowledge of First Security,
threatened actions or proceedings against First Security or Owner Trustee
before any court, administrative agency or tribunal which, if determined
adversely to First Security, would materially adversely affect the ability of
First Security or Owner Trustee, to perform its obligations under the Owner
Trustee Agreements.

6.3.11 SECURITIES LAWS

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

6.3.12 EXPENSES AND TAXES

There are no Expenses or Taxes that may be imposed on or asserted against
the Trust, the Trust Estate or any part thereof or any interest therein, the
Trust Indenture Estate, Lessee, Owner Participant, any Applicable Pass Through
Trustee, Subordination Agent, Owner Trustee or Mortgagee (except as to Owner
Trustee, Taxes imposed on the fees payable to Owner Trustee) under the laws of
Utah in connection with the execution, delivery or performance of any Operative
Agreement by Owner Trustee or in connection with the issuance of the Equipment
Notes, which Expenses or Taxes would not have been imposed if Owner Trustee had
not (x) had its principal place of business in, (y) performed (in its
individual capacity or as Owner Trustee) any or all of its duties under the
Operative Agreements in or (z) engaged in any activities unrelated to the
transactions contemplated by the Operative Agreements in, the State of Utah.

6.4 WTC'S REPRESENTATIONS AND WARRANTIES

WTC represents and warrants (with respect to Section 6.4.10 solely in its
capacity as Subordination Agent) to Lessee, Owner Participant and Owner Trustee
that:

PARTICIPATION AGREEMENT SPECIAL PAGE 28

589

6.4.1 ORGANIZATION, ETC.

6.4.2 CORPORATE AUTHORIZATION

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

6.4.3 NO VIOLATION

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

PARTICIPATION AGREEMENT SPECIAL PAGE 29

590

party or by which WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, or any of their respective properties
is or may be bound or affected.

6.4.4 APPROVALS

6.4.5 VALID AND BINDING AGREEMENTS

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591

6.4.6 CITIZENSHIP

WTC is a Citizen of the United States.

6.4.7 NO LIENS

On the Delivery Date, there are no Lessor Liens attributable to WTC in
respect of all or any part of the Trust Estate or the Trust Indenture Estate.

6.4.8 LITIGATION

6.4.9 SECURITIES LAWS

6.4.10 INVESTMENT

PARTICIPATION AGREEMENT SPECIAL PAGE 31

592

6.4.11 TAXES

There are no Taxes payable by any Applicable Pass Through Trustee or WTC,
as the case may be, imposed by the State of Delaware or any political
subdivision or taxing authority thereof in connection with the execution,
delivery and performance by such Pass Through Trustee or WTC, as the case may
be, of this Agreement or any of the Pass Through Trustee Agreements (other than
franchise or other taxes based on or measured by any fees or compensation
received by any such Pass Through Trustee or WTC, as the case may be, for
services rendered in connection with the transactions contemplated by any of
the Pass Through Trust Agreements), and there are no Taxes payable by any
Applicable Pass Through Trustee or WTC, as the case may be, imposed by the
State of Delaware or any political subdivision thereof in connection with the
acquisition, possession or ownership by any such Pass Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured
by any fees or compensation received by any such Pass Through Trustee or WTC,
as the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be taxable as
corporations, but, rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code or as a partnership under
Subchapter K of the Code, such trusts will not be subject to any Taxes imposed
by the State of Delaware or any political subdivision thereof.

6.4.12 CONTROL

WTC is not an Affiliate of the Owner Participant or the Owner Trustee.

6.4.13 BROKER'S FEES

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593

SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS

7.1 COVENANTS OF LESSEE

Lessee covenants and agrees, at its own cost and expense, with Owner
Participant, Loan Participant, Owner Trustee and Mortgagee as follows:

7.1.1 CORPORATE EXISTENCE; FRANCHISES

Lessee shall at all times maintain its corporate existence, except as
permitted by Section 13.2 of the Lease, and shall not wind-up, liquidate or
dissolve or take any action, or fail to take any action, that would have the
effect of any of the foregoing. Lessee will do or cause to be done all things
necessary to preserve and keep in full force and effect its rights (charter and
statutory) and franchises, except that Lessee shall not be required to preserve
or keep in full force and effect any right or franchise if Lessee shall
reasonably determine that the preservation thereof is no longer necessary or
desirable in the conduct of its business and if the loss thereof does not (a)
adversely affect or diminish the rights of Participants under the Operative
Agreements or (b) materially and adversely affect Lessee's ability to observe
or perform its obligations, liabilities and agreements under the Lessee
Operative Agreements.

7.1.2 U.S. AIR CARRIER; SECTION 1110

Lessee shall at all times remain a U.S. Air Carrier and shall at all times
be otherwise certificated and registered to the extent necessary to entitle
Owner Trustee (and Mortgagee as assignee of Owner Trustee's rights under the
Lease) the rights afforded to lessors of aircraft equipment under Section 1110.

7.1.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

Lessee will give Owner Participant, Owner Trustee and Mortgagee timely
written notice (but in any event not later than three Business Days after its
occurrence) of any relocation of its chief executive office (as such term is
defined in Article 9 of the UCC) from its then present location and will
promptly take any action required by Section 7.1.4(c) as a result of such
relocation.

PARTICIPATION AGREEMENT SPECIAL PAGE 33

594

7.1.4 CERTAIN ASSURANCES

(a) Lessee shall duly execute, acknowledge and deliver, or shall cause to
be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as Owner Participant, Owner Trustee or
Mortgagee shall reasonably request in connection with its administration of, or
to carry out more effectually the purposes of, or to better assure and confirm
unto it the rights and benefits to be provided under, this Agreement and the
other Operative Agreements.

(b) Lessee shall promptly take such action with respect to the recording,
filing, re-recording and refiling of the Lease, the Trust Agreement and the
Trust Indenture and the respective supplements thereto, including, without
limitation, Lease Supplement No. 1 and the Trust Indenture Supplement, as shall
be necessary to establish, perfect and protect the interests and rights of
Owner Trustee in and to the Aircraft and under the Lease and the perfection and
priority of the Lien created by the Trust Indenture. Lessee shall furnish to
Owner Participant or Owner Trustee such information (other than with respect to
the citizenship of Owner Participant and Owner Trustee) in Lessee's possession
or otherwise reasonably available to Lessee as may be required to enable Owner
Participant or Owner Trustee to make application for registration of the
Aircraft under the Act (subject to Lessee's rights under Section 7.1.2 of the
Lease) and shall, without limiting the generality of Section 9, pay or cause to
be paid all out-of-pocket costs and expenses thereof (including, without
limitation, reasonable attorneys' fees and disbursements).

PARTICIPATION AGREEMENT SPECIAL PAGE 34

595

(d) If the Aircraft has been registered in a country other than the United
States pursuant to Section 7.1.2 of the Lease, Lessee will furnish to Owner
Trustee, Mortgagee and each Participant annually after such registration,
commencing with the calendar year after such registration is effected, an
opinion of special counsel reasonably satisfactory to the Owner Participant and
the Mortgagee, stating that, in the opinion of such counsel, either that (i)
such action has been taken with respect to the recording, filing, rerecording
and refiling of the Operative Agreements and any supplements and amendments
thereto as is necessary to establish, perfect and protect Owner Trustee's and
Mortgagee's respective right, title and interest in and to the Aircraft and the
Operative Agreements, reciting the details of such actions, or (ii) no such
action is necessary to maintain the perfection of such right, title and
interest.

7.1.5 SECURITIES LAWS

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

7.2 COVENANTS OF OWNER PARTICIPANT

Owner Participant covenants and agrees with Lessee, and, except with
respect to Section 7.2.4, Loan Participant, Subordination Agent, Owner Trustee
and Mortgagee as follows:

7.2.1 LIENS

Owner Participant (a) will not directly or indirectly create, incur,
assume or suffer to exist any Lessor Lien attributable to it on or with respect
to all or any part of the Trust Estate, the Trust Indenture Estate or the
Aircraft, (b) will, at its own cost and expense, promptly take such action as
may be necessary to discharge any Lessor Lien attributable to Owner Participant
on all or any part of the Trust Estate, the Trust Indenture Estate or the
Aircraft and (c) will make restitution to the Trust Estate for any actual
diminution of the

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assets of the Trust Estate resulting from such Lessor Liens attributable to or
caused by it.

7.2.2 REVOCATION OF TRUST AGREEMENT

(a) Owner Participant (i) will comply with the provisions of the Trust
Agreement applicable to it, the non-compliance with which would have a material
adverse effect on Lessee, any Note Holder or Mortgagee, (ii) will not terminate
or revoke the Trust Agreement or the trusts created thereunder prior to the
termination or expiration of the Term of the Lease, without the consent of
Lessee, or prior to the discharge of the Lien of the Trust Indenture, without
the consent of the Mortgagee and (iii) will not amend, modify or supplement the
Trust Agreement, or waive any of the provisions thereof, prior to the
termination or expiration of the Term of the Lease if such amendment,
modification, supplement or waiver would have a material adverse effect on
Lessee, without the consent of Lessee, or prior to the discharge of the Lien of
the Trust Indenture if such amendment, modification, supplement or waiver would
have a material adverse effect on Mortgagee or any Note Holder, without the
consent of Mortgagee.

7.2.3 CHANGE OF SITUS OF OWNER TRUST

If, at any time, any Tax Indemnitee or the Trust Estate becomes subject to
any Taxes for which it is indemnified pursuant to Section 9.3 of this Agreement
and if, as a consequence thereof, Lessee should request that the situs of the
Trust be moved to another state in the United States from the state in which it
is then located, the situs of the Trust may be moved with the written consent
of Owner Participant (which consent shall not be unreasonably withheld) and
Owner Participant will take whatever action may be reasonably necessary to
accomplish such removal; provided, that, in any event, (a) Lessee shall provide
such additional tax indemnification as Owner Participant and the Note Holders
may reasonably request to cover any additional unindemnified Taxes or loss of
Tax benefits described in the assumptions in the Tax Indemnity Agreement
resulting from such change in the situs of the Trust, (b) the rights and

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obligations under the Operative Agreements of Owner Participant, the Note
Holders, Pass Through Trustees and Mortgagee shall not be adversely affected as
a result of the taking of such action, (c) the Lien of the Trust Indenture on
the Trust Indenture Estate shall not be adversely affected by such action, and
Lessee and Owner Trustee shall execute and deliver such documents as may
reasonably be requested by Mortgagee to protect and maintain the perfection and
priority of such Lien, (d) Owner Participant, Mortgagee and Pass Through
Trustee shall have received an opinion or opinions of counsel (which counsel is
reasonably satisfactory to Owner Participant , Mortgagee and Pass Through
Trustees) in scope, form and substance reasonably satisfactory to Owner
Participant, Mortgagee and Pass Through Trustees to the effect that (i) the
Trust, as thus removed, shall remain a validly established trust, (ii) any
amendments to the Trust Agreement necessitated by such removal shall have been
duly authorized, executed and delivered by the parties thereto and shall
constitute the valid and binding obligations of such parties, enforceable in
accordance with their terms, (iii) covering such other matters as Owner
Participant, Mortgagee and Pass Through Trustees may reasonably request, (e) if
such removal involves the replacement of Owner Trustee, then Owner Participant,
Mortgagee and Pass Through Trustees shall have received an opinion of counsel
to such successor Owner Trustee in form and substance reasonably satisfactory
to Owner Participant, Mortgagee and Pass Through Trustees covering the matters
described in the opinion delivered pursuant to Section 5.1.2(xxiii)(D) and (f)
Lessee shall indemnify and hold harmless Owner Participant, Note Holders, and
First Security, in its individual capacity and as Owner Trustee and Pass
Through Trustees, on a net after-tax basis against any and all reasonable
out-of-pocket costs and expenses including attorneys' fees and disbursements,
fees and expenses of any new owner trustee, registration, recording or filing
fees and taxes incurred by Owner Participant, Note Holders, Owner Trustee and
Pass Through Trustees in connection with such change of situs. Owner
Participant agrees with Lessee that, prior to the termination or expiration of
the Term of the Lease, it will not consent to or direct a change in the situs
of the Trust Estate without the prior written consent of Lessee.

7.2.4 COMPLIANCE WITH LEASE PROVISIONS

Owner Participant will, solely for the benefit of Lessee, comply with the
express provisions applicable to it contained in Sections 3.2.1 and 8.2.5 of
the Lease.

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598

7.2.5 SECURITIES ACT

7.2.6 REGARDING THE OWNER TRUSTEE

Owner Participant will not cause Owner Trustee to violate its obligations
under each Owner Trustee Agreement.

7.3 COVENANTS OF FIRST SECURITY AND OWNER TRUSTEE

First Security, in its individual capacity and/or as Owner Trustee, as
provided below, covenants and agrees with Lessee, Owner Participant, each Note
Holder and Mortgagee as follows:

7.3.1 LIENS

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

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7.3.2 OTHER BUSINESS

Owner Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.

7.3.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

7.3.4 SECURITIES ACT

7.3.5 PERFORMANCE OF AGREEMENTS

Owner Trustee shall perform its obligations under the Owner Trustee
Agreements in accordance with the terms thereof.

7.3.6 RELEASE OF LIEN OF TRUST INDENTURE

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600

7.3.7 NOTICES; DOCUMENTS

In the event any claim with respect to any liabilities is filed against
the Owner Trustee in its capacity as such and Owner Trustee shall have Actual
Knowledge thereof, the Owner Trustee shall promptly notify Lessee in writing
thereof. Owner Trustee further agrees to provide to Lessee promptly any
documents (including the certificate of aircraft registration) that it receives
from the FAA with respect to the Aircraft.

7.3.8 FILINGS

7.4 COVENANTS OF WTC

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

7.4.1 LIENS

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601

all or any part of the Aircraft, imposed on, incurred by or asserted against
any of the foregoing as a consequence of any such Lessor Lien.

7.4.2 SECURITIES ACT

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

7.4.3 PERFORMANCE OF AGREEMENTS

7.4.4 WITHHOLDING TAXES

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

7.5 COVENANTS OF NOTE HOLDERS

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

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602

7.5.1 WITHHOLDING TAXES

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

7.5.2 TRANSFER; COMPLIANCE

(b) Except for the transfer of the interests of each Applicable Pass
Through Trustee in the Equipment Notes to the trustee of the Related Trust (as
defined in each Applicable Pass Through Trust Agreement) in accordance with the
Applicable Pass Through Trust Agreement and except as otherwise required by the
terms of Section 2.13 of the Trust Indenture or Section 11 hereof, each Note
Holder will not sell, assign, convey, exchange or otherwise transfer any
Equipment Note or any interest in, or represented by, any Equipment Note (it
being understood that this provision is not applicable to the Pass Through
Certificates) unless the proposed transferee thereof first provides Lessee and
Owner Participant with both of the following:

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603

not involve or give rise to a transaction that constitutes a prohibited
transaction within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code involving Lessee, Owner Participant, a Pass
Through Trustee, the Subordination Agent or the proposed transferee
(other than a transaction that is exempted from the prohibitions of such
sections by applicable provisions of ERISA or the Code or administrative
exemptions or regulations issued thereunder); and

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

7.6 AGREEMENTS

7.6.1 OWNER TRUSTEE IS OWNER FOR ALL PURPOSES

7.6.2 RIGHTS UNDER THE LEASE

Lessee acknowledges and confirms each of Owner Participant's rights under
the Lease.

7.6.3 COMMENCEMENT OF BANKRUPTCY PROCEEDINGS

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604

7.6.4 CERTAIN BANKRUPTCY MATTERS

For purposes of this Section 7.6.4, "Excess Amount" means the amount by
which such payment exceeds the amount that would have been received by a Note
Holder or Mortgagee if First Security or Owner Participant had not become
subject to the recourse liability referred to in clause (b) above. Nothing
contained in this Section 7.6.4 shall prevent a Note Holder or Mortgagee from
enforcing any personal recourse obligation (and retaining the proceeds thereof)
of First Security or Owner Participant under this Agreement (other than as
referred to in clause (b) above) or the Trust Indenture (and any exhibits or
annexes thereto) or from retaining any amount paid by Owner Participant under
Sections 2.13 or 4.03 of the Trust Indenture.

7.6.5 QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING

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605

The foregoing, however, shall not be construed or deemed to modify or condition
in any respect the obligations of Lessee pursuant to Section 16 of the Lease,
which obligations are absolute and unconditional.

7.6.6 EFFECT OF LESSEE'S MERGER

Section 13.2.2 of the Lease is incorporated by reference herein.

7.6.7 NON-RECOURSE

Loan Participant and Mortgagee agree that (a) obligations of Owner Trustee
under the Trust Indenture or any other Operative Agreement and with respect to
the Equipment Notes shall be non-recourse to Owner Participant and to First
Security and (b) they will look solely to the income and proceeds from the
Trust Estate and the Trust Indenture Estate to the extent available for
distribution to Note Holder or Mortgagee as provided in the Trust Indenture and
that neither Owner Participant nor First Security will be personally liable to
Loan Participant or Mortgagee for any amounts payable by Owner Trustee under
the Trust Indenture or any other Operative Agreement; provided, however, that
the foregoing is not intended nor shall it be construed to limit any recourse
liability of Owner Participant or First Security to the extent that such
liability is expressly set forth in this Agreement (with respect to Owner
Participant) or in any of the Operative Agreements (with respect to First
Security) or arising by reason of the breach of any representation or warranty
or covenant given by such Person (in the case of First Security, in its
individual capacity).

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606

7.6.8 OTHER DOCUMENTS; AMENDMENT

(a) Each Participant hereby consents to the terms of the Lease, the Trust
Agreement and the Trust Indenture. Lessee acknowledges receipt of executed
copies of the Trust Agreement and the Trust Indenture and hereby consents to
the execution and delivery of the Trust Agreement and the Trust Indenture and
to all the terms thereunder, including, without limitation, the creation of a
Lien in respect of, among other things, the Aircraft and the Lease pursuant to
the Trust Indenture. Nothing in this Section 7.6.8 shall be construed to
require Lessee's consent to any future supplement to, or amendment, waiver or
modification of any other terms of, the Trust Agreement or the Trust Indenture.
Notwithstanding the foregoing, so long as the Lease has not terminated or
expired, Owner Trustee and Mortgagee hereby agree for the benefit of Lessee (i)
to comply with the provisions of the Trust Indenture if failure to so comply
would have an adverse effect on Lessee and such noncompliance is not the direct
result of an act or failure to act by Lessee, and (ii) not, without the consent
of Lessee, directly or indirectly to amend or modify (i) Article III, Article
IX or Section 2.05 of the Trust Indenture, (ii) any provision of any Operative
Agreement that will affect the stated principal amount of or premium or
interest on the Equipment Notes or (iii) any other provision of the Trust
Indenture or Equipment Notes in a manner that would adversely affect Lessee.
Mortgagee and Owner Trustee agree to promptly furnish to Lessee copies of any
supplement, amendment, waiver or modification of any of the Operative
Agreements to which Lessee or Owner Participant, as the case may be, is not a
party. Loan Participant agrees that it will not take any action in respect of
the Trust Indenture Estate except through the Mortgagee pursuant to the Trust
Indenture or as otherwise permitted by Trust Indenture.

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607

necessary documents to be duly filed for recording in accordance with
applicable United States federal Law.

7.6.9 CONSENTS

7.6.10 INSURANCE

Each of Owner Participant, the Applicable Pass Through Trustees, the
Subordination Agent and the Owner Trustee agrees not to obtain or maintain
insurance for its own account as permitted by Section 11.3 of the Lease if such
insurance would limit or otherwise adversely affect the coverage of any
insurance required to be obtained or maintained by Lessee pursuant to Section
11 and Annex D of the Lease.

7.6.11 EXTENT OF INTEREST OF NOTE HOLDERS

7.6.12 FOREIGN REGISTRATION

Each Participant, Owner Trustee and Mortgagee hereby agrees, for the
benefit of Lessee but subject to the provisions of Section 7.1.2 of the Lease:
(a) that Lessee shall be entitled to register the Aircraft or cause the
Aircraft to be registered in a country other than the United States subject to
compliance with the following:

(i) Lessor gives its prior written consent; and

(ii) each of the following requirements is satisfied:

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608

(A) Lessee shall deliver such request to Lessor at
least 30 days in advance of the date of any such proposed
change of registration;

(B) such registration shall be made, if at all, only
after the close of the calendar year in which the seventh
anniversary of the Delivery Date occurs or if a Lessee Act (as
defined in the Tax Indemnity Agreement) as a result of which
indemnification has been required under the Tax Indemnity
Agreement has created a longer Tax Attribute Period (as
defined in the Tax Indemnity Agreement), after the close of
the Tax Attribute Period, unless in either case Lessee prepays
any liability Owner Participant determines would be due under
the Tax Indemnity Agreement as a result of such registration
based upon the assumption that such registration would
continue for the remainder of the term of the Permitted
Sublease described in clause (D) below;

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

(E) such country (1) is the domicile of Permitted
Sublessee and the country in which Permitted Sublessee
maintains its principal place of business and (2) is a country
with which the United States then maintains normal diplomatic
relations;

(F) such country would recognize the interests of,
and would provide substantially equivalent protection
(including the right to take possession of the Aircraft in the
event of (1) a Lease Event of Default or a default by
Permitted Sublessee or (2) the bankruptcy of Lessee or
Permitted Sublessee) for the rights and remedies of, owner
participants, lessors, lenders and mortgagees in

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609

similar transactions as provided under the Law of the United
States;

(G) the courts of such country would give effect to
Lessor's title to and leasehold interest in the Aircraft, to
the registration of the Aircraft in the name of Lessor and to
the priority of the Lien of the Trust Indenture, in each case
substantially to the same extent as provided under the Law of
the United States; and

(H) if requested by Lessor, Lessee or any Permitted
Sublessee shall, for purposes of enforcement of the rights and
remedies provided for in Section 15 of the Lease, execute an
irrevocable power of attorney in form and substance
satisfactory to Lessor providing for, among other things, upon
and during the continuance of a Lease Event of Default, (1)
the deregistration of the Aircraft and (2) the reregistration
of the Aircraft in the United States by Lessor, including the
ability to obtain export licenses and take any other action
necessary or advisable for the repossession, export and
redelivery to Lessor of the Airframe, any Engine and any
airframe or engine substituted for the Airframe or any Engine,
all in accordance with the Lease.

(b) Lessor shall not unreasonably withhold its consent to such a request
by Lessee for a change of registration of the Aircraft in accordance with this
Section, if (and in connection with any reregistration Lessee shall provide
Mortgagee with the matters referred to in clauses (A), (B), (C),(D) and (H) of
Section 7.6.12(b)(i) and in clauses (A), (B), (C), (D),(E) and (F) of Section
7.6.12(b)(ii), in each case insofar as they relate to Mortgagee, Note Holders,
the Trust Indenture or the Trust Indenture Estate):

(i) Lessee shall have given to Lessor and Mortgagee assurances
reasonably satisfactory to each of them:

(A) to the effect that the provisions of Section 11
of the Lease have been complied with after giving effect to
such change of registration;

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610

(B) of the payment by Lessee of all reasonable expenses of Lessor,
each Participant and Mortgagee in connection with such change
of registry, including, without limitation (1) the reasonable
fees and disbursements of counsel, (2) any filing or recording
fees, Taxes or similar payments incurred in connection with the
change of registration of the Aircraft and the creation and
perfection of the security interest therein in favor of
Mortgagee for the benefit of Note Holders, (3) all costs and
expenses incurred in connection with any filings necessary to
continue in the United States the perfection of the security
interest in the Aircraft and the Lease in favor of Mortgagee
for the benefit of Note Holders and (4) any and all other
costs, expenses and Taxes under the Law of the country of
registry, whether initial or on a continuing basis,
incurred by Lessor or Owner Participant as a result of the
registration of the Aircraft, or the creation, attachment
and perfection of the security interest therein, under the
laws of the country of registry;

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

(D) as to the continued status of the Trust Indenture
as a first priority perfected Lien (subject to Permitted
Liens) on the Trust Indenture Estate (including, without
limitation, the Aircraft);

(E) that any import or export permits necessary to
take the Aircraft into or out of such country and any exchange
permits necessary to allow all Rent and other payments
provided for under the Lease shall be in full force and
effect;

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611

(F) that any value-added tax, customs or import fee
or duty, tariff, other Tax or similar governmental charge
relating to the change in jurisdiction of registration of the
Aircraft shall have been paid in full or adequately provided
for by Lessee;

(G) that such new country of registry imposes
aircraft maintenance standards no less stringent than those of
the FAA;

(H) that no Lease Default or Lease Event of Default
exists and that no Lease Default or Lease Event of Default
will occur or exist upon, or result from, such reregistration;
and

(I) with respect to such other matters as Lessor or
Owner Participant may reasonably request; and

(ii) Lessee shall deliver to Lessor, Owner Participant and Mortgagee
a favorable opinion, in form and substance and from counsel in such
country, in each case, reasonably satisfactory to Lessor, to the effect
that:

(A) the terms (including, without limitation, the
governing law, service-of-process and jurisdictional
submission provisions, and the remedies) of this Agreement,
the Lease, the applicable Permitted Sublease and the Trust
Indenture are legal, valid, binding and enforceable in such
country;

(B) it is not necessary for Lessor, any Participant,
Note Holders or Mortgagee to register or qualify to do
business in such country as a result, in whole or in part, of
the registration of the Aircraft in such country;

(C) there is no tort liability of or imputed to the
owner or lessor, or of persons lending money, on a secured or
unsecured basis, or any guarantor of any such person, to such
an owner or lessor for the purchase of, an aircraft, under the
laws of such country (it being understood that, in the event
such latter opinion cannot be given in a form satisfactory to
Lessor, Owner Participant and Mortgagee, such opinion shall be
waived if

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612

insurance or third-party indemnities satisfactory to Lessor,
Owner Participant and Mortgagee are available to cover such
risk and is provided at or before the time of such change of
registration, at Lessee's expense);

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

(E) the registration of the Aircraft would be
terminable without material burden, penalty or delay by Lessor
or Mortgagee upon the occurrence of a Lease Event of Default;

(F) there shall not exist possessory rights in favor
of the government of such country, Lessee or Permitted
Sublessee (including, without limitation, a defense of
sovereign immunity) that would, upon the bankruptcy of Lessee
or Permitted Sublessee or upon the occurrence of a Lease Event
of Default, prevent or delay the return of the Aircraft
pursuant to the Lease;

and covering the matters set forth in Sections 7.6.12(a)(ii)(F) and (G)
and to such further effect with respect to such other matters as Lessor
or Owner Participant may reasonably request.

(c) The parties hereto acknowledge to each other that none of such parties
has conducted a review of the countries in which the Permitted Air Carriers are
domiciled to determine whether any

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613

of the criteria set forth in Section 7.6.12(a) or (b) are currently met.

(d) Any such change in registration shall be at the sole expense of
Lessee, and Lessee shall pay all reasonable expenses of Lessor, each
Participant, Note Holders and Mortgagee in connection with any request to
change (and the evaluation thereof), and any actual change, of registration of
the Aircraft.

7.6.13 OTHER COMMERCIAL RELATIONS UNAFFECTED

Notwithstanding anything to the contrary set forth in any Operative
Agreement:

(a) Except as set forth in the Purchase Agreement Assignment, nothing
contained in the Lessee Operative Agreements shall constitute or be deemed to
be a waiver by Lessee of any rights, remedies or claims it may have against
Airframe Manufacturer or Engine Manufacturer or any subcontractor or supplier
of either; and the Operative Agreements do not and shall not be construed or
deemed to create any rights, waivers, immunities or indemnities in favor of
Airframe Manufacturer, Engine Manufacturer or any subcontractor or supplier of
either with respect to any such rights, remedies or claims of Lessee; and

7.6.14 INTEREST IN CERTAIN ENGINES

Each Participant, Owner Trustee and Mortgagee agree, for the benefit of
each of the lessor, conditional seller, mortgagee or secured party of any
airframe or engine leased to, or purchased by, Lessee or any Permitted
Sublessee subject to a lease, conditional sale, trust indenture or other
security agreement that it will not acquire or claim, as against such lessor,

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614

conditional seller, mortgagee or secured party, any right, title or interest in
any engine as the result of such engine being installed on the Airframe at any
time while such engine is subject to such lease, conditional sale, trust
indenture or other security agreement and owned by such lessor or conditional
seller or subject to a trust indenture or security interest in favor of such
mortgagee or secured party; provided, that Lessee or any such Permitted
Sublessee shall have received from the lessor, conditional seller, mortgagee or
secured party in respect of such airframe a written agreement (which may be the
lease, conditional sale agreement, trust indenture or other security agreement
covering such airframe) whereby such lessor, conditional seller, mortgagee or
secured party effectively agrees that neither it nor its successors or assigns
will acquire or claim any right, title or interest in any Engine by reason of
such Engine being installed on such airframe at any time while such Engine is
subject to the Lease or is owned by Owner Trustee.

7.6.15 TRUST AGREEMENT

Each of First Security and Owner Trustee hereby (i) agrees with Lessee
that prior to the termination or expiration of the Term of the Lease, it will
not amend, supplement, terminate or otherwise modify any provision of the Trust
Agreement in such a manner as to adversely affect the rights of Lessee without
the prior written consent of Lessee and it will not revoke the trust created by
the Trust Agreement so long as the Lien of the Trust Indenture remains
undischarged or if such revocation would have an adverse effect on the Lessee
and (ii) agrees with Loan Participant and Mortgagee that prior to the discharge
of the Lien of the Trust Indenture it will not amend, supplement, terminate or
otherwise modify any provision of the Trust Agreement in such a manner as to
adversely affect the rights of Loan Participant or Mortgagee without the prior
written consent of such party and it will not revoke the trust created by the
Trust Agreement so long as the Lien of the Trust Indenture remains
undischarged. Nothing contained in this Agreement shall impair any right under
the Trust Agreement of First Security to resign as Owner Trustee.

7.6.16 RELEASE OF LIEN OF TRUST INDENTURE

Each of Lessee, Lessor and Mortgagee agree that in each instance referred
to in the Lease in which a transfer of any property is required to be made by
Lessor to Lessee or any other Person (other than Mortgagee or Owner
Participant), upon full

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615

compliance by Lessee with Lessee's obligations, if any, under the applicable
section thereof and compliance with any applicable provisions of the Trust
Indenture, Mortgagee shall (upon certification by Lessee and Owner Trustee of
any such event and without the consent of Note Holders) promptly execute such
instruments as Owner Trustee or Lessee may reasonably request to evidence the
release of the Lien of the Trust Indenture with respect to such property.

SECTION 8. CONFIDENTIALITY

Lessee, Owner Participant, Note Holders, Owner Trustee and Mortgagee shall
keep Annexes B, C and D and Schedules 1, 2, 3 and 4 to the Lease, the
Participation Agreement, the Purchase Agreement Assignment and the Tax
Indemnity Agreement confidential and shall not disclose, or cause to be
disclosed, the same to any Person, except (A) to prospective and permitted
transferees of Lessee's, Owner Participant's, a Note Holder's, a Liquidity
Provider's, Owner Trustee's, Mortgagee's or other Indenture Indemnitee's
interest or their respective counsel or special counsel, independent insurance
brokers, auditors, or other agents who agree to hold such information
confidential, (B) to Lessee's, Owner Participant's, a Note Holder's, a
Liquidity Provider's, a Pass Through Trustee's, Owner Trustee's, Mortgagee's,
or other Indenture Indemnitee's counsel or special counsel, independent
insurance brokers, auditors, or other agents, Affiliates or investors who agree
to hold such information confidential, (C) as may be required by any statute,
court or administrative order or decree, legal process or governmental ruling
or regulation, including those of any applicable insurance regulatory bodies
(including, without limitation, the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors or any stock exchange, (D) with respect to Lessee and Owner
Participant, by mutual agreement of such parties, (E) with respect to a Note
Holder or any Pass Through Trustee, to a nationally recognized rating agency
for the purpose of obtaining a rating on the Equipment Notes or the Pass
Through Trust Certificates or to support an NAIC rating for the Equipment Notes
or (F) such other Persons as are reasonably deemed necessary by the disclosing
party in order to protect the interests of such party or for the purposes of
enforcing such documents by such party; provided, that any and all disclosures
permitted by clauses (C), (D), (E) or (F) above shall be made only to the
extent necessary to meet the specific requirements or needs of the Persons
making such disclosures.

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SECTION 9. INDEMNIFICATION AND EXPENSES

9.1 GENERAL INDEMNITY

[INTENTIONALLY OMITTED]

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9.2 EXPENSES

9.2.1 INVOICES AND PAYMENT

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

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9.2.2 PAYMENT OF OTHER EXPENSES

Lessee shall pay (i) the ongoing fees and expenses of Owner Trustee and
Mortgagee, and (ii) all reasonable out-of-pocket costs and expenses (including
the reasonable fees and disbursements of counsel) incurred by any Participant
attributable to (A) any transfer of title to the Aircraft or any Engine
contemplated by Section 4.6 of the Lease or (B) any waiver, amendment or
modification of any Operative Agreement to the extent requested by Lessee.

9.3 GENERAL TAX INDEMNITY

[INTENTIONALLY OMITTED]

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SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS

10.1 PARTICIPANTS, OWNER TRUSTEE AND NOTE HOLDERS

10.1.1 OWNER PARTICIPANT

(a) During the Term, Owner Participant shall not Transfer any or all of
its right, title or interest in the Trust Estate or the Trust Agreement and to
this Agreement unless:

(i) The Transferee shall have full power, authority and legal right
to execute and deliver and to perform whatever obligations under this
Agreement and the other Owner Participant Agreements shall be assumed by
such Transferee;

(ii) The Transferee shall enter into one or more legal, valid,
binding and enforceable agreements (accompanied by an opinion of counsel
(who may be internal counsel for Owner Participant or the Transferee)
addressed to Lessee, Owner Trustee and Mortgagee to the effect that the
Transferee has the power and authority to execute, deliver and perform
such agreement or agreements, and that such agreement or agreements are
legal, binding and enforceable against Transferee in accordance with its
or their terms, subject to customary bankruptcy and equitable remedies
exceptions and to any other applicable exceptions, qualifications and
assumptions of the types contained in the opinions delivered pursuant to
Section 5.1.2(xxiii) (F) and (G)) effective to confirm that such
Transferee agrees for the benefit of Lessee, Owner Trustee and Mortgagee
to be bound by all the

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620

terms of and to undertake all of the obligations arising after such
Transfer of the transferring Owner Participant under this Agreement and
the other Owner Participant Agreements, and in which it makes
representations and warranties comparable to those contained in Section
6.2;

(iii) Owner Participant shall deliver to Lessee and Mortgagee an
opinion of counsel (which may be internal counsel for Owner Participant)
to the effect that such Transfer does not violate the Act, the Securities
Act or any other applicable Federal law, subject to applicable
exceptions, qualifications and assumptions of the types contained in the
opinions delivered pursuant to Section 5.1.2(xxiii) (F) and (G);

(iv) The Transferee is a Citizen of the United States, if such
citizenship is necessary to maintain registration of the Aircraft under
the Act (it being understood that the existence of any such requirement
is to be determined without giving consideration to Section 47.9 of the
FAA Regulations), or shall use a voting powers trust or similar
arrangement in order to hold an interest in the Trust Estate such that
the Aircraft can be registered in the United States (without giving
consideration to Section 47.9 of the FAA Regulations); and

(v) Its Transferee shall be either (A) a Permitted Institution or
(B) any other person (other than, without Lessee's consent, a commercial
air carrier or Affiliate thereof that is in direct competition with
Lessee) the obligations of which under the Owner Participant Agreements
are guaranteed by a Permitted Institution or a guarantor consented to by
Lessee, Owner Trustee and Mortgagee, in any case, pursuant to a written
guaranty, in form and substance reasonably satisfactory to Lessee and, if
at the time of Transfer to such Transferee an Event of Default that is
not also, and is not caused by, a Lease Event of Default has occurred and
is continuing, to Mortgagee.

(b) Notwithstanding anything to the contrary contained in this Section
10.1:

(i) Owner Participant may at any time grant participations in its
interest in and to this Agreement, the Trust Estate or the Trust
Agreement to any person

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621

(hereinafter in this Section 10.1.1(b) referred to as a "participant"),
so long as (A) no such participant shall be an Owner Participant of
record, it being agreed that Lessee, the Note Holders, Owner Trustee and
Mortgagee shall be entitled to deal solely with Owner Participant of
record (who shall not (unless such participant is the sole participant
and is a Permitted Institution) be required by contract to obtain the
consent of any such participant in order to take action under the
Operative Agreements) in connection with the transactions contemplated by
this Agreement and the other Operative Agreements and (B) Owner
Participant shall provide Lessee, the Note Holders, Owner Trustee and
Mortgagee with written notice of any such participation specifying the
name and address of the proposed participant and shall reimburse Lessee,
the Note Holders, Owner Trustee and Mortgagee for all reasonable Expenses
incurred by such party relating to any such participation;

(ii) Owner Participant may at any time Transfer any or all of its
right to receive payment of residual value of the Aircraft (including,
without limitation, with respect to a Transfer of all or a portion of (y)
any net proceeds from a sale or re-lease of the Aircraft whether at the
end of the Term or pursuant to any provision of the Lease or otherwise or
(z) the net proceeds received as a result of an Event of Loss or an Event
of Default), subject in each case to the Lien of the Trust Indenture (to
the extent applicable);

(iii) There shall be no more than two Owner Participants of record
at any one time; and

(iv) After the expiration or termination of the Term of the Lease
and discharge of the Lien of the Trust Indenture, Owner Participant may
freely Transfer all or any of its right, title or interest in and to this
Agreement, the Trust Estate and the Trust Agreement without compliance
with this Section 10.1;

provided, that (A) no participant under clause (i) above or transferee under
clause (ii) above shall have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft, Trust Estate or Trust Indenture
Estate, (B) Lessee shall not have any increased liability or obligations as a
result of any participation under clause (i) above or Transfer under

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clause (ii) above and (C) any participation under clause (i) above or Transfer
under clause (ii) above shall not cause the Aircraft to be or become ineligible
for registration in the name of Owner Trustee under the Act and regulations
then applicable thereunder (without giving consideration to Section 47.9 of the
FAA Regulations).

(c) Owner Participant shall give written notice to Lessee, Mortgagee and
Owner Trustee at least 10 days prior to any such Transfer, specifying the name
and address of the proposed Transferee, and providing financial statements of
the proposed Transferee evidencing the requirements described in Section
10.1.1(a)(v)(A) or (B) above.

(d) Any fees, charges and expenses, including the reasonable legal fees,
charges and expenses incurred by Lessee, Owner Participant, Mortgagee, any Note
Holder or Owner Trustee in connection with any Transfer by Owner Participant
permitted by this Section 10.1.1, or by the Transferee in any such case, will
be paid for by Lessee, in the case of any Transfer by the initial Owner
Participant, and thereafter by the Owner Participant making a transfer, or its
Transferee.

10.1.2 OWNER TRUSTEE

Owner Trustee may transfer its interests in the Trust Agreement pursuant
to Section 9 thereof.

10.1.3 NOTE HOLDERS

Subject to Section 7.5.3 hereof and Section 2.07 of the Trust Indenture,
any Note Holder may, at any time and from time to time, Transfer or grant
participations in all or any portion of the Equipment Notes and/or all or any
portion of its beneficial interest in its Equipment Notes and the Trust
Indenture Estate to any person (it being understood that the sale or issuance
of Pass Through Certificates by a Pass Through Trustee shall not be considered
a Transfer or participation); provided, that any participant in any such
participations shall not have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft or Trust Indenture Estate and
Lessee shall not have any increased liability or obligations as a result of any
such participation. In the case of any such Transfer, the Transferee, by
acceptance of Equipment Notes in connection with such Transfer, shall be deemed
to be bound by all

PARTICIPATION AGREEMENT SPECIAL PAGE 80

623

of the covenants of Note Holders contained in the Operative Agreements.

10.2 EFFECT OF TRANSFER

Upon any Transfer in accordance with Section 10.1.1, 10.1.2 or 10.1.3
(other than any Transfer (a) by Owner Participant pursuant to Section
10.1.1(b)(i) or (ii), or (b) by any Note Holder, in each case, to the extent it
only grants participations in Equipment Notes or in its beneficial interest
therein), Transferee shall be deemed an "Owner Participant," "Owner Trustee" or
a "Note Holder," respectively, for all purposes of this Agreement and the other
Operative Agreements and, in the case of a Transferee of any Participant or
Note Holder, shall be deemed to have paid its ratable portion of Lessor's Cost
previously made by Owner Participant or Loan Participant, respectively, making
such conveyance and represented by the interest being conveyed, and each
reference herein to Owner Participant, Owner Trustee or Note Holder,
respectively, shall thereafter be deemed a reference to such Transferee for all
purposes, and the transferring Owner Participant, Owner Trustee or Note Holder
shall be released (except, in the case of Owner Participant, to the extent of
any guaranty provided by it under Section 10.1.1(a)(v)) from all of its
liabilities and obligations under this Agreement and any other Operative
Agreements to the extent such liabilities and obligations arise after such
Transfer and, in each case, to the extent such liabilities and obligations are
assumed by the transferee; provided, that such transferring Owner Participant,
Owner Trustee or Note Holder (and its respective Affiliates, successors,
assigns, agents, servants, representatives, directors and officers) will
continue to have the benefit of any rights or indemnities under any Operative
Agreement vested or relating to circumstances, conditions, acts or events prior
to such Transfer.

SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS

11.1 REFUNDING GENERALLY

Subject to Sections 11.3 and 11.4, in the event that at any time Lessee
shall have given written notice to Owner Participant, Owner Trustee, and
Mortgagee that Lessee is requesting a voluntary redemption of all, but not less
than all, of the outstanding Equipment Notes (in compliance with the provisions
of Sections 2.11 and 2.12 of the Trust Indenture) by Owner Trustee

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as part of a refunding transaction, Owner Participant agrees to negotiate in
good faith and promptly conclude an agreement, in form and substance reasonably
satisfactory to Owner Participant, with Lessee as to the terms of such
refunding transaction (including the terms of any debt to be issued in
connection with such refunding transaction and the documentation to be executed
in connection therewith), and after Lessee and Owner Participant shall have
concluded such an agreement:

11.1.1 REFUNDING CERTIFICATE

Within ten Business Days after reaching such agreement, Owner Participant
will deliver to Lessee a Refunding Certificate. The terms of the Refunding
Certificate shall not provide for an increase in the then-outstanding principal
amount of the Equipment Notes. Within ten Business Days of its receipt of the
Refunding Certificate, Lessee may demand a verification pursuant to Section
3.2.1(d) of the Lease of the information set forth in the Refunding
Certificate. Upon the acceptance by Lessee of the accuracy of the information
set forth in the Refunding Certificate or the determination pursuant to such
verification procedures of the Refunding Information, the appropriate parties
will take the actions specified in Sections 11.1.2 through 11.1.7 below.

11.1.2 FINANCING AGREEMENTS

Owner Trustee, Mortgagee and other appropriate parties will enter into a
financing or loan agreement in form and substance satisfactory to Owner
Participant with the institution or institutions to be named therein providing
for (a) the issuance and sale by Owner Trustee to such institution or
institutions on the Refunding Date of the New Debt and (b) the application of
the proceeds of the sale of the New Debt to the redemption of all such
Equipment Notes on the Refunding Date.

11.1.3 LEASE AMENDMENTS

As a condition to the closing of the refunding transaction, Lessee and
Owner Trustee will amend the Lease, as contemplated by Section 3.2.1(b) of the
Lease, to provide that (a) Basic Rent in respect of the period from and after
the Refunding Date shall be as provided in the Refunding Information and (b)
amounts payable in respect of Stipulated Loss Value and Termination Value from
and after the Refunding Date shall be as provided in the Refunding Information.

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11.1.4 SECURITY AGREEMENTS

11.1.5 MAKE-WHOLE AMOUNT

At the closing of such refunding (and as indemnification for the loss
resulting therefrom), Owner Trustee shall pay, upon receipt of the same from
Lessee (which Lessee shall pay as Supplemental Rent as a condition to the
closing to the refunding transaction), to each Note Holder, the Make-Whole
Amount, if any, payable to such Note Holder.

11.1.6 EXPENSES

Whether or not such refunding transaction is consummated, Lessee shall pay
or reimburse all of the reasonable Expenses of all parties to such refunding
transaction, including, without limitation, the reasonable fees and expenses of
such parties' counsel and any related loan or commitment fees and the
reasonable fees and expenses of one advisor to Owner Participant.

11.1.7 RETURN OF EQUIPMENT NOTES

Subject to compliance by Owner Trustee and Lessee with all applicable
terms and conditions for voluntary prepayment under the Trust Indenture and
this Agreement, each Note Holder will transfer to Owner Trustee the Equipment
Notes held by it for cancellation (and Owner Trustee shall cancel the same),
against receipt by such Note Holder of the then-outstanding principal amount of
such Equipment Notes, accrued and unpaid interest and Make-Whole Amount, if
any, thereon, together with payment in full of all other amounts then payable
to such Note Holder and Mortgagee hereunder or under the Trust Indenture.

11.2 TIMING; REFUNDING LIMIT; NOTICE

No such optional refunding shall be permitted until after the last day of
the calendar year in which the fifth anniversary of the Delivery Date occurs.
Only one such refunding shall be permitted during the Term. Lessee, acting on
behalf of Owner

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626

Trustee, shall give Mortgagee at least 30 days' revocable prior written notice
of the proposed date of the optional redemption.

11.3 LIMITATIONS ON OBLIGATION TO REFUND

Notwithstanding the foregoing, Owner Participant shall have no obligation
to proceed with any refunding transaction as contemplated by this Section 11:

(a) If in Owner Participant's reasonable good faith judgment, such
transaction would have an adverse impact on it (including, without limitation,
the risk of adverse tax consequences to Owner Participant for which it is not
indemnified by Lessee or the unavailability to Owner Trustee or Mortgagee of
the benefits of Section 1110 with respect to the Aircraft);

(b) Unless a third party or parties, unaffiliated with Lessee or Owner
Participant, shall have committed to (and shall) provide the financing needed
to consummate the proposed refunding transaction, it being understood that
Owner Participant shall not have any obligation to locate any such party or
parties;

(c) Unless Lessee indemnifies Owner Trustee and Owner Participant by
agreement in form and substance satisfactory to each of them for any liability,
obligation (other than the obligation to pay principal and interest and related
payments in respect of the New Debt), cost or expense (including, without
limitation, reasonable attorneys' fees) related to or arising out of any such
refunding transaction;

(d) If a Lease Default or a Lease Event of Default shall have occurred and
be continuing; or

(e) If such refunding is to be denominated in any currency other than
Dollars.

11.4 ALL EQUIPMENT NOTES

Any refinancing pursuant to this Section 11 shall be of all Equipment
Notes then outstanding.

11.5 EXECUTION OF CERTAIN DOCUMENTS

Lessee, Owner Participant, Owner Trustee and Mortgagee each agree to
execute any document necessary or advisable to implement this Section 11
(including, without limitation, the execution,

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627

delivery and/or provision of any appropriate additional or modified amendment,
representation, warranty, certificate, opinion or other document that may
reasonably be requested by Lessee or any other person).

11.6 ERISA

Owner Participant shall not be obligated to conclude the proposed
refunding transaction unless the agreements utilized to effect such refunding
contain an agreement by the initial holders of the New Debt substantially the
same as Section 7.5.2(b) of this Agreement, except, so long as relevant
provisions of ERISA shall not have changed since the date of this Agreement in
any respect material to Owner Participant with respect to such refunding, in
the case of any refunding transaction where the New Debt is sold in a public
offering under the Securities Act or a private placement intended for resale
pursuant to Rule 144A under the Securities Act, in which case the holders of
the New Debt shall be subject to the restrictions relating to ERISA
substantially the same as those applicable to the purchasers of the Pass
Through Certificates, as described in the Offering Circular relating to the
initial issuance and sale of the Pass Through Certificates.

11.7 CONSENT TO OPTIONAL REDEMPTIONS

Each of Owner Participant, Owner Trustee and Mortgagee agrees with Lessee
not to cause an optional redemption of the Equipment Notes that would cause an
increase in Lessee's periodic Rent obligations or adversely affect Lessee's
voluntary redemption rights under this Section 11 or any of Lessee's other
rights or obligations under the Operative Agreements without the prior written
consent of Lessee or at Lessee's expense except as provided in Section 2.13 of
the Trust Indenture or otherwise in connection with the exercise of remedies
under the Trust Indenture upon the occurrence and continuation of a Lease Event
of Default.

SECTION 12. LEASE FOR ALL PURPOSES; SECTION 1110

(a) Each of Lessee, Owner Participant and Owner Trustee agrees that the
Lease constitutes an agreement of lease and nothing contained therein shall be
construed as conveying to Lessee any right, title or interest in the Aircraft
except as a lessee only.

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(b) It is the intention of each of Lessee, Owner Participant, Loan
Participant, the Note Holders (such intention being evidenced by each of their
acceptance of an Equipment Note), Owner Trustee and Mortgagee that Owner
Trustee, as lessor under the Lease (and Mortgagee as assignee of Owner Trustee
under the Trust Indenture), shall be entitled to the benefits of Section 1110
with respect to the right to take possession of the Aircraft, Airframe, Engines
and Parts as provided in the Lease in the event of a case under Chapter 11 of
the Bankruptcy Code in which Lessee is a debtor, and in any instance where more
than one construction is possible of the terms and conditions of the Lease or
any other pertinent Operative Agreement, each such party agrees that a
construction which would preserve such benefits shall control over any
construction which would not preserve such benefits.

SECTION 13. OWNER PARTICIPANT'S RIGHT TO RESTRUCTURE

13.1 GENERAL RIGHT TO RESTRUCTURE

Lessee, Loan Participant and each Note Holder agree that after the
Delivery Date and subject to the limitations of Section 13.2, for so long as
the initial Owner Participant is the Owner Participant, the Owner Participant
shall have the right to restructure the Transactions using (a) a "cross-border
lease," a tax lease or a head-lease/sublease structure and (b) any other
transaction, which may involve special structural arrangements, as such Owner
Participant may elect (any such structure described above, a "Special
Structure"). Any Special Structure may result in additional persons
participating in the Transactions, which persons shall agree to provisions
comparable to Sections 7.6.5(a) and 7.6.14. Subject to the provisions of
Sections 13.2 and 13.3, Lessee, Loan Participant and each Note Holder agree to
cooperate in the implementation of any such restructuring and take such action
as may reasonably be requested by the Owner Participant to accomplish such
restructuring, including taking such actions as may be reasonable or customary
in the type of Special Structure elected. In connection with any proposed
Special Structure, Owner Participant shall provide all information reasonably
requested by Lessee, Loan Participant or any Note Holder with respect thereto.
The Owner Participant shall be entitled to retain all of the benefits of any
such transaction.

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13.2 LIMITATIONS ON RESTRUCTURING PROVISIONS; ADDITIONAL TERMS

13.2.1 LESSEE

Notwithstanding Section 13.1, in no event shall any such Special Structure
(a) change the terms and conditions of Lessee's rights and obligations, from
those which Lessee would otherwise possess or be subject to in the absence of
any such Special Structure, in a manner which is materially adverse to Lessee,
(b) expose Lessee to any additional risks (including overall tax risks) beyond
those to which Lessee would be exposed in the absence of any such Special
Structure or (c) change the terms and conditions of Lessee's rights and
obligations, from those which Lessee would otherwise possess or be subject to
in the absence of any Special Structure, in a manner which is adverse to
Lessee, unless, with respect to clause (b) and clause (c) above, Lessee shall
have been indemnified against such additional risks by Owner Participant, or
other participants in such transaction (so long as such other participants
shall, as to their creditworthiness at the time any such indemnity is given, be
reasonably acceptable to Lessee) in a manner reasonably satisfactory to Lessee.
In no event shall Lessee be required to provide an indemnity with respect to
any foreign tax benefit of a Special Structure or to indemnify against the
failure of a head lease not to constitute a true lease for U.S. federal income
tax purposes.

13.2.2 LOAN PARTICIPANT AND NOTE HOLDERS

Notwithstanding Section 13.1, any such Special Structure shall not, and
prior to the exercise of its rights thereunder, the Owner Participant shall
deliver an officer's certificate to Mortgagee and to the Pass Through Trustees
that provides that any such Special Structure shall not, (a) change the terms
and conditions of Loan Participant's or any Note Holder's rights and
obligations under the Operative Agreements or rights and obligations of holders
of Pass Through Certificates issued in connection with the Transaction or the
rights and obligations of any of the other Indenture Indemnitees, from those
which Loan Participant, Note Holders, or Indenture Indemnitees and such Pass
Through Certificate holders would otherwise possess or be subject to in the
absence of such Special Structure (including, without limitation, the amount
and timing of any payment of principal, interest and Make-Whole Amount under
the Equipment Notes, the

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relative rights of the Note Holders and other Indenture Indemnitees with
respect to such payments and such holder of Pass Through Certificates and the
priority of Mortgagee's Lien on the Trust Indenture Estate under the Trust
Indenture) or (b) expose Loan Participant, any such Note Holder, any such
holder of Pass Through Certificates or other Indenture Indemnitees to any
additional risks beyond those to which Loan Participant, such Certificate
Holder or such holder of Pass Through Certificates would be exposed in the
absence of such Special Structure. In addition, in no event shall any Special
Structure be permitted unless a written confirmation from the Rating Agencies
is obtained prior to the implementation of such Special Structure to the effect
that such Special Structure will not adversely affect the ratings of the Pass
Through Certificates.

13.3 SPECIAL STRUCTURE TRANSACTION EXPENSES

Whether or not any proposed restructuring transaction under this Section
13 is consummated, the Owner Participant shall pay (or cause to be paid) the
reasonable costs and expenses incurred by all parties in connection therewith;
provided, that if any proposed Special Structure is not consummated as a result
of Lessee's failure to act in good faith in connection with any amendments to
any Operative Agreement necessary as a result thereof, then all such costs and
expenses shall be borne by Lessee.

SECTION 14. CHANGE OF CITIZENSHIP

14.1 GENERALLY

Without prejudice to the representations, warranties or covenants
regarding the status of any party hereto as a Citizen of the United States:

(b) Owner Participant agrees that, in the event its status is to change or
has changed as a Citizen of the United States, or it makes public disclosure of
circumstances as a result of which

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631

it believes that such status is likely to change, it will notify all the other
parties to this Participation Agreement of (i) such change in status promptly
after obtaining Actual Knowledge thereof or (ii) such belief as soon as
practicable after such public disclosure but in any event within ten Business
Days after such public disclosure.

14.2 OWNER PARTICIPANT

Owner Participant agrees, solely for the benefit of Lessee and the Note
Holders that if, during such time as the Aircraft is registered in the United
States, (a) it shall not be a Citizen of the United States and (b) the Aircraft
shall be, or would therefore become, ineligible for registration in the name of
Owner Trustee under the Act and regulations then applicable thereunder (without
giving consideration to Section 47.9 of the FAA Regulations), then Owner
Participant shall as soon as is reasonably practicable, but in any event within
30 days after obtaining Actual Knowledge of such ineligibility and of such loss
of citizenship, (y) effect voting trust or other similar arrangements (in which
case any provisions contained in the Operative Agreements restricting Owner
Participant's or Owner Trustee's ability to amend the Trust Agreement shall not
apply to the extent necessary to permit the use of such a voting trust or other
similar arrangement) or take any other action as may be necessary to prevent
any deregistration or maintain the United States registration of the Aircraft
or (z) transfer in accordance with the terms of this Agreement all its right,
title and interest in and to this Agreement, the Trust Estate and the Trust
Agreement in accordance with Section 10.1.

14.3 OWNER TRUSTEE

Upon First Security giving any notice in accordance with Section 14.1(a),
Owner Trustee shall, subject to Section 9.1.1 of the Trust Agreement, resign as
Owner Trustee. Upon its receipt of such notice, Owner Participant shall as
promptly as practicable appoint a Citizen of the United States as successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement.

14.4 MORTGAGEE

Upon WTC giving any notice in accordance with Section 14.1(a), Mortgagee
shall (if and so long as such citizenship is necessary under the Act as in
effect at such time or, if it is not necessary, if and so long as Mortgagee's

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citizenship could have any adverse effect on Lessee, any Participant or any
Note Holder), subject to Section 8.02 of the Trust Indenture, resign as
Mortgagee promptly upon its ceasing to be such a citizen.

SECTION 15. CONCERNING OWNER TRUSTEE

It is understood and agreed that, except as otherwise expressly provided
herein or in the Trust Agreement or the Trust Indenture, Owner Trustee is
entering into this Agreement solely in its capacity as trustee as provided in
the Trust Agreement and not in its individual capacity and in no case
whatsoever will it be liable or accountable in its individual capacity for any
of the statements, representations, warranties, agreements or obligations of
Owner Trustee hereunder, or for any loss in respect thereof, as to all of which
the parties agree to look solely to the Trust Estate; provided, that nothing in
this Section 15 shall be deemed to limit in scope or substance the personal
liability of First Security (a) to Owner Participant as expressly set forth in
the Trust Agreement, (b) in respect of the representations, warranties and
agreements of First Security expressly made as such herein or in any other
Operative Agreement to which it is a party, and (c) for the consequences of its
own gross negligence, willful misconduct, and, in receiving, handling or
remitting of funds only, its willful misconduct or simple negligence as a
trustee.

SECTION 16. MISCELLANEOUS

16.1 AMENDMENTS

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writing and signed by the party against which enforcement of the same is sought.

16.2 SEVERABILITY

16.3 SURVIVAL

The representations, warranties, indemnities and covenants set forth
herein shall survive the making available of the respective Commitments by
Participants, the delivery or return of the Aircraft, the Transfer of any
interest of Owner Participant in this Agreement, the Trust Estate and the Trust
Agreement, the Transfer of any interest by any Note Holder of its Equipment
Note, provided that on the expiration or other termination of the Lease, only
such indemnities shall survive.

16.4 REPRODUCTION OF DOCUMENTS

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16.5 COUNTERPARTS

This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.

16.6 NO WAIVER

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

16.7 NOTICES

PARTICIPATION AGREEMENT SPECIAL PAGE 92

635

facsimile or other number as each party hereto may hereafter specify by notice
to the other parties hereto. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be effective when
received or, if made, given, furnished or filed (a) by facsimile or
telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.

16.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

(a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

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

(c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SET FORTH PURSUANT TO SECTION
16.7. EACH PARTY HERETO HEREBY AGREES THAT SERVICE UPON IT, OR ANY OF ITS
AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SECTION 16.8(C), SHALL CONSTITUTE
VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY, AND EACH SUCH PARTY
HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO GIVE ANY NOTICE OF SUCH
SERVICE TO SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF
SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING
BASED THEREON.

16.9 THIRD-PARTY BENEFICIARY

PARTICIPATION AGREEMENT SPECIAL PAGE 93

636

referred to in Section 7.6.14, which are intended third party beneficiaries
with respect to such Section) with any rights of any nature whatsoever against
any of the parties hereto and no person not a party hereto (other than the
Indenture Indemnitees with respect to the provisions of Section 9.1, and the
persons referred to in Section 7.6.14 with respect to the provisions of such
Section) shall have any right, power or privilege in respect of any party
hereto, or have any benefit or interest, arising out of this Agreement.

16.10 ENTIRE AGREEMENT

This Agreement, together with the other Operative Agreements, on and as of
the date hereof, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
understandings or agreements, whether written or oral, among any of the parties
hereto with respect to such subject matter are hereby superseded in their
entireties. Notwithstanding the foregoing or any other provisions of the
Operative Agreements, the Lessee agrees with the Owner Participant that the
provisions of this Agreement (including, without limitation, the provisions of
Sections 9.1 and 9.3 of this Agreement) or any other Operative Agreement are
not intended nor shall they be construed to limit the Lessee's obligations to,
or the rights of, the Owner Participant under any other agreement between the
Lessee and the Owner Participant (it being understood that any such agreements
will not affect the rights and obligations of the Loan Participant or the
Mortgagee under the Operative Agreements).

16.11 FURTHER ASSURANCES

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

[This space intentionally left blank]

PARTICIPATION AGREEMENT SPECIAL PAGE 94

637

IN WITNESS WHEREOF, each of the parties hereto confirms that it has had an
opportunity to review, become familiar with and negotiate this Participation
Agreement, including, without limitation, Section 16.8, and has caused this
Participation Agreement to be duly executed and delivered as of the day and
year first above written.

CONTINENTAL AIRLINES, INC.,
Lessee

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

----------------------------------------
Owner Participant

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

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

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

PARTICIPATION AGREEMENT SPECIAL PAGE 1

638

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

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

WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as expressly provided
herein, but solely as
Pass Through Trustee under
the Pass Through Trust Agreement for
the Continental Pass Through Trust,
1997-1A-O

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

WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as expressly provided
herein, but solely as
Pass Through Trustee under
the Pass Through Trust Agreement for
the Continental Airlines Pass Through
Trust, 1997-1B-O

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

PARTICIPATION AGREEMENT SPECIAL SIGNATURE PAGE

639

WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as expressly provided
herein, but solely as
Pass Through Trustee under
the Pass Through Trust Agreement for
the Continental Airlines Pass Through
Trust, 1997-[1C-1][1C-II]-O

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

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

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

PARTICIPATION AGREEMENT SPECIAL SIGNATURE PAGE

640

ANNEX A - DEFINITIONS
LEASE AGREEMENT ____

ANNEX A

DEFINITIONS

GENERAL PROVISIONS

(a) In each Operative Agreement, unless otherwise expressly provided, a
reference to:

(ii) words importing the plural include the singular and
words importing the singular include the plural;

(iv) any provision of any Law includes any such provision
as amended, modified, supplemented, substituted, reissued or reenacted
prior to the Delivery Date, and thereafter from time to time;

Annex A Special
641
2

(b) Each exhibit, annex and schedule to each Operative Agreement
is incorporated in, and shall be deemed to be a part of, such Operative
Agreement.

(d) Headings used in any Operative Agreement are for convenience
only and shall not in any way affect the construction of, or be taken into
consideration in interpreting, such Operative Agreement.

DEFINED TERMS

"Act" means part A of subtitle VII of title 49, United States Code.

Annex A Special
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3

"Additional Insured" is defined in Section D of Annex D to the Lease.

(ii) For federal income tax purposes, Owner Participant
will be entitled to depreciation or cost recovery deductions with
respect to Lessor' s Cost of the Aircraft; and

(iii) For federal income tax purposes, Owner Participant
will be entitled to deductions for interest payments on the Equipment
Notes.

"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.

"Aircraft" means, collectively, the Airframe and Engines.

"Aircraft ▇▇▇▇ of Sale" means the full warranty ▇▇▇▇ of sale covering
the Aircraft delivered by Airframe Manufacturer to Owner Trustee on the
Delivery Date.

Annex A Special
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4

required to be delivered by Lessee upon return of the Aircraft, Airframe or
Engines under Section 5 of the Lease; and such term shall include all
additions, renewals, revisions and replacements of any such materials from time
to time made, or required to be made, in accordance with the Lease or
Maintenance Program or by the FAA (or other Aviation Authority) regulations,
and in each case in whatever form and by whatever means or medium (including,
without limitation, microfiche, microfilm, paper or computer disk) such
materials may be maintained or retained by or on behalf of Lessee (provided,
that all such materials shall be maintained in the English language); and such
term shall include, without limitation, the documents described in Section N of
Annex B to the Lease.

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

"Amortization Schedule" means, with respect to each Equipment Note,
the amortization schedule for such Equipment Note delivered pursuant to Section
2.02 of the Trust Indenture.

Annex A Special
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5

"Applicable Pass Through Trust" means each of the separate pass
through trusts created under the Applicable Pass Through Trust Agreements.

"Applicable Pass Through Trust Agreement" means each of the separate
Pass Through Trust Agreements by and between the Lessee and an Applicable Pass
Through Trustee.

"Applicable Pass Through Trustee" means each Pass Through Trustee that
is a party to the Participation Agreement.

"Appraiser" means a firm of internationally recognized, independent
aircraft appraisers.

"APU" means the auxiliary power unit installed on the Aircraft on the
Delivery Date, whether or not installed on the Aircraft from time to time
thereafter, unless title to such APU shall not be vested in Lessor in
accordance with Section 8.1 of the Lease, and any replacement or substituted
auxiliary power unit installed on the Aircraft in accordance with the Lease.

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.

"Base Lease Term" means the period beginning on and including the
Commencement Date and ending on the Scheduled

Annex A Special
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6

Expiration Date, or such earlier date on which the Term terminates in
accordance with the provisions of the Lease.

"Basic Rent" means the rent payable for the Aircraft pursuant to
Section 3.2.1(a) of the Lease.

"BFE" means all appliances, parts, instruments, appurtenances,
accessories, furnishings or other equipment of whatever nature sold by Lessee
to Owner Trustee pursuant to the BFE ▇▇▇▇ of Sale.

"BFE Amount" means the amount paid by Owner Trustee to Lessee to
purchase the BFE, and is designated by Dollar amount in Schedule 3 to the
Participation Agreement.

"BFE ▇▇▇▇ of Sale" means the full warranty ▇▇▇▇ of sale executed by
Lessee in favor of Owner Trustee, dated the Delivery Date, identifying and
covering the BFE.

"Bills of Sale" means the FAA ▇▇▇▇ of Sale, the Aircraft ▇▇▇▇ of Sale
and the BFE ▇▇▇▇ of Sale.

Annex A Special
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7

trust company or national banking association incorporated or doing business
under the laws of the United States or any state thereof having a combined
capital and surplus and retained earnings of at least $500,000,000 and having a
rate of "C" or better from the Thomson BankWatch Service; or (d) commercial
paper of any issuer doing business under the laws of the United States or one
of the states thereof and in each case having a rating assigned to such
commercial paper by Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service,
Inc. equal to A1 or higher.

"Citizen of the United States" is as defined in Section 40102(a)(15)
of the Act and in the FAA Regulations.

"Closing" means the closing of the transactions contemplated by the
Participation Agreement on the Delivery Date.

"Commencement Date" is defined in Schedule 1 to the Lease.

"Commitment" means, for any Participant, the amount of its
participation in the payment of Lessor's Cost, which amount shall be determined
in accordance with Section 2.1 of the Participation Agreement.

"Commitment Termination Date" is defined in Schedule 3 to the
Participation Agreement.

Annex A Special
647
8

"Consent and Agreement" means the Manufacturer Consent and Agreement
________, dated as of even date with the Participation Agreement, of Airframe
Manufacturer.

"Continuous Stay Period" is defined in Section 4.04(a) of the Trust
Indenture.

"CRAF" means the Civil Reserve Air Fleet Program established pursuant
to 10 U.S.C. Section 9511-13 or any similar substitute program.

"Damage Payment Threshold" is defined in Schedule 1 to the Lease.

Annex A Special
648
9

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

"Definitive Purchase Notice" is defined in Section 17.1 of the Lease.

"Deposit Agreement" means each of the four Deposit Agreements between
the Depositary and the Escrow Agent, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, provided that, for purposes of
any obligation of Lessee or Owner Trustee, no amendment, modification or
supplement to, or substitution or replacement of, any such Deposit Agreement
shall be effective unless consented to by Lessee.

"Depositary" means Credit Suisse First Boston, New York Branch, as
Depositary under each Deposit Agreement.

"Dollars," "United States Dollars" or "$" means the lawful currency of
the United States.

"DOT" means the Department of Transportation of the United States or
any Government Entity succeeding to the functions of such Department of
Transportation.

"Enforcement Date" is defined in Section 4.03 of the Trust Indenture.

Annex A Special
649
10

(b) any and all Parts incorporated or installed in or attached or appurtenant
to such engine, and any and all Parts removed from such engine, unless title to
such Parts shall not be vested in Lessor in accordance with Section 8.1 and
Annex C of the Lease. Upon substitution of a Replacement Engine under and in
accordance with the Lease, such Replacement Engine shall become subject to the
Lease and shall be an "Engine" for all purposes of the Lease and the other
Operative Agreements and thereupon the Engine for which the substitution is
made shall no longer be subject to the Lease, and such replaced Engine shall
cease to be an "Engine."

"Engine Consent and Agreement" means the Engine Manufacturer Consent
and Agreement dated as of even date with the Participation Agreement,
of Engine Manufacturer.

"Engine Manufacturer" means CFM International, a Delaware corporation.

"Equipment Note Register" is defined in Section 2.07 of the Trust
Indenture.

"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations and rulings issued thereunder all as amended and in effect from
time to time.

"Escrow Agent" means First Security Bank, National Association, as
Escrow Agent under each of the Escrow Agreements.

"Escrow Agreement" means each of the four Escrow and Paying Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial
purchasers of the Pass Through Certificates named therein and one of the Pass
Through Trustees, dated as of the Issuance Date, each of which relates to one
of the Pass Through Trusts, provided that, for purposes of any obligation of
Lessee or Owner Trustee, no amendment, modification or supplement to, or
substitution or replacement of, any such Escrow Agreement shall be effective
unless consented to by Lessee.

Annex A Special
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11

"Event of Default" is defined in Section 4.02 of the Trust Indenture.

"Event of Loss" means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect
to such property, for any reason whatsoever:

(a) the destruction of such property, damage to such property
beyond practical or economic repair or rendition of such
property permanently unfit for normal use;

(c) any loss of such property or loss of use of such property for
a period of 90 days or more as a consequence of any theft,
hijacking or disappearance of such property;

(d) any seizure, condemnation, confiscation, taking or requisition
of title to such property by any Government Entity or
purported non-U.S. Government Entity;

(e) any seizure, condemnation, confiscation, taking or requisition
of use of such property that continues until the earliest of
(i) the last day of the Term, (ii) the date upon which the
Aircraft is modified, altered or adapted in such a manner as
would render conversion of such property for use in normal
commercial passenger service impractical or uneconomical,
(iii) the date on which such property is operated or located
in any area excluded from coverage by any insurance policy
required to be maintained in respect of such property pursuant
to the Lease (unless an indemnity in lieu of insurance is
provided to Lessor and Mortgagee in accordance with Section
11.4 of the Lease) or (iv) the date that is 90 days following
the commencement of such loss of use (unless such loss of use
results from action by the U.S. Government, in

Annex A Special
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12

which case this clause (iv) shall not apply to such loss of
use); and

(f) as a result of any law, rule, regulation, order or any other
action by the Aviation Authority or by any Government Entity
of the government of registry of the Aircraft or by any
Government Entity otherwise having jurisdiction over the
operation or use of the Aircraft, the use of such property in
the normal course of Lessee's business of passenger air
transportation is prohibited for a period expiring on the
earlier to occur of (i) the last day of the Term or (ii) the
date that is 180 days following commencement of such
prohibition, provided that if Lessee, prior to the expiration
of such 180-day period, 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,
then the date that is 360 days following commencement of such
prohibition.

The date of such Event of Loss shall be the date of such loss, damage,
insurance settlement, seizure, condemnation, confiscation, taking or
requisition of title or use or prohibition, except that, for purposes of
clauses (c), (e) and (f) above, no Event of Loss shall be deemed to have
occurred until the date of expiration of the applicable period referred to
therein.

"Excluded Payments" means (i) indemnity payments paid or payable by
Lessee to or in respect of Owner Participant, or Owner Trustee in its
individual capacity, their respective Affiliates, successors and permitted
assigns and their directors, officers, employees, servants and agents pursuant
to Section 9 of the Participation Agreement or any corresponding payments under
the Lease or any comparable type of payments under any sublease, (ii) proceeds
of public liability insurance paid or payable as a result of insurance claims
made, or losses suffered, by Owner Trustee in its individual capacity or by
Owner Participant, that are payable directly to Owner Trustee in its individual
capacity, or Owner Participant, respectively, for their own account, (iii)
proceeds of insurance maintained with respect to the Aircraft by Owner
Participant or any Affiliate thereof for its or their own account or benefit
(whether directly or through Owner Trustee) and permitted under Section 11.3 of
the Lease, (iv) all payments

Annex A Special
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13

required to be made under the Tax Indemnity Agreement by Lessee whether or not
denominated as Supplemental Rent, (v) all payments, if any, required to be made
from the proceeds of collateral securing any obligation of Lessee to Owner
Participant or any Affiliate thereof (provided that no such payment shall in
any event constitute, or have the effect of, a release, discharge or
satisfaction in whole or in part of any obligation or liability of Lessee under
any of the Operative Agreements to make any payment or render any performance
to or for the benefit of any other Person (including, without limitation,
Lessee's obligation to pay certain Rent to the Mortgagee in accordance with
Section 13.3 of the Lease), (vi) any interest that pursuant to the Operative
Agreements may from time to time accrue in respect of any of the amounts
described in clauses (i) through (v) above, (vii) any right to enforce the
payment of any amount described in clauses (i) through (vi) above (provided,
that the rights referred to in this clause (vii) shall not be deemed to include
the exercise of any remedies provided for in the Lease other than the right to
▇▇▇ for specific performance of any covenant to make such payment or to ▇▇▇ for
damages in respect of the breach of any such covenant) and (viii) any right to
exercise any election or option or make any decision or determination, or to
give or receive any notice, consent, waiver or approval, or to take any other
action in respect of, but in each case, only to the extent relating to, any
Excluded Payments.

"Expenses" means any and all liabilities, obligations, losses,
damages, settlements, penalties, claims (including, without limitation, claims
or liabilities based or asserted upon (a) negligence, (b) strict or absolute
liability, (c) liability in tort, (d) infringement of patent, trademark or
other property or other right and (e) liabilities arising out of violation of
any Law), actions, suits, costs, expenses and disbursements (including, without
limitation, reasonable fees and disbursements of legal counsel, accountants,
appraisers, inspectors or other professionals, and costs of investigation),
including, without limitation, all such costs, expenses and disbursements
imposed on or incurred by any person in asserting or establishing, or in
defending any claims arising out of its assertion of, any rights it may have
under, or its cooperation in connection with any Expenses indemnified pursuant
to, Section 9 of the Participation Agreement.

Annex A Special
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14

"FAA" means the Federal Aviation Administration of the United States
or any Government Entity succeeding to the functions of such Federal Aviation
Administration.

"FAA Regulations" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.

"Fair Market Rental Value" means the fair market rental value in
Dollars for the Aircraft that would apply in an arm's-length transaction
between an informed and willing lessee under no compulsion to lease, and an
informed and willing lessor under no compulsion to lease, the Aircraft, for the
applicable period (if such fair market rental value is being determined for
purposes of Section 15 of the Lease) or for the applicable Renewal Lease Term,
as the case may be, assuming that (a) the Aircraft has been maintained in
accordance with, and is in the condition required by, the Lease (subject to
Section 15.4 of the Lease, if applicable), (b) payments of rent would be made
semiannually (if such fair market rental value is being determined for purposes
of Section 15 of the Lease) or quarterly (if such fair market rental value is
being determined for purposes of Section 17 of the Lease), and (c) the Aircraft
would be leased during any such Renewal Term on the same terms and conditions
as are set forth in the Lease with respect to the Base Lease Term.

Annex A Special
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15

15.4 of the Lease, if applicable) and (b) the Aircraft would be delivered to
such informed and willing buyer in the return condition required by the Lease.

"First Renewal Lease Term" means, if Lessee exercises its option to
renew the Lease at the end of the Base Lease Term pursuant to and in accordance
with Section 17.2 of the Lease, the period commencing on the first day
following the Scheduled Expiration Date, and ending on the First Renewal Term
Expiration Date or such earlier date on which the Term terminates in accordance
with the provisions of the Lease.

"First Renewal Term Expiration Date" means the first anniversary of
the Scheduled Expiration Date.

"First Security" means First Security Bank, National Association, a
national banking association, not in its capacity as Owner Trustee under the
Trust Agreement or as Escrow Agent under the Escrow Agreements, but in its
individual capacity.

"Fourth Renewal Lease Term" means, if Lessee exercises its option to
renew the Lease at the end of the Third Renewal Lease Term pursuant to and in
accordance with Section 17.2 of the Lease, the period commencing on the first
day following the Third Renewal Term Expiration Date, and ending on the fourth
anniversary of the Scheduled Expiration Date.

Annex A Special
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16

with respect to any person, shall mean such principles applied on a basis
consistent with prior periods except as may be disclosed in such person's
financial statements.

"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

"GTA" means the General Terms Agreement as defined in the Purchase
Agreement Assignment.

"Inclusion" is defined in the Tax Indemnity Agreement.

"Indemnitee" means (i) First Security and Owner Trustee, (ii) WTC and
Mortgagee, (iii) each separate or additional trustee appointed pursuant to the
Trust Agreement or the Trust Indenture, (iv) the Owner Participant and each
other Participant, (v) the Trust Estate and the Trust Indenture Estate, (vi)
the Subordination Agent, the Paying Agent and the Escrow Agent, (vii) the
Liquidity Providers, (viii) the Pass Through Trustees, (ix) each Affiliate of
the persons described in clauses (i) through (iv), inclusive, (x) each
Affiliate of the persons described in clauses (vi), (vii) and (viii), (xi) the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i) through (iv) inclusive and in clause (ix),
(xii) the respective directors, officers, employees, agents and servants of
each of the persons described in clauses (vi), (vii), (viii), and (x), (xiii)
the successors and permitted assigns of the persons described in clauses (i)
through (iv), inclusive, and in clauses (ix) and (xi), and (xiv) the successors
and permitted assigns of the persons described in clauses (vi), (vii), (viii),
(x) and (xii); provided that the persons described in clauses (vi), (vii),
(viii), (x), (xii) and (xiv) are Indemnitees only for purposes of Section 9.1
of the Participation Agreement. If any Indemnitee is Airframe Manufacturer or
Engine Manufacturer or any subcontractor or supplier of either thereof, such
Person shall be an Indemnitee only in its capacity as Owner Participant, Loan
Participant or Note Holder.

Annex A Special
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17

"Indenture Default" means any condition, circumstance, act or event
that, with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.

"Indenture Event of Default" means any one or more of the conditions,
circumstances, acts or events set forth in Section 4.02 of the Trust Indenture.

"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Pass Through Trustees, the Liquidity Providers and the Subordination
Agent, dated as of the Issuance Date, provided that, for purposes of any
obligation of Lessee or Owner Trustee, no amendment, modification or supplement
to, or substitution or replacement of, such Intercreditor Agreement shall be
effective unless consented to by Lessee.

"Interim Rent" is defined in Schedule 1 to the Lease.

"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.

"Issuance Date" means March 21, 1997.

Annex A Special
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18

"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.

"Lease" or "Lease Agreement" means the Lease Agreement ,
dated as of even date with the Participation Agreement, between Owner Trustee
and Lessee.

"Lease Default" means any condition, circumstance, act or event that,
with the giving of notice, the lapse of time or both, would constitute a Lease
Event of Default.

"Lease Event of Default" means any one or more of the conditions,
circumstances, acts or events set forth in Section 14 of the Lease.

"Lease Supplement" means a supplement to the Lease, in the form of
Exhibit A to the Lease.

"Lease Supplement No. 1" means the initial Lease Supplement, dated the
Delivery Date.

"Lessee" means Continental Airlines, Inc., a Delaware corporation.

"Lessee Person" means Lessee, any sublessee, assignee, successor or
other user or person in possession of the Aircraft, Airframe or an Engine with
or without color of right, or any Affiliate of any of the foregoing (other than
any Indemnitee or any related Indemnitee with respect thereto, or any person
using or claiming any rights with respect to the Aircraft, Airframe or an
Engine directly by or through any of the persons in this parenthetical).

"Lessee's Advisor" is defined in Schedule 3 to the Participation
Agreement.

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"Lessor" means Owner Trustee in its capacity as lessor under the
Lease.

"Lessor Lien" means, with respect to any person and in respect of any
property (including, without limitation, the Trust Estate, the Trust Indenture
Estate, the Aircraft, Airframe, Engines, Parts or Aircraft Documents) or any
payments, any Lien on such property or payments which (a) arises from claims
against such person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) not related to or arising out of,
directly or indirectly (i) its ownership of, Lien on or other interest in the
Aircraft, Airframe, Engines, Parts or Aircraft Documents or all or any other
part of the Trust Estate or Trust Indenture Estate or (ii) any of the
transactions contemplated by the Operative Agreements, (b) results from actions
taken by such person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) (i) in violation of such person's
obligations under any of the terms of the Operative Agreements, (ii) not
participated in or consented to by Lessee and (iii) not taken in connection
with or by reason of the occurrence of a Lease Default or a Lease Event of
Default, or (c) is imposed as a result of Taxes against such person (if such
person is a trustee, whether in its individual capacity or in its capacity as a
trustee) or any of its Affiliates not required to be indemnified by Lessee
under the Participation Agreement, the Tax Indemnity Agreement or any other
Operative Agreement; provided that for purposes of Sections 7.2.1 and 7.3.1 of
the Participation Agreement, any Lien that is attributable solely to Owner
Participant, First Security or Lessor and would otherwise constitute a Lessor
Lien thereunder shall not constitute a Lessor Lien thereunder, so long as (A)
the existence of such Lien poses no material risk of the sale, forfeiture or
loss of the Aircraft, Airframe or any Engine or any interest therein, (B) the
existence of such Lien does not interfere in any way with the use or operation
of the Aircraft by Lessee(or any Permitted Sublessee), (C) the existence of
such Lien does not affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Trust Indenture, (D) First Security, Lessor or
Owner Participant, as the case may be, is diligently contesting such Lien by
appropriate proceedings, (E) the existence of such Lien does not result in
actual interruption in the receipt and distribution by Mortgagee in accordance
with the Trust Indenture of Rent assigned to Mortgagee for the benefit of the
Note Holders, and (F) any property subject to such Lien is

Annex A Special
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not then required to be conveyed to any other Person pursuant to Section 4.6 of
the Lease.

"Lessor's Cost" means the aggregate of the amounts paid by Owner
Trustee to Airframe Manufacturer and Lessee to purchase the Aircraft and BFE
pursuant to the Purchase Agreement, the Purchase Agreement Assignment and the
Participation Agreement, and is designated by Dollar amount in Schedule 3 to
the Participation Agreement.

"Liability Deductible" is defined in Schedule 1 to the Lease.

"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease or security interest affecting the title to or any interest in property.

"Liquidity Facilities" means the eight Revolving Credit Agreements
(consisting of a separate Revolving Credit Agreement with each Liquidity
Provider with respect to each Pass Through Trust) between the Subordination
Agent, as borrower, and a Liquidity Provider, each dated as of the Issuance
Date, provided that, for purposes of any obligation of Lessee, no amendment,
modification or supplement to, or substitution or replacement of, any such
Liquidity Facility shall be effective unless consented to by Lessee.

"Loan Participants" mean, until the Closing shall have been
consummated, the Applicable Pass Through Trustees, and after the Closing shall
have been consummated, each Note Holder.

"Loan Trustee" means Mortgagee.

"Maintenance Program" is defined in Annex C to the Lease.

Annex A Special
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by Owner Trustee, Lessee, or Owner Participant or any Affiliate of any such
party or any interests of Owner Trustee or Owner Participant therein by reason
of subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by Owner Trustee, Lessee, Owner
Participant or any Affiliate of any thereof)); provided that for the purposes
of directing any action or casting any vote or giving any consent, waiver or
instruction hereunder any Note Holder of an Equipment Note or Equipment Notes
may allocate, in such Note Holder's sole discretion, any fractional portion of
the principal amount of such Equipment Note or Equipment Notes in favor of or
in opposition to any such action, vote, consent, waiver or instruction.

Annex A Special
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designated as such, or any successor publication, published by the Board of
Governors of the Federal Reserve System. The date of determination of a
Make-Whole Amount shall be the third Business Day prior to the applicable
payment or redemption date and the "most recent H.15(519)" means the H.15(519)
published prior to the close of business on the third Business Day prior to the
applicable payment or redemption date.

"Manufacturer's Purchase Price" means the amount required to be paid
to the Airframe Manufacturer to purchase the Aircraft pursuant to the Purchase
Agreement Assignment.

"Minimum Liability Insurance Amount" is defined in Schedule 1 to the
Lease.

"Minimum Residual Percentage" is defined in Schedule 1 to the Lease.

"Minimum Value Percentage" is defined in Schedule 1 to the Lease.

"Mortgaged Property" is defined in Section 3.03 of the Trust
Indenture.

"Mortgagee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as loan trustee under
the Trust Indenture.

Annex A Special
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23

period under Section 1110(a)(1)(A) of the Bankruptcy Code (or such longer
period as may apply under Section 1110(b) of the Bankruptcy Code) or (B) at any
time after agreeing to perform or assuming such obligations, such trustee or
the Lessee ceasing to perform such obligations with the result that the
Continuous Stay Period comes to an end or (ii) either the Equipment Notes shall
have become due and payable pursuant to Section 4.04(b) of the Trust Indenture
or Mortgagee has taken action or notified Owner Trustee that it intends to take
action to foreclose the Lien of the Trust Indenture or otherwise commence the
exercise of any significant remedy in accordance with Section 4.04(a) of the
Trust Indenture.

"Net Economic Return" means Owner Participant's net after-tax yield
and aggregate after-tax cash flow computed on the basis of the same methodology
and assumptions as were utilized by the initial Owner Participant in
determining Basic Rent, Stipulated Loss Value percentages and Termination Value
percentages as of the Delivery Date, as such assumptions may be adjusted for
events that have been the basis for adjustments to Basic Rent pursuant to
Section 3.2.1(b) of the Lease or events giving rise to indemnity payments
pursuant to Section [6(A)] of the Tax Indemnity Agreement; provided, that, if
the initial Owner Participant shall have transferred its interest, Net Economic
Return shall be calculated as if the initial Owner Participant had retained its
interest; provided further, that, notwithstanding the preceding proviso, solely
for purposes of Section 11 of the Participation Agreement and calculating any
adjustments to Basic Rent, Stipulated Loss Values and Termination Values in
connection with a refunding pursuant to such Section 11 at a time when Owner
Participant is a transferee (other than an Affiliate of the initial Owner
Participant), the after-tax yield (but not the after-tax cash flow) component
of Net Economic Return shall be calculated on the basis of the methodology and
assumptions utilized by the transferee Owner Participant as of the date on
which it acquired its interest.

"Net Present Value of Rents" means the present value, as of the date
of determination, discounted at ten percent per annum, compounded semiannually
to the date of determination, of all unpaid Basic Rent payments during the
then-remaining portion of the Base Lease Term, expressed as a percentage of
Lessor's Cost.

"Net Worth" means, for any person, the excess of its total assets over
its total liabilities.

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"New Debt" means debt securities in an aggregate principal amount
specified in the Refunding Information, which amount shall be no greater than
the aggregate principal amount of all Equipment Notes outstanding on the
Refunding Date.

"Non-U.S. Person" means any Person other than a United States person,
as defined in Section 7701(a)(30) of the Code.

"Note Holder" means at any time each registered holder of one or more
Equipment Notes.

"Operative Indentures" means each of the indentures under which notes
have been issued and purchased by the Pass Through Trustees pursuant to the
Note Purchase Agreement.

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that if an Owner Participant Transfers 100% of its interest to a successor
Owner Participant, such transferring Owner Participant shall thereafter no
longer be considered an "Owner Participant".

"Owner Participant's Percentage" means the percentage of Lessor's Cost
allocated to the Owner Participant in Schedule 2 to the Participation
Agreement.

"Owner Trustee" means First Security Bank, National Association, a
national banking association, not in its individual capacity, except as
expressly provided in any Operative Agreement, but solely as Owner Trustee
under the Trust Agreement.

"Participants" means, collectively, Owner Participant and each Loan
Participant and "Participant" means Owner Participant or a Loan Participant,
individually.

"Participation Agreement" means the Participation Agreement
dated as of among Lessee, Owner Participant, Owner Trustee, the
Applicable Pass Through Trustees, Subordination Agent and Mortgagee.

"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (including, without limitation, all BFE, avionics, the APU and Passenger
Convenience

Annex A Special
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26

Equipment, but excluding Engines or engines) that may from time to time be
installed or incorporated in or attached or appurtenant to the Airframe or any
Engine; provided that the term "Parts" shall not be deemed to include any
Passenger Convenience Equipment if and for so long as such Equipment shall be
owned by, or shall be subject to a security interest, license or other interest
of, another Person (other than any Affiliate of Lessee) as provided under
Section D.3 of Annex C to the Lease.

"Passenger Convenience Equipment" means components or systems
installed on or affixed to the Airframe that are used to provide individual
telecommunications or electronic entertainment to passengers aboard the
Aircraft.

"Pass Through Certificates" means the pass through certificates issued
by the Pass Through Trusts (and any other pass through certificates for which
such pass through certificates may be exchanged).

"Pass Through Trust" means each of the four separate pass through
trusts created under the Pass Through Trust Agreements.

"Pass Through Trust Agreement" means each of the four separate pass
through trust agreements dated as of the Issuance Date by and between the
Lessee and a Pass Through Trustee.

"Pass Through Trustee" means Wilmington Trust Company, a Delaware
banking corporation, in its capacity as trustee under each Pass Through Trust
Agreement.

"Payment Date" means (i) each April 1 and October 1 during the Base
Lease Term, commencing with the first such date to occur after the Commencement
Date and (ii) each January 1, April 1,

Annex A Special
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27

July 1 and October 1 during any Renewal Lease Term, commencing with the first
day of such Renewal Lease Term.

"Payment Due Rate" is defined in Schedule 1 to the Lease.

"Payment Period" means (i) each of the consecutive semiannual periods
during the Base Lease Term ending on a Payment Date, the first such period
commencing on and including the Commencement Date and (ii) each of the
consecutive three month periods during any Renewal Lease Term commencing with a
Payment Date, the first such period commencing on and including the first
Payment Date in such Renewal Lease Term.

"Paying Agent" means Wilmington Trust Company, as Paying Agent under
each of the Escrow Agreements.

"Permitted Air Carrier" means any U.S. Air Carrier or any air carrier
listed on Schedule 5 to the Lease.

"Permitted Institution" means (a) any bank, trust company, insurance
company, finance or leasing corporation, financial institution or other person
(other than, without Lessee's consent, a commercial air carrier or Affiliate
thereof that is in direct competition with Lessee), in each case with a
combined capital and surplus or net worth of at least $50,000,000 or (b) any
Affiliate of any person described in clause (a) in respect of which such person
has provided a written guarantee of the obligations assumed by such Affiliate
under the Owner Participant Agreements in form and substance reasonably
satisfactory to Lessee and, if at the time of Transfer to such Permitted
Institution an Event of Default that is not also, and is not caused by, a Lease
Event of Default has occurred and is continuing, to Mortgagee.

"Permitted Lien" means any Lien described in clauses (a) through (f),
inclusive, of Section 6 of the Lease.

"Permitted Sublease" means a sublease permitted under Section 7.2.7 of
the Lease.

"Permitted Sublessee" means the sublessee under a Permitted Sublease.

"Persons" or "persons" means individuals, firms, partnerships, joint
ventures, trusts, trustees, Government Entities, organizations, associations,
corporations, government

Annex A Special
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28

agencies, committees, departments, authorities and other bodies, corporate or
incorporate, whether having distinct legal status or not, or any member of any
of the same.

"Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA, and any plan within the meaning of Section 4975(e)(1) of the
Code.

"Preliminary Notice" is defined in Section 17.1 of the Lease.

"Premium Termination Date" means April 1, 2010, in the case of the
Series A Equipment Notes, April 1, 2007 in the case of the Series B Equipment
Notes and April 1, 2003 in the case of the Series C Equipment Notes.

"PTT Percentage" means, with respect to each Applicable Pass Through
Trustee, the percentage of Lessor's Cost allocated to such Pass Through Trustee
in Schedule 2 to the Participation Agreement.

"Purchase Agreement" means the Purchase Agreement between
Airframe Manufacturer and Lessee (including all exhibits thereto, together with
all letter agreements entered into that by their terms constitute part of such
Purchase Agreement), to the extent assigned pursuant to the Purchase Agreement
Assignment.

"Purchase Agreement Assignment" means the Purchase Agreement and
Engine Warranties Assignment , dated as of even date with the
Participation Agreement, between Lessee and Owner Trustee.

"Purchase Date" means the last Business Day of the Base Lease Term or
any Renewal Lease Term, as specified in any Purchase Notice.

"Purchase Notice" is defined in Section 17.3.1 of the Lease.

"QIB" is defined in Section 2.08 of the Trust Indenture.

Annex A Special
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29

Agreement: (i) the principal amount of debt to be issued by Owner Trustee on
the Refunding Date and (ii) the proposed revised schedules of Basic Rent,
Stipulated Loss Value percentages and Termination Value percentages and the
proposed Amortization Schedules.

"Refunding Date" means the proposed date on which the outstanding
Equipment Notes will be redeemed and refinanced pursuant to Section 11 of the
Participation Agreement.

"Renewal Lease Term" means, collectively, the First Renewal Lease
Term, the Second Renewal Lease Term, the Third Renewal Lease Term and the
Fourth Renewal Lease Term, in each case, if any.

"Renewal Notice" is defined in Section 17.2.1 of the Lease.

"Renewal Rent" for the Aircraft means the rent payable therefor in
respect of a Renewal Lease Term determined pursuant to Section 17.2.2 of the
Lease.

"Rent" means, collectively, Interim Rent, Basic Rent, Renewal Rent and
Supplemental Rent.

"Replacement Airframe" means any airframe substituted for the Airframe
pursuant to Section 10 of the Lease.

"Replacement Engine" means an engine substituted for an Engine
pursuant to Section 5.3, 7.2, 9 or 10 of the Lease.

"Return Acceptance Supplement" means a Return Acceptance Supplement,
dated as of the date the Aircraft is returned to

Annex A Special
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30

Lessor pursuant to Section 5 of the Lease, by Lessor and Lessee substantially
in the form of Exhibit B to the Lease.

"Scheduled Expiration Date" means the Business Day (or, for purposes
of any Renewal Lease Term, the day) next preceding the th anniversary of the
Commencement Date.

"SEC" means the Securities and Exchange Commission of the United
States, or any Government Entity succeeding to the functions of such Securities
and Exchange Commission.

"Second Renewal Lease Term" means, if Lessee exercises its option to
renew the Lease at the end of the First Renewal Lease Term pursuant to and in
accordance with Section 17.2 of the Lease, the period commencing on the first
day following the First Renewal Term Expiration Date, and ending on the Second
Renewal Term Expiration Date or such earlier date on which the Term terminates
in accordance with the provisions of the Lease.

"Second Renewal Term Expiration Date" means the second anniversary of
the Scheduled Expiration Date.

"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor or analogous section of the federal bankruptcy Law in effect from
time to time.

"Secured Obligations" is defined in Section 2.06 of the Trust
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

"Security" means a "security" as defined in Section 2(1) of the
Securities Act.

"Senior Holder" is defined in Section 2.14(c) of the Trust Indenture.

"Series" means any of Series A, Series B or Series C.

Annex A Special
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31

"Similar Aircraft" is defined in Schedule 1 to the Lease.

"SLV Rate" is defined in Schedule 1 to the Lease.

"Stipulated Loss Value" means, with respect to the Aircraft, (a)
during the Interim Lease Term or the Base Lease Term, the amount determined by
multiplying (i) the percentage set forth in Schedule 3 to the Lease (as
adjusted from time to time in accordance with Section 3.2.1 of the Lease)
opposite the Stipulated Loss Value Date as of which Stipulated Loss Value is
required to be computed by (ii) Lessor's Cost and (b) during any Renewal Term,
the amount determined pursuant to Section 17.2.3 of the Lease. Notwithstanding
anything to the contrary in any Operative Agreement, Stipulated Loss Value
shall always be sufficient to pay in full, as of the date of payment thereof
(assuming timely payment of the Equipment Notes prior to such date), the
aggregate unpaid principal amount of all Equipment Notes outstanding as of such
date, together with accrued and unpaid interest on all such Equipment Notes as
of such date.

"Stipulated Loss Value Date" means, for any month, the day in such
month specified in Schedule 3 to the Lease or, if such day is not a Business
Day, the immediately succeeding Business Day.

"Subordination Agent" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement.

Annex A Special
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32

"Subordination Agent Agreements" means the Participation Agreement,
the Liquidity Facilities and the Intercreditor Agreement.

"Supplemental Rent" means, without duplication (a) all Expenses,
Transaction Expenses and all other amounts, liabilities, indemnities and
obligations (other than Interim Rent, Basic Rent or Renewal Rent but including
Make-Whole Amount, if any) that Lessee assumes or becomes obligated to or
agrees to pay under any Lessee Operative Agreement to or on behalf of Lessor or
any other person, including, without limitation, payments of Stipulated Loss
Value, Termination Value and payments of indemnities under Section 9 of the
Participation Agreement, (b) (i) to the extent not payable (whether or not in
fact paid) under Section 6(a) of the Note Purchase Agreement (as originally in
effect or amended with the consent of the Owner Participant), an amount or
amounts equal to the fees payable to the relevant Liquidity Provider under
Section 2.03 of each Liquidity Facility and the related Fee Letter (as defined
in the Intercreditor Agreement) multiplied by a fraction the numerator of which
shall be the then outstanding aggregate principal amount of the Series A
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal amount
of all "Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement); (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) the amount equal to
interest on any Non-Extension Advance (other than any Applied Non-Extension
Advance) payable under Section 3.07 (a)(i) of each Liquidity Facility minus
Investment Earnings from such Non-Extension Advance multiplied by (y) the
fraction specified in the forgoing clause (i); (iv) if any payment default
shall have occurred and be continuing with respect to interest on any Series A
Equipment Notes, Series B Equipment Notes or Series C Equipment Notes, (x) the
excess, if any, of (1) an amount equal to interest on any Unpaid Advance,
Applied Downgrade Advance or Applied Non-Extension Advance payable under
Section 3.07(a)of each Liquidity Facility over (2) the sum of Investment
Earnings from any Final Advance plus any amount of interest at the Payment Due
Rate actually payable (whether or not in fact paid) by Owner Trustee

Annex A Special
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33

on the overdue scheduled interest on the Equipment Notes in respect of which
such Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
was made multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and
the denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (each as defined in the Note Purchase Agreement)
(other than interest becoming due and payable solely as a result of
acceleration of any such "Equipment Notes"); and (v) the Pro Rata Share of any
other amounts owed to the Liquidity Providers by the Subordination Agent as
borrower under each Liquidity Facility (other than amounts due as repayment of
advances thereunder or as interest on such advances), except to the extent
payable pursuant to clause (ii), (iii) or (iv) above), (c) the Pro Rata Share
of all compensation and reimbursement of expenses, disbursements and advances
payable by Lessee under the Pass Through Trust Agreements, (d) the Pro Rata
Share of all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement except
with respect to any income or franchise taxes incurred by the Subordination
Agent in connection with the transactions contemplated by the Intercreditor
Agreement and (e) in the event Lessee requests any amendment to any Operative
Agreement or Pass Through Agreement, the Pro Rata Share of all reasonable fees
and expenses (including, without limitation, fees and disbursements of counsel)
of the Escrow Agents and the Paying Agents in connection therewith payable by
the Pass Through Trustees under the Escrow Agreements. As used herein, the
"Pro Rata Share" means as of any time a fraction, the numerator of which is the
principal balance then outstanding of Equipment Notes and the denominator of
which is the aggregate principal balance then outstanding of all "Equipment
Notes" (as such term is defined in each of the Operative Indentures). For
purposes of this definition, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Cash Collateral Account", "Downgrade Advance", "Final
Advance", "Investment Earnings", "Non-Extension Advance", and "Unpaid Advance"
shall have the meanings specified in each Liquidity Facility.

Annex A Special
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34

"Tax Attribute Period" is defined in the Tax Indemnity Agreement.

"Tax Indemnitee" means (a) First Security and Owner Trustee, (b) WTC
and Mortgagee, (c) each separate or additional trustee appointed pursuant to
the Trust Agreement or the Trust Indenture, (d) the Owner Participant and each
other Participant, (e)each Pass Through Trustee, (f) the Trust Estate and the
Trust Indenture Estate and (g) the respective successors, assigns, agents and
servants of the foregoing. For purposes of this definition, the term "Owner
Participant" shall include any member of an affiliated group (within the
meaning of Section 1504 of the Code) of which Owner Participant is, or may
become, a member if consolidated, joint or combined returns are filed for such
affiliated group for federal, state or local income tax purposes. If the Tax
Indemnitee is the Airframe Manufacturer or Engine Manufacturer, such Person
shall be a Tax Indemnitee only in its capacity as Owner Participant, Loan
Participant or Note Holder.

"Tax Indemnity Agreement" means the Tax Indemnity Agreement, dated as
of even date with the Participation Agreement, between Lessee and Owner
Participant.

"Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.

"Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.

Annex A Special
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35

necessary to accommodate usage of the Aircraft or Airframe pursuant to CRAF
plus six months thereafter, and Lessee shall be obligated to pay Basic Rent
with respect to any such period of extension at the conclusion of such period
of extension at a semiannual rate equal to the average of the Basic Rent paid
during the Base Lease Term or the applicable Renewal Lease Term, whichever
shall have ended immediately prior to such extension.

"Termination Date" means any Payment Date occurring after the tenth
anniversary of the Delivery Date and on or before the date one year prior to
the Scheduled Expiration Date on which the Lease shall terminate in accordance
with Section 9 of the Lease.

"Termination Value" means, with respect to the Aircraft, the amount
determined by multiplying (a) the percentage set forth in Schedule 4 to the
Lease (as adjusted from time to time in accordance with Section 3.2.1 of the
Lease) opposite the Termination Value Date as of which Termination Value is
required to be computed by (b) Lessor's Cost. Notwithstanding anything to the
contrary in any Operative Agreement, Termination Value shall always be
sufficient to pay in full, as of the date of payment thereof (assuming timely
payment of the Equipment Notes prior to such date), the aggregate unpaid
principal amount of all Equipment Notes outstanding as of such date, together
with accrued and unpaid interest on all such Equipment Notes as of such date.

"Termination Value Date" means, for any month, the day in such month
specified in Schedule 4 to the Lease or, if such day is not a Business Day, the
immediately succeeding Business Day.

"Third Renewal Lease Term" means, if Lessee exercises its option to
renew the Lease at the end of the Second Renewal Lease Term pursuant to and in
accordance with Section 17.2 of the Lease, the period commencing on the first
day following the Second Renewal Term Expiration Date, and ending on the third
anniversary of the Scheduled Expiration Date.

"Third Renewal Term Expiration Date" means the third anniversary of
the Scheduled Expiration Date.

"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Agreements.

Annex A Special
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36

"Transaction Expenses" means: (i) the reasonable and actual fees,
expenses and disbursements of (1) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel
for Mortgagee, such information to be furnished by Mortgagee, (2) Ray, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, special counsel for the Owner Trustee under the Trust Agreement,
such information to be furnished by Owner Trustee, (3) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, special counsel to the Loan Participants, such information to be
furnished by the Subordination Agent, (4) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to Lessee, such information to be furnished by Lessee, and (5) ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel in Oklahoma City, Oklahoma, such information to
be furnished by Lessee, (ii) all fees, taxes and other charges payable in
connection with the recording or filing of instruments and financing
statements, such information to be furnished by Lessee, (iii) the initial fee
and reasonable and actual disbursements of Owner Trustee under the Trust
Agreement, such information to be furnished by the Owner Trustee, (iv) the
initial fee and reasonable and actual disbursements of Mortgagee under the
Trust Indenture, such information to be furnished by Mortgagee, (v) the fee of
the Appraiser with respect to the appraisal of the Aircraft referred to in
Section 5.1.2(xv) of the Participation Agreement, such information to be
furnished by the Owner Participant, and (vi) the equity placement fee and
reasonable disbursements of Lessee's Advisor, such information to be furnished
by Lessee.

"Transfer" means the transfer, sale, assignment or other conveyance of
all or any interest in any property, right or interest.

"Trust" means the trust created by the Trust Agreement.

"Trust Agreement" means the Trust Agreement , dated as of even
date with the Participation Agreement, between Owner Participant and Owner
Trustee.

Annex A Special
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37

"Trust Estate" means all estate, right, title and interest of Owner
Trustee in and to the Aircraft, the Lease, any Lease Supplement and the
Purchase Agreement including, without limitation, all amounts of Basic Rent and
Supplemental Rent including, without limitation, insurance proceeds (other than
insurance proceeds payable to or for the benefit of Owner Participant, Note
Holders or WTC) and requisition, indemnity or other payments of any kind for or
with respect to the Aircraft (except amounts owing to Owner Participant, Note
Holders or WTC, or to any of their respective directors, officers, employees,
servants and agents, pursuant to Section 9 of the Participation Agreement).
Notwithstanding the foregoing, "Trust Estate" shall not include any Excluded
Payment.

"Trust Indenture" means the Trust Indenture and Mortgage
_____________, dated as of even date with the Participation Agreement, between
Owner Trustee and Mortgagee.

"Trust Indenture Estate" is defined in the "Granting Clause" of the
Trust Indenture.

"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

Annex A Special
677
38

"U.S. Person" means any Person described in Section 7701(a)(30) of the
Code.

"Wet Lease" means any arrangement whereby Lessee agrees to furnish the
Airframe and Engines or engines installed thereon to a third party pursuant to
which the Airframe and such Engines or engines (i) shall at all times be in the
sole possession and control of Lessee, (ii) shall be operated in all respects
solely by regular employees of Lessee possessing all current certificates and
licenses that are required under the Act or any FAA Regulations for the
possession, use and operation of the Airframe and such Engines or engines (or,
if the Airframe is then under foreign registration, in accordance with Section
7.1.2 of the Lease, the foregoing requirement shall apply in respect of all
certificates and licenses required by such government of registration and the
applicable Aviation Authority for the possession, use and operation of the
Airframe and such Engines or engines), and (iii) shall in all events be
maintained, insured and otherwise used and operated in compliance with the
terms and provisions of the Lease.

"WTC" means Wilmington Trust Company, a Delaware banking corporation,
not in its capacity as Mortgagee under the Trust Indenture, but in its
individual capacity.

Annex A Special
678

SCHEDULE 1
TO
PARTICIPATION AGREEMENT

ACCOUNTS; ADDRESSES

ACCOUNT FOR PAYMENTS ADDRESS FOR NOTICES
-------------------- -------------------

[OMITTED]

SCHEDULE 1 PARTICIPATION AGREEMENT SPECIAL PAGE 1

679

SCHEDULE 2
TO
PARTICIPATION AGREEMENT

COMMITMENTS

PERCENTAGE OF LESSOR'S
----------------------
PARTICIPANT COST DOLLAR AMOUNT
-------------------- ---------------------- -------------

OWNER PARTICIPANT OWNER PARTICIPANT'S
PERCENTAGE

PASS THROUGH TRUSTEE LOAN PARTICIPANT'S
PTT PERCENTAGE

TOTAL 100%

SCHEDULE 3 PARTICIPATION AGREEMENT SPECIAL PAGE 1

680

SCHEDULE 3
TO
PARTICIPATION AGREEMENT

CERTAIN TERMS

DEFINED TERM DEFINITION
------------ -------------

BFE Amount $
-------------

Commitment Termination Date
-------------

Lessee's Advisor
-------------

Lessor's Cost $
-------------

Special Counsel to the Owner Participant

SCHEDULE 5 PARTICIPATION AGREEMENT SPECIAL PAGE 1
681

EXHIBIT A

[Form of Opinion of Lessee's Special Counsel]

_________________

To the Persons Listed on Schedule I
Attached Hereto

Re: Lease of Boeing Model _________Aircraft with Manufacturer's
Serial Number _______ _ and U.S. Registration
Number N______________________________________________

Gentlemen:

In connection with this opinion letter we have examined, among
other things, originals or copies certified or otherwise identified to our
satisfaction of the following documents:

(i) Participation Agreement;
(ii) Lease;
682

I. In giving an opinion regarding the valid existence
and good standing of the Company, we have relied solely upon certificates of
public officials.

Based on and subject to the foregoing, we are of the opinion
that:

1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.

3. Each Company Document constitutes the valid and
binding obligation of the Company and is enforceable against the Company in
accordance with its terms.

Very truly yours,
687

SCHEDULE I

__________________________, as Owner Participant

First Security Bank, National Association, individually and as Owner Trustee

Wilmington Trust Company, individually, as Mortgagee, and as Loan Participant

ABN AMRO Bank N.V., Chicago Branch as Liquidity Provider

ING Bank N.V., as Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

688
EXHIBIT B

[Form of Opinion of Lessee's Legal Department]

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

To the Persons
Listed on
Schedule I Hereto

Re: Lease of Boeing Model ____________Aircraft with Manufacturer's
Serial Number and U.S. Registration Number N

Ladies and Gentlemen:

interpreted to impute knowledge of others (other than members of Continental's
Legal Department).

Based on the foregoing, and subject to the assumptions and
limitations contained herein, Continental's Legal Department is of the opinion
that:

Very truly yours,

Continental Airlines, Inc.
Legal Department
691

SCHEDULE I

_____________________, as Owner Participant

First Security Bank, National Association, individually and as Owner Trustee

Wilmington Trust Company, individually and as Mortgagee and Loan Participant

ABN AMRO Bank N.V., as a Liquidity Provider

ING Bank N.V., as a Liquidity Provider

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

692
EXHIBIT D

[Form of Owner Trustee Counsel's Opinion]

TO EACH OF THE PARTIES SET FORTH
IN SCHEDULE A HERETO:

Re: Continental Airlines, Inc. 1997-1 Pass
Through Certificates

Dear Sir or Madam:

Based upon the foregoing, we are of the opinion that:

Agreement to which it, in its individual capacity or as Owner Trustee, as the
case may be, is a party and, as Owner Trustee, to issue, execute, and deliver
and perform the Equipment Notes.

the case may be, performs certain of its obligations under the Operative
Documents in the State of Utah.

695
4

the laws of the State of Utah or the Owner Trustee's performance of its duties
under the Trust Agreement within such State.

The foregoing opinions are subject to the following assumptions, exception and
qualifications:

696
5

F. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment involved in these transactions.

H. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.

697
6

Very truly yours,

698
7

SCHEDULE A

First Security Bank, National Association

Continental Airlines, Inc.

Wilmington Trust Company, individually and as Loan Participant and
Mortgagee

[Owner Participant]

Standard & Poor's Rating Services

▇▇▇▇▇'▇ Investors Services, Inc.

ABN AMRO Bank N.V.

ING Bank N.V.

699
EXHIBIT E

[FORM OF WTC COUNSEL'S OPINION]

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

To Each of the Parties Listed
on Schedule A Hereto

Re: Continental Airlines, Inc. - Financing of One Boeing Model
Aircraft Bearing Manufacturer's Serial Number

Ladies and Gentlemen:

We have examined originals or copies of the following documents:

(a) The Trust Indenture and the initial Trust Indenture Supplement;

(b) The Participation Agreement (the documents referred to in
paragraphs (a) and (b) above being collectively referred to as
the "Mortgagee Documents"); and

We have also examined originals or copies of such other documents and such
corporate records, certificates and other
700
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 2

4. None of the execution and delivery by the Mortgagee, the
Subordination Agent, the Applicable Pass Through Trustee or WTC, as the case
may be, of the Mortgagee Documents to which it is a party, the authentication
of the Equipment Notes or the consummation of any of the transactions by the
Mortgagee, the Subordination Agent, the Applicable Pass Through Trustee or WTC,
as the case may be, contemplated thereby, requires the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action in respect of, any governmental authority or agency of the State of
Delaware or the United States governing the banking or trust powers of WTC or
under any Delaware law.
701
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 3

6. The Equipment Notes have been duly and validly authenticated by
the Mortgagee in accordance with the Trust Indenture.

The foregoing opinions are subject to the following assumptions,
exceptions and qualifications:

A. We are admitted to practice law in the State of Delaware and we
do not hold ourselves out as being experts on the law of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Delaware (and its political subdivisions to the extent set forth in paragraph
5, above) and the federal laws of the United States of America governing the
banking or trust powers of WTC, except that we express no opinion with respect
to (i) federal securities laws, including the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the Investment
Company Act of 1940, as amended, and the Trust Indenture Act of 1939, as
amended, (ii) Part A of Subtitle VII of Title 49 of the United States Code, as
amended (except with respect to the opinion set forth in paragraph 1 above
concerning the citizenship of WTC), (iii) the Federal Communications Act of
1934, as amended, (iv) state securities or blue sky laws, or (v) laws, rules
and regulations applicable to the particular nature of the equipment acquired
by the Company. Insofar as the foregoing opinions relate to the validity and
enforceability of the Mortgagee Documents expressed to be governed by the laws
of the State of New York, we have assumed that each such document is legal,
valid, binding and enforceable in accordance with its terms under such laws (as
to which we express no opinion).
702
To Each of the Parties Listed
on Schedule A Hereto

------------------
Page 4

E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.

F. No opinion is expressed as to the creation, attachment,
perfection or priority of any mortgage or security interests or as to the
nature or validity of title to any part of the Mortgaged Property.

Very truly yours,
703

SCHEDULE A

Mortgagee
---------
Wilmington Trust Company

Loan Participant
----------------
Wilmington Trust Company

Owner Trustee
-------------
First Security Bank, National Association

Owner Participant
-----------------

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

Lessee
------
Continental Airlines, Inc.

Liquidity Providers
-------------------
ABN AMRO Bank N.V., Chicago Branch
ING Bank N.V.

Rating Agencies
---------------

Standard & Poor's Ratings Services
▇▇▇▇▇'▇ Investors Service, Inc.

704
EXHIBIT I

[Form of FAA Counsel Opinion]

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

Re: Continental Airlines. Inc. (the "Lessee")

To the Addressees on
Exhibit A Attached Hereto

Ladies and Gentlemen:

(e) the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with respect
to the Aircraft and the Engines are perfected;

707
4

Very truly yours,

▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

708
5

EXHIBIT A

MORTGAGEE, SUBORDINATION AGENT
AND LOAN PARTICIPANT

Wilmington Trust Company

OWNER TRUSTEE

First Security Bank, National Association

OWNER PARTICIPANT

-----------------------

LESSEE

Continental Airlines, Inc.

LIQUIDITY PROVIDERS

ABN AMRO Bank, N.V., Chicago Branch

ING Bank, N.V.

RATING ENTITIES

▇▇▇▇▇'▇ Investors Service, Inc.

Standard & Poor's Ratings Group

709

EXHIBIT D-2 to
Note Purchase Agreement

FORM OF SPECIAL LEASE

710

-------------------------------------------------------------------------------
CONFIDENTIAL: ANNEXES B, C AND D AND SCHEDULES 1, 2, 3 AND 4 OF THIS
LEASE AGREEMENT ARE SUBJECT TO RESTRICTIONS ON DISSEMINATION
SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN)
-------------------------------------------------------------------------------

LEASE AGREEMENT ______

Dated as of _____________

Between

FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
Not in its Individual Capacity,
except as expressly provided herein,
but solely as Owner Trustee,

Lessor

and

CONTINENTAL AIRLINES, INC.,

Lessee
--------------------------------------------------------

One Boeing Model __________ Aircraft
Bearing United States Registration No. _______ and
Bearing Manufacturer's Serial No. _______
with two CFM Model 56-3-B1 Engines
Bearing Engine Manufacturer's Serial Nos. ______ and ______
=============================================================

The right, title and interest of Lessor in and to, among other things, this
Lease Agreement has been assigned to and is subject to a security interest in
favor of Wilmington Trust Company, a Delaware banking corporation, as
Mortgagee, under the Trust Indenture and Mortgage , dated as of , for the
benefit of the holders of the Equipment Notes referred to in such Trust
Indenture, all to the extent provided in such Trust Indenture. This Lease
Agreement has been executed in multiple counterparts; to the extent, if any,
that this Lease Agreement constitutes chattel paper (as defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in Lessor's right, title and interest in and to this Lease Agreement
may be perfected through the delivery or possession of any counterpart of this
Lease Agreement other than the counterpart of this Lease Agreement that
contains the original receipt executed by Wilmington Trust Company, as
Mortgagee.

LEASE AGREEMENT SPECIAL PAGE 1
711

CONTENTS

Page

SECTION 1. DEFINITIONS AND CONSTRUCTION............................. 1
1.1 Definitions.............................................. 1
1.2 Finance Lease Parties.................................... 1

SECTION 2. DELIVERY AND ACCEPTANCE.................................. 2
2.1 Delivery and Lease of Aircraft........................... 2
2.2 Acceptance by Lessee..................................... 2

SECTION 3. TERM AND RENT............................................ 2
3.1 Term..................................................... 2
3.2 Rent..................................................... 3
3.2.1 Interim Rent; Basic Rent; Adjustments
to Basic Rent, Stipulated Loss Value
and Termination Value............................. 3
3.2.2 Supplemental Rent................................. 5
3.3 Payments................................................. 6

SECTION 4. DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR;
SECTION 1110 MATTERS..................................... 7
4.1 Computation of Stipulated Loss and Termination Values.... 7
4.2 Disclaimer............................................... 7
4.3 Certain Agreements of Lessor............................. 8
4.4 Quiet Enjoyment.......................................... 9
4.5 Investment of Funds Held as Security..................... 9
4.5.1 Investment........................................ 9
4.5.2 Payment of Gain or Loss........................... 9
4.5.3 Limitation of Liability........................... 10
4.6 Title Transfers by Lessor................................ 10
4.7 Lessor's Interest in Certain Engines..................... 11
4.8 Lease For U.S. Federal Income Tax Law Purposes;
Section 1110 of Bankruptcy Code.......................... 11

SECTION 5. RETURN OF AIRCRAFT....................................... 12
5.1 Compliance with Annex B.................................. 12
5.2 Storage and Related Matters.............................. 12
5.3 Return of Other Engines.................................. 13
5.4 Failure to Return Aircraft............................... 13

LEASE AGREEMENT SPECIAL PAGE i
712
SECTION 6. LIENS.................................................... 13

SECTION 7. REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND
RECORDS.................................................. 15
7.1 Registration and Operation............................... 15
7.1.1 Registration and Recordation...................... 15
7.1.2 Reregistration.................................... 15
7.1.3 Markings.......................................... 15
7.1.4 Compliance With Laws.............................. 16
7.1.5 Operation......................................... 17
7.2 Possession............................................... 17
7.2.1 Interchange and Pooling........................... 17
7.2.2 Testing and Service............................... 18
7.2.3 Civil Reserve Air Fleet Program................... 18
7.2.4 Installation of Engines on Owned Aircraft......... 19
7.2.5 Installation of Engines on Other Airframes........ 19
7.2.6 Installations of Engines on Financed Aircraft..... 20
7.2.7 Subleasing........................................ 20
7.2.8 Transfer to U.S. Government....................... 23
7.3 Certain Limitations on Subleasing or Other
Relinquishment of Possession............................. 23

SECTION 8. MAINTENANCE; REPLACEMENT AND POOLING OF
PARTS; ALTERATIONS, MODIFICATIONS AND
ADDITIONS; OTHER LESSEE COVENANTS........................ 24
8.1 Maintenance; Replacement and Pooling of
Parts; Alterations, Modifications
and Additions............................................ 24
8.2 Information, Certificates, Notices and Reports........... 25
8.2.1 Financial Information............................. 25
8.2.2 Annual Certificate................................ 26
8.2.3 SEC Reports....................................... 26
8.2.4 Notice of Default................................. 26
8.2.5 Information for Filings........................... 27
8.2.6 Other Information................................. 27
8.3 Certain Agreements of Lessee............................. 28

SECTION 9. VOLUNTARY TERMINATION UPON OBSOLESCENCE.................. 28
9.1 Right of Termination..................................... 28

LEASE AGREEMENT SPECIAL PAGE ii
713
9.2 Election by Lessor to Sell............................... 29
9.2.1 Bids; Closing of Sale............................. 29
9.2.2 Closing of Sale................................... 30
9.2.3 Withdrawal of Notice of Termination............... 32
9.3 Retention of Aircraft by Lessor.......................... 32

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC...................... 34
10.1 Event of Loss With Respect to Aircraft................... 34
10.1.1 Notice and Election............................... 34
10.1.2 Payment of Loss and Termination of Lease.......... 35
10.1.3 Replacement of Airframe and Engines............... 37
10.2 Event of Loss With Respect to an Engine.................. 38
10.2.1 Notice............................................ 38
10.2.2 Replacement of Engine............................. 38
10.3 Conditions to any Replacement............................ 38
10.3.1 Documents......................................... 38
10.3.2 Other Conditions.................................. 41
10.3.3 Other Obligations................................. 41
10.4 Conveyance to Lessee..................................... 42
10.5 Application of Payments.................................. 42
10.5.1 Replacement of Airframe and Engines............... 42
10.5.2 Loss of Engine.................................... 43
10.5.3 Payment of Loss................................... 43
10.6 Requisition of Aircraft for Use.......................... 43
10.7 Requisition of an Engine for Use......................... 44
10.8 Application of Payments.................................. 44
10.9 Application of Payments During Existence of Default...... 45

SECTION 11. INSURANCE................................................ 45
11.1 Lessee's Obligation to Insure............................ 45
11.2 Lessor's Right to Maintain Insurance..................... 45
11.3 Insurance for Own Account................................ 46
11.4 Indemnification by Government in Lieu of Insurance....... 46
11.5 Application of Insurance Proceeds........................ 47
11.6 Application of Payments During Existence of Default...... 47

LEASE AGREEMENT SPECIAL PAGE iii
714

SECTION 12. INSPECTION............................................... 48

SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE.............. 49
13.1 In General............................................... 49
13.2 Merger of Lessee......................................... 49
13.2.1 In General........................................ 49
13.2.2 Effect of Merger.................................. 50
13.3 Assignment as Security for Lessor's Obligations.......... 50
13.4 Successor Owner Trustee.................................. 51

SECTION 14. LEASE EVENTS OF DEFAULT.................................. 51
14.1 Payments................................................. 52
14.2 Insurance................................................ 52
14.3 Corporate Existence...................................... 52
14.4 Certain Covenants........................................ 52
14.5 Other Covenants.......................................... 52
14.6 Representations and Warranties........................... 53
14.7 Bankruptcy and Insolvency................................ 53

SECTION 15. REMEDIES AND WAIVERS..................................... 54
15.1 Remedies................................................. 54
15.1.1 Return and Repossession........................... 54
15.1.2 Sale and Use...................................... 55
15.1.3 Certain Liquidated Damages........................ 55
15.1.4 Liquidated Damages Upon Sale...................... 57
15.1.5 Rescission........................................ 58
15.1.6 Other Remedies.................................... 58
15.2 Limitations Under CRAF................................... 59
15.3 Right to Perform for Lessee.............................. 59
15.4 Determination of Fair Market Rental Value
and Fair Market Sales Value.............................. 59
15.5 Lessor Appointed Attorney-in-Fact........................ 60
15.6 Remedies Cumulative...................................... 60

SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC....... 61

SECTION 17. RENEWAL AND PURCHASE OPTIONS............................. 62
17.1 Notices Generally........................................ 62
17.2 Renewal Options.......................................... 63
17.2.1 Renewal Notice.................................... 63
17.2.2 Renewal Rent...................................... 65

LEASE AGREEMENT SPECIAL PAGE iv
715
17.2.3 Stipulated Loss and Termination Values............ 65
17.3 Purchase Option.......................................... 66
17.3.1 Purchase Notice................................... 66
17.3.2 Purchase Price.................................... 67
17.3.3 Title............................................. 67
17.4 Appraisals............................................... 67

SECTION 18. MISCELLANEOUS............................................ 68
18.1 Amendments............................................... 68
18.2 Severability............................................. 68
18.3 Survival................................................. 69
18.4 Reproduction of Documents................................ 69
18.5 Counterparts............................................. 69
18.6 No Waiver................................................ 70
18.7 Notices.................................................. 70
18.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE......... 71
18.9 Third-Party Beneficiary.................................. 72
18.10 Entire Agreement......................................... 72

ANNEXES, EXHIBITS AND SCHEDULES

ANNEX A Definitions
ANNEX B Return Conditions
ANNEX C Maintenance
ANNEX D Insurance

EXHIBIT A Form of Lease Supplement

SCHEDULE 1 Certain Terms
SCHEDULE 2 Basic Rent
SCHEDULE 3 Stipulated Loss Value Schedule
SCHEDULE 4 Termination Value Schedule
SCHEDULE 5 Permitted Air Carriers
SCHEDULE 6 Placards

LEASE AGREEMENT SPECIAL PAGE v
716

LEASE AGREEMENT _____

LEASE AGREEMENT ______, dated as of (this "Agreement" or "Lease"), between
(a) FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
not in its individual capacity, except as expressly provided herein, but solely
as Owner Trustee (this and all other capitalized terms used but not defined
herein shall have the respective meanings ascribed thereto in Section 1 below)
("Lessor" or "Owner Trustee"), and (b) CONTINENTAL AIRLINES, INC., a Delaware
corporation ("Lessee").

RECITALS

A. Lessor and Lessee are parties to the Participation Agreement,
pursuant to which, among other things, Lessor and Lessee have agreed to enter
into this Agreement.

B. Pursuant to the Trust Agreement, Owner Participant has authorized
Lessor to enter into this Agreement.

SECTION 1. DEFINITIONS AND CONSTRUCTION

1.1 DEFINITIONS

Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.

1.2 FINANCE LEASE PARTIES

The parties agree, to the extent permitted by applicable Law, that no
right or remedy granted solely by reason of Article 2A of the UCC shall be
available to Lessor or Lessee as against each other unless expressly set forth
in this Lease; and to the extent the foregoing waiver is not wholly effective,
the parties agree that this Lease shall constitute a "Finance Lease" for

LEASE AGREEMENT SPECIAL PAGE 1
717
purposes of Article 2A of, and as defined by Section 2A-103(g) of, the UCC.

SECTION 2. DELIVERY AND ACCEPTANCE

2.1 DELIVERY AND LEASE OF AIRCRAFT

2.2 ACCEPTANCE BY LESSEE

(a) By executing and delivering Lease Supplement No. 1, Lessee confirms to
Lessor that (i) Lessee has duly and irrevocably accepted delivery of the
Aircraft for all purposes of this Agreement, (ii) Lessee has duly and
irrevocably accepted the Aircraft as being in satisfactory condition and in
good working order, without defect in design, operation or fitness for use,
whether or not discoverable by Lessee as of the Delivery Date, and (iii) the
Aircraft has been duly marked in accordance with Section 7.1.3(a).

(b) Lessor has authorized one or more employees of Lessee, designated by
Lessee in writing, as the authorized representative or representatives of
Lessor to accept delivery of the Aircraft on behalf of Lessor pursuant to the
Purchase Agreement Assignment and the Participation Agreement. Lessee hereby
agrees that if delivery of the Aircraft shall be accepted by an employee or
employees of Lessee pursuant to such authorization by Lessor, such acceptance
of delivery by such employee or employees on behalf of Lessor shall, without
further act, irrevocably constitute acceptance by Lessee of the Aircraft for
all purposes of this Agreement.

SECTION 3. TERM AND RENT

3.1 TERM

The Aircraft shall be leased hereunder for the Term, unless this Agreement
or the leasing of the Aircraft is earlier

LEASE AGREEMENT SPECIAL PAGE 2
718

terminated in accordance with any provision of this Agreement. Lessee shall
have the option to renew the leasing of the Aircraft hereunder pursuant to, and
subject to the terms and conditions of, Section 17, for the Renewal Lease Term.

3.2 RENT

3.2.1 INTERIM RENT; BASIC RENT; ADJUSTMENTS TO BASIC RENT,
STIPULATED LOSS VALUE AND TERMINATION VALUE

(a) Lessee shall pay Interim Rent to Lessor on the last day of the Interim
Lease Term. During the Base Lease Term, Lessee shall pay to Lessor, on each
Payment Date, in the manner and in funds of the type specified in Section 3.3,
Basic Rent in the amount equal to the percentage of Lessor's Cost specified in
Schedule 2 for such Payment Date, which shall be allocated to the Payment
Period ending on such Payment Date, if designated as a payment in arrears, or
allocated to the Payment Period commencing on such Payment Date, if designated
as a payment in advance, in each case as specified in Schedule 2, as such
amount may be adjusted pursuant to Section 3.2.1 (b) or increased pursuant to
the next sentence. Interim Rent and Basic Rent shall be increased in an amount
equal to any increase in the amount of interest due on the Equipment Notes on
the relevant Payment Date pursuant to the terms of the Equipment Notes with
respect to adjustments to the respective interest rates borne by the Equipment
Notes to the extent, and under the circumstances, specified in the Registration
Rights Agreement.

(b) In the event of a refinancing as contemplated by Section 11 of the
Participation Agreement, then the Basic Rent percentages set forth in Schedule
2, Stipulated Loss Value percentages set forth in Schedule 3 and the
Termination Value percentages set forth in Schedule 4 shall be recalculated
(upwards and downwards) by the Owner Participant as contemplated by such
Section 11 in accordance with Section 3.2.1(c). Any adjustment described in
this Section shall be set forth in an amendment to this Lease executed and
delivered by Lessor and Lessee.

LEASE AGREEMENT SPECIAL PAGE 3
719
give prompt notice to the other of any event requiring an adjustment. All such
adjustments shall be made in a manner that (i) maintains the Net Economic
Return to Owner Participant and (ii) to the extent possible consistent with
clause (i), minimizes the Net Present Value of Rents to Lessee. Any
recalculation of the percentages of Basic Rent, Stipulated Loss Value and
Termination Value shall be prepared by Owner Participant, subject to
verification at the request of Lessee in accordance with Section 3.2.1(d), on
the basis of the same methodology and assumptions used by Owner Participant in
determining the percentages of Basic Rent, Stipulated Loss Value and
Termination Value as of the Delivery Date (including compliance with Revenue
Procedures 75-21 and 75-28 and Section 467 of the Code), except as such
assumptions have been modified to reflect the events giving rise to adjustments
hereunder. Promptly after an adjustment is made hereunder, Owner Participant
shall deliver to Lessee a description of such adjustment, setting forth in
reasonable detail the calculation thereof. All adjustments shall (y) be made so
as to avoid characterization of the Lease as a "disqualified leaseback or
long-term agreement" within the meaning of Section 467 of the Code and to avoid
any additional risk of such characterization and (z) be in compliance with the
requirements of Revenue Procedure 75-21 and Sections 4.02(5), 4.07(l) and, on a
prospective basis, 4.08(1) of Revenue Procedure 75-28. For purposes of this
Section 3.2.1(c), adjustments to Basic Rent shall be considered to comply with
Section 467 and not to result in recharacterization of the Lease as a
"disqualified leaseback or long-term agreement" if (i) application of Section
467 does not result in recognition of income in any taxable year of the Owner
Participant in excess of the amount of Basic Rent scheduled to accrue during
such taxable year (in accordance with the schedule of adjusted Basic Rent)
without regard to the provisions of Section 467(b)(2) of the Code and the
regulations thereunder or (ii) Section 467 does require such recognition of
income, but the adjustments to Basic Rent maintain Owner Participant's Net
Economic Return notwithstanding such acceleration.

(d) If Lessee believes that any calculations by Owner Participant pursuant
to Section 3.2.1(c) are in error, and if, after consultation, Lessee and Owner
Participant are unable to agree on an adjustment, then a nationally recognized
firm of accountants selected by Owner Participant and reasonably satisfactory
to Lessee (which may be Owner Participant's independent public accountants)
shall verify such calculations.

LEASE AGREEMENT SPECIAL PAGE 4
720
Owner Participant will make available to such firm, but not, in any
circumstances, to Lessee or any representative of Lessee, the methodology and
assumptions referred to in Section 3.2.1(c) and any modifications thereto made
to reflect the events giving rise to adjustments hereunder (subject to the
execution by such firm of a confidentiality agreement, reasonably acceptable to
Owner Participant, prohibiting disclosure of such methodology and assumptions
to any third party). The determination by such firm of accountants shall be
final. Lessee will pay the reasonable costs and expenses of such further
verification by such accountants, provided that if it results in a decrease in
Basic Rent which decreases the remaining Net Present Value of Rents by more
than twenty basis points from the remaining Net Present Value of Rents as
recalculated by the Owner Participant, then the Owner Participant will pay such
costs and expenses.

(e) Notwithstanding anything to the contrary in any Operative Agreement,
the amount of the payment of Basic Rent due and payable on each Payment Date
shall be at least sufficient to pay in full, as of such Payment Date (assuming
timely payment of the Equipment Notes prior to such Date), the aggregate
principal amount of scheduled installments due on the Equipment Notes
outstanding on such Payment Date, together with the accrued and unpaid interest
thereon, due on such Payment Date in respect of the Equipment Notes; provided,
however, that no installment of Basic Rent shall be increased to the extent
such increase would be based upon (i) any judicial attachment or diversion of
Basic Rent on account of Lessor Liens attributable to Lessor or Owner
Participant, (ii) any modification of the amount or due date of any scheduled
payment required to be made in respect of the Equipment Notes, other than as
required or permitted by any Operative Agreement (including, without
limitation, as permitted upon the occurrence of a Lease Event of Default) or
(iii) the acceleration of any Equipment Note due solely to the occurrence of an
Indenture Event of Default that does not constitute a Lease Event of Default.

3.2.2 SUPPLEMENTAL RENT

Lessee shall pay to Lessor, or to whosoever shall be entitled thereto, any
and all Supplemental Rent when and as the same shall become due and owing.
Lessee shall pay, as Supplemental Rent, the Make-Whole Amount, if any, due
pursuant to Section 2.10(b) or Section 2.11 of the Trust Indenture in
connection with a redemption of the Equipment Notes pursuant to

LEASE AGREEMENT SPECIAL PAGE 5
721

such Section 2.10(b) or Section 2.11. Lessee will also pay to Lessor, or to
whosoever shall be entitled thereto, on demand, as Supplemental Rent, to the
extent permitted by applicable law, interest at the Payment Due Rate on any
part of any amount of Rent (including, without limitation, Supplemental Rent)
not paid by 12:30 p.m., New York time, on the date when due, for the period
from and including the date on which the same was due to, but excluding, the
date of payment in full.

3.3 PAYMENTS

(a) Payments of Rent and any and all other amounts payable by Lessee
hereunder and under any other Operative Agreement shall be paid by wire
transfer of immediately available Dollars, not later than 12:30 p.m., New York
time, on the date when due, to the account of Lessor specified in Schedule 1 to
the Participation Agreement or to such other account in the United States as
directed by Lessor to Lessee in writing or, in the case of any payment of
Supplemental Rent expressly payable to a person other than Lessor, to the
person that shall be entitled thereto to such account in the United States as
such person may specify from time to time to Lessee.

(b) Except as otherwise expressly provided herein, whenever any payment of
Rent, or any other amount payable under this Agreement, the Participation
Agreement or any other Operative Agreement shall be due on a day that is not a
Business Day, such payment shall be made on the next day that is a Business
Day, and, if such payment is made on such next Business Day, no interest shall
accrue on the amount of such payment during such extension.

(c) So long as Lessee has not received written notice from the Mortgagee
that the Trust Indenture has been discharged pursuant to Section 10.01 thereof,
and notwithstanding Section 3.3(a), Lessor hereby directs, and Lessee agrees,
that all payments of Rent and all other amounts payable by Lessee hereunder,
other than Excluded Payments, shall be paid directly to Mortgagee on behalf of
Lessor by wire transfer of immediately available Dollars to the account of
Mortgagee specified in Schedule 1 to the Participation Agreement, or to such
other account in the United States as Mortgagee may specify by written notice
to Lessor and Lessee from time to time.

LEASE AGREEMENT SPECIAL PAGE 6
722

(d) Excluded Payments shall be paid by wire transfer of immediately
available Dollars to the account of the person specified in the Participation
Agreement or, if not so specified, to such account in the United States as may
be specified by such person by written notice to Lessor and Lessee from time to
time.

(e) All computations of interest under this Agreement shall be made on the
basis of a year of 360 days comprised of twelve 30-day months.

SECTION 4. DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR; SECTION
1110 MATTERS

4.1 COMPUTATION OF STIPULATED LOSS AND TERMINATION VALUES

Lessor and Lessee acknowledge and agree that, notwithstanding the second
sentence of Section 3.2.1(a), the percentages set forth in Schedules 3 and 4
hereto, with respect to Stipulated Loss Value Dates and Termination Value Dates
which are not Payment Dates, have been computed on the assumption that the
Basic Rent payable on the Payment Date immediately preceding any such
Stipulated Loss Value Date or Termination Value Date, as the case may be, has
been paid to and will be retained by Lessor, such that if such computations did
not assume payment and retention of such Basic Rent, the Stipulated Loss Values
and Termination Values corresponding to such Stipulated Loss Value Dates and
Termination Value Dates, respectively, would be commensurately higher than
those set forth in Schedules 3 and 4 hereto.

4.2 DISCLAIMER

LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT "AS-IS, WHERE-IS." LESSEE
ACKNOWLEDGES AND AGREES THAT AS BETWEEN LESSEE AND EACH OF LESSOR, MORTGAGEE
AND ANY PARTICIPANT (i) THE AIRFRAME AND EACH ENGINE ARE OF A SIZE, DESIGN,
CAPACITY AND MANUFACTURE SELECTED BY AND ACCEPTABLE TO LESSEE, (ii) LESSEE IS
SATISFIED THAT THE AIRFRAME AND EACH ENGINE ARE SUITABLE FOR THEIR RESPECTIVE
PURPOSES, AND (iii) NONE OF LESSOR, MORTGAGEE AND ANY PARTICIPANT MAKES, HAS
MADE OR SHALL BE DEEMED TO HAVE MADE, AND EACH WILL BE DEEMED TO HAVE EXPRESSLY
DISCLAIMED, AND LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES, ANY WARRANTY,
REPRESENTATION, GUARANTY, LIABILITY AND OBLIGATION OF LESSOR, MORTGAGEE AND ANY
PARTICIPANT AND ANY RIGHT, CLAIM AND REMEDY OF

LEASE AGREEMENT SPECIAL PAGE 7
723
LESSEE AGAINST SUCH PARTIES, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW,
COURSE OF PERFORMANCE, COURSE OF DEALING, USAGE OF TRADE OR OTHERWISE, AS TO:

(w) THE TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN,
OPERATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR USE OR FOR ANY PARTICULAR PURPOSE OF THE AIRFRAME, ANY
ENGINE, ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, SOLD OR
TRANSFERRED HEREUNDER,

(x) THE QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO
THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING
DELIVERED, SOLD OR TRANSFERRED HEREUNDER,

(y) THE ABSENCE OF LATENT OR ANY OTHER DEFECT OR NONCONFORMANCE
IN THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER
THING DELIVERED, SOLD OR TRANSFERRED HEREUNDER, WHETHER OR NOT
DISCOVERABLE, OR

(z) THE ABSENCE OF ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY
PATENT, TRADEMARK OR COPYRIGHT OR THE LIKE.

LESSEE FURTHER WAIVES, DISCLAIMS, RELEASES AND RENOUNCES ANY LIABILITY, RIGHT,
CLAIM, REMEDY OR OBLIGATION BASED ON TORT, INCLUDING STRICT LIABILITY, WHETHER
OR NOT ARISING FROM THE NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED) OF
LESSOR, MORTGAGEE OR ANY PARTICIPANT, ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRFRAME, ANY ENGINE, ANY PART, ANY DATA
OR ANY OTHER THING DELIVERED, SOLD OR TRANSFERRED HEREUNDER, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
AIRFRAME, ANY ENGINE, ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, SOLD OR
TRANSFERRED HEREUNDER.

4.3 CERTAIN AGREEMENTS OF LESSOR

LEASE AGREEMENT SPECIAL PAGE 8
724
4.4 QUIET ENJOYMENT

So long as no Lease Event of Default shall have occurred and be
continuing, Lessor shall not interfere with Lessee's rights hereunder to
possession and use of the Aircraft during the Term. The foregoing, however,
shall not be construed or deemed to modify or condition in any respect the
obligations of Lessee pursuant to Section 16, which obligations are absolute
and unconditional.

4.5 INVESTMENT OF FUNDS HELD AS SECURITY

4.5.1 INVESTMENT
Any moneys required to be paid to or retained by Lessor that are not required
to be paid to Lessee pursuant to Section 10.9 or 11.6 solely because a Lease
Default or a Lease Event of Default shall have occurred and be continuing, or
that are held by Lessor pending payment to Lessee pursuant to Section 10.5,
10.8 or 11.5, or that are required to be paid to Lessee pursuant to Section
10.5, 10.8 or 11.5 after completion of a replacement to be made pursuant to
Sections 10.1, 10.2 and 10.3, shall, until paid to Lessee as provided in
Section 10 or 11 or applied as provided herein, be held by Lessor as security
for the obligations of Lessee under this Lease and the other Lessee Operative
Agreements (and Lessee hereby grants to Lessor a security interest in such
moneys) and shall be invested by Lessor from time to time as directed in
writing by Lessee (or, if Lessee fails to so direct, by or as directed by
Lessor in its sole discretion) and at the expense and risk of Lessee in Cash
Equivalents so long as such Cash Equivalents specified by Lessee or Lessor, as
the case may be, can be acquired by Lessor using its best efforts; provided,
that so long as the Lien of the Trust Indenture shall not have been discharged
under Section 10.01 thereof, such moneys shall be invested and held by
Mortgagee, as assignee of Lessor, as security for the obligations of Lessee
under this Lease and the other Lessee Operative Agreements and shall be
invested by Mortgagee pursuant to the first sentence of Section 5.09 of the
Trust Indenture.

4.5.2 PAYMENT OF GAIN OR LOSS

Any net gain (including interest received) realized as the result of
investments pursuant to Section 4.5.1 (net of any fees, commissions and other
reasonable expenses, if any, incurred in

LEASE AGREEMENT SPECIAL PAGE 9
725

connection with such investment) shall be held and applied in the same manner
as the principal amount is to be held and applied hereunder. Lessee will
promptly pay to Lessor, on demand, the amount of any loss realized as the
result of any such investment (together with any fees, commissions and other
reasonable expenses, if any, incurred in connection with such investment), such
amount so paid to be held and applied by Lessor as contemplated in Section
4.5.1 above.

4.5.3 LIMITATION OF LIABILITY

All investments under this Section 4.5, and under the first sentence of
Section 5.09 of the Trust Indenture, shall be at the expense and risk of
Lessee, and Lessor and Mortgagee shall not be liable for any loss resulting
from any investment made under this Section 4.5, or under the first sentence of
Section 5.09 of the Trust Indenture, other than by reason of its willful
misconduct or gross negligence. Any such investment may be sold (without regard
to its maturity) by Lessor without instructions whenever such sale is necessary
to make a distribution required by this Lease or the Trust Indenture.

4.6 TITLE TRANSFERS BY LESSOR

If Lessor shall be required to transfer title to the Aircraft, Airframe or
any Engine to Lessee or any other person pursuant to Section 5.3, 9, 10 or
17.3, then (a) Lessor shall (1) transfer to Lessee or such other person, as the
case may be, all of Lessor's right, title and interest in and to the Aircraft,
Airframe or such Engine, as the case may be, (2) assign to Lessee or such other
person, as the case may be, if and to the extent permitted under the Purchase
Agreement, all warranties of Airframe Manufacturer and Engine Manufacturer with
respect to the Aircraft, Airframe or such Engine, and (3) assign to Lessee or
such other person, as the case may be, if and to the extent permitted, all
claims, if any, for damage to the Aircraft, Airframe or such Engine, in each
case free of Lessor Liens attributable to Lessor or Owner Participant, and
without recourse or warranty of any kind whatsoever (except as to the transfer
described in clause (1) above and as to the absence of such Lessor Liens, as
aforesaid), and (b) Lessor shall promptly deliver to Lessee or such other
person, as the case may be, a ▇▇▇▇ of sale and agreements of assignment,
evidencing such transfer and assignment and such other instruments of transfer,
all in form and substance reasonably satisfactory to Lessor and

LEASE AGREEMENT SPECIAL PAGE 10
726

Lessee (or such other person, as the case may be), as Lessee (or such other
person, as the case may be) may reasonably request.

4.7 LESSOR'S INTEREST IN CERTAIN ENGINES

In the event Lessee shall have received from the lessor, conditional
seller, indenture trustee or secured party of any airframe leased to, or
purchased by, Lessee or any Permitted Sublessee subject to a lease, conditional
sale, trust indenture or other security agreement a written agreement complying
with clause (b) of Section 7.2.5, Lessor hereby agrees for the benefit of such
lessor, conditional seller, indenture trustee or secured party that Lessor, its
successors and assigns will not acquire or claim, as against such lessor,
conditional seller, indenture trustee or secured party, any right, title or
interest in any engine as the result of such engine being installed on the
Airframe at any time while such engine is subject to such lease, conditional
sale, trust indenture or other security agreement and owned by such lessor or
conditional seller or subject to a trust indenture or security interest in
favor of such indenture trustee or secured party.

4.8 LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE

(a) Lessee and Lessor agree that this Lease is, and shall be treated
as, a lease for U.S. federal income tax purposes of the Aircraft, Airframe,
Engines and Parts.

(b) It is the intention of each of Lessee and Lessor that Lessor (and
Mortgagee as assignee of Lessor under the Trust Indenture) shall be entitled to
the benefits of Section 1110 with respect to the right to take possession of
the Aircraft, Airframe, Engines and Parts as provided in this Lease, and in any
instance where more than one construction of the terms and conditions of this
Lease or any other pertinent Operative Agreement is possible, or of the facts
and circumstances underlying the transactions contemplated herein or therein,
Lessor and Lessee agree that a construction which would create and preserve
such benefits shall control over any construction which would not create and
preserve such benefits.

(c) Lessor and Lessee agree that, for all purposes of applicable Law,
this Lease constitutes an agreement of lease and nothing contained herein shall
be construed as conveying to

LEASE AGREEMENT SPECIAL PAGE 11
727
Lessee any right, title or interest in the Aircraft, Airframe, Engines, Parts
or Aircraft Documents except as a lessee only.

SECTION 5. RETURN OF AIRCRAFT

5.1 COMPLIANCE WITH ANNEX B

Lessee shall comply with each of the provisions of Annex B hereto, which
provisions are hereby incorporated by this reference as if set forth in full
herein. Without limiting any other rights of Lessor under this Lease or any
other Operative Agreement, Lessee acknowledges that the provisions of this
Section 5 and of Annex B, are of the essence of this Lease and the transactions
contemplated herein.

5.2 STORAGE AND RELATED MATTERS

If Lessee receives from Lessor a written request for storage of the
Aircraft upon its return hereunder, Lessee will promptly (and in any event
within ten (10) days following such request) provide Lessor, or cause Lessor to
be provided, with outdoor storage facilities for the Aircraft for a period not
exceeding one hundred eighty (180) days, commencing on the date of such return,
at Mojave, California or Marana, Arizona, as Lessor may specify, or if Lessor
elects not to store the Aircraft at either of such locations, then the Aircraft
shall be stored at such storage facility in the 48 contiguous states of the
United States as Lessee may select and which is used as a location for the
storage of large commercial aircraft. Lessee shall, at Lessor's written
request, maintain insurance (if available) for the Aircraft during such storage
period. Such storage shall be at Lessor's risk (subject to Lessee's insurance
obligations, as aforesaid); provided that Lessee shall pay all applicable
storage fees; and provided further that Lessee's obligation to provide storage
shall be subject to Lessor entering into an agreement prior to the commencement
of the storage period with the storage facility which agreement shall provide,
among other things, that Lessor shall bear all maintenance charges (other than
maintenance required as a result of Lessee's failure to comply with the
provisions of Annex B hereto) and all storage fees incurred after the initial
180 day storage period. In addition, upon the return of the Aircraft, Lessor
shall have no obligation with respect to the amount of any fuel or oil
contained in the fuel or oil tanks of the Aircraft.

5.3 RETURN OF OTHER ENGINES

In the event that any Engine owned by Lessor shall not be installed on the
Airframe at the time of return hereunder, such Engine shall be deemed to have
suffered an Event of Loss as of the sixty-first day prior to the date of such
return, with the effect that Lessee shall be required to return the Airframe
hereunder with a Replacement Engine meeting the requirements of, and in
accordance with, Section 10 hereof and Annex B hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of return of the Airframe.

LEASE AGREEMENT SPECIAL PAGE 12
728
5.4 FAILURE TO RETURN AIRCRAFT

If Lessee shall, for any reason whatsoever, fail to return the Aircraft
and the Aircraft Documents at the time specified herein, all obligations of
Lessee under this Lease shall continue in effect with respect to the Aircraft
until the Aircraft is returned to Lessor; provided, however, that this Section
5.4 shall not be construed as permitting Lessee to fail to meet its obligation
to return the Aircraft or the Aircraft Documents in accordance with the
requirements hereof or constitute, or be deemed to constitute, a waiver of any
Lease Event of Default resulting from Lessee's failure to return the Aircraft
or the Aircraft Documents or otherwise.

SECTION 6. LIENS.

Lessee shall not, directly or indirectly, create, incur, assume or suffer
to exist any Lien on or with respect to the Aircraft, the Airframe, any Engine,
any Part or any Aircraft Documents, title to any of the foregoing or any
interest therein, or this Lease or any interest of Lessor herein, or any amount
payable hereunder, including, without limitation, any Rent, except (a) the
respective rights of Lessor, Mortgagee, the Participants or Lessee under the
Operative Agreements, or of any Permitted Sublessee under any Permitted
Sublease; (b) Lessor Liens attributable to Owner Trustee (both in its capacity
as trustee under the Trust Agreement and in its individual capacity), Mortgagee
(both in its capacity as trustee under the Trust Indenture and in its
individual capacity) or Owner Participant; (c) the rights of others under
agreements or arrangements to the extent expressly permitted by the terms of
Sections 7.2 and 7.3 and Section F of Annex C; (d) Liens for

LEASE AGREEMENT SPECIAL PAGE 13
729

Taxes of Lessee (and its U.S. federal tax law consolidated group), or Liens for
Taxes of any Tax Indemnitee (and its U.S. federal tax law consolidated group)
for which Lessee is obligated to indemnify such Tax Indemnitee under any of the
Lessee Operative Agreements, in any such case either not yet due or being
contested in good faith by appropriate proceedings so long as such Liens and
such proceedings do not involve any material risk of the sale, forfeiture or
loss (including loss of use) of the Aircraft, the Airframe, any Engine or any
of the Aircraft Documents, or any interest therein or any discernible risk of
criminal liability or any material risk of civil penalty against Lessor,
Mortgagee or any Participant or impair the lien of the Trust Indenture; (e)
materialmen's, mechanics', workers', repairers', employees' or other like Liens
arising in the ordinary course of business for amounts the payment of which is
either not yet delinquent or is being contested in good faith by appropriate
proceedings, so long as such Liens and such proceedings do not involve any
material risk of the sale, forfeiture or loss (including loss of use) of the
Aircraft, the Airframe, any Engine or any of the Aircraft Documents, or any
interest therein or any discernible risk of criminal liability or any material
risk of civil penalty against Lessor, Mortgagee or any Participant or impair
the lien of the Trust Indenture; and (f) Liens arising out of any judgment or
award against Lessee (or any Permitted Sublessee), so long as such judgment
shall, within 30 days after the entry thereof, have been discharged or vacated,
or execution thereof stayed pending appeal or shall have been discharged,
vacated or reversed within 30 days after the expiration of such stay, and so
long as during any such 30-day period there is not, or any such judgment or
award does not involve, any material risk of the sale, forfeiture or loss
(including loss of use) of the Aircraft, the Airframe, any Engine or any of the
Aircraft Documents, or any interest therein or any discernible risk of criminal
liability or any material risk of civil penalty against Lessor, Mortgagee or
any Participant or impair the lien of the Trust Indenture. Lessee shall
promptly take such action as may be necessary duly to pay, satisfy, remove and
discharge any Lien not excepted above if the same shall at any time arise in
respect of the Aircraft, the Airframe, any Engine, any Part, the Aircraft
Documents or all or any other part of the Trust Estate and shall promptly
provide to Lessor evidence of such payment, satisfaction, removal or discharge.

LEASE AGREEMENT SPECIAL PAGE 14
730

SECTION 7. REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND RECORDS

7.1 REGISTRATION AND OPERATION

7.1.1 REGISTRATION AND RECORDATION

Subject to the compliance by Lessor and Owner Participant with their
respective obligations under Section 14 of the Participation Agreement, Lessee
shall cause the Aircraft to be, and at all times during the Term to remain,
duly registered with the FAA under the Act or with such other country of
registry as shall be permitted under Section 7.1.2 below, in the name of Lessor
as owner and lessor (except to the extent that such registration under the Act
cannot be effected with the FAA because of Lessor's or Owner Participant's
failure to comply with the citizenship requirements for registration of the
Aircraft under the Act). Lessor, at Lessee's expense, shall execute any and all
such documents as Lessee (or any Permitted Sublessee) may reasonably request
for the purposes of effecting and continuing such registration. Unless the
Trust Indenture has been discharged in accordance with its terms, Lessee shall
also cause the Trust Indenture to be duly recorded and at all times maintained
of record as a first-priority perfected mortgage (subject to Permitted Liens)
on the Aircraft, the Airframe and each of the Engines (except to the extent
such perfection or priority cannot be maintained solely as a result of the
failure by Lessor or Mortgagee to execute and deliver any necessary documents).

7.1.2 REREGISTRATION

So long as no Lease Default or Lease Event of Default shall have occurred
and be continuing, Lessee may, by written notice to Lessor, request to change
the country of registration of the Aircraft. Any such change in registration
shall be effected, if at all, only in compliance with, and subject to all of
the conditions set forth in, Section 7.6.12 of the Participation Agreement.

7.1.3 MARKINGS

(a) On or reasonably promptly after the Delivery Date, Lessee will cause
to be affixed to, and maintained in, the cockpit of the Airframe and on each
Engine, in each case, in a clearly visible location (it being understood that
the location

LEASE AGREEMENT SPECIAL PAGE 15
731

of such placards, as identified to the Owner Participant prior to the Delivery
Date, shall be deemed to be in compliance with this requirement), a placard of
a reasonable size and shape bearing the legend, in English, set forth in
Schedule 6. Lessee shall not remove or permit the removal of such placards,
except that such placards may be removed temporarily, if necessary, in the
course of maintenance of the Airframe or Engines. If any such placard is
damaged or becomes illegible, Lessee shall promptly replace it with a placard
complying with the requirements of this Section 7.1.3.

(b) During the Term, Lessee may letter, paint or ▇▇▇▇ the Aircraft with
the name and logo of Lessee or any Permitted Sublessee and may cause the
Aircraft to bear insignia plates or other markings identifying the supplier or
manufacturer of the Airframe or the Engines or any Parts. Except as provided
above, Lessee will not allow the name of any person to be placed on the
Airframe or on any Engine as a designation that could reasonably be interpreted
as a claim of ownership.

7.1.4 COMPLIANCE WITH LAWS

Lessee shall not, and shall not allow any other person to, operate, use,
maintain, service, repair, overhaul or otherwise similarly deal with the
Aircraft (a) in violation of any Law binding on or applicable to the Lessee or
to the Aircraft, the Airframe or any Engine, or any of the Aircraft Documents,
or to the operation, use, maintenance, service, repair or overhaul of, or
similar dealings in, the Aircraft, Airframe or any Engine, or (b) in violation
of any airworthiness certificate, license or registration of any Government
Entity relating to Lessee or to the Aircraft, the Airframe or any Engine,
except (1) immaterial or non-recurring violations of which Lessee or any
Permitted Sublessee had no prior knowledge or information and with respect to
which corrective measures are taken promptly by Lessee or a Permitted
Sublessee, as the case may be, upon discovery thereof, and (2) to the extent
Lessee or any Permitted Sublessee is contesting the validity or application of
any such law, rule, regulation, order, certificate, license or registration in
good faith in any reasonable manner which does not involve any material risk of
the sale, forfeiture or loss (including loss of use) of the Aircraft, the
Airframe, any Engine or any of the Aircraft Documents or any interest therein
or any discernible risk of criminal liability or any material risk of civil
penalty

LEASE AGREEMENT SPECIAL PAGE 16
732

against Lessor, Mortgagee or any Participant or impair the lien of the Trust
Indenture.

7.1.5 OPERATION

Lessee agrees not to operate, use or locate the Aircraft, the Airframe or
any Engine, or allow the Aircraft, the Airframe or any Engine to be operated,
used or located (a) in any area excluded from coverage by any insurance
required by the terms of Section 11, except in the case of a requisition by the
U.S. Government where Lessee obtains an indemnity in lieu of such insurance
from the U.S. Government, or insurance from the U.S. Government, covering such
area, in accordance with Section 11.4 or (b) in any recognized or threatened
area of hostilities unless fully covered in accordance with Annex D by war-risk
insurance as required by the terms of Section 11, unless the Aircraft is only
temporarily located in such area as a result of an emergency, equipment
malfunction, navigational error, hijacking, weather condition or other similar
unforeseen circumstances, so long as Lessee diligently and in good faith
proceeds to remove the Aircraft from such area immediately.

7.2 POSSESSION

Lessee will not, without the prior written consent of Lessor, sublease or
otherwise in any manner deliver, transfer or relinquish possession of the
Aircraft, the Airframe or any Engine or install any Engine, or permit any
Engine to be installed, on any airframe other than the Airframe; provided,
however, subject to the provisions of Section 7.3, that if and for so long as
(a) no Lease Event of Default shall have occurred and be continuing, (b) with
respect to any sublease or transfer contemplated by Section 7.2.7 or 7.2.8
below, no Lease Default or Lease Event of Default shall have occurred and be
continuing at the time of such sublease or transfer and (c) all approvals,
consents or authorizations required in connection with any such sublease or
such delivery, transfer or relinquishment of possession by the Aviation
Authority have been obtained and remain in full force and effect, then Lessee
may, without such prior written consent:

7.2.1 INTERCHANGE AND POOLING

Subject or permit any Permitted Sublessee to subject any Engine to normal
interchange agreements or pooling agreements or

LEASE AGREEMENT SPECIAL PAGE 17
733

arrangements, in each case customary in the commercial airline industry and
entered into in writing by Lessee or such Permitted Sublessee, as the case may
be, in the ordinary course of business and with (a) any U.S. Air Carrier or (b)
any other air carrier organized and having its principal place of business in a
country with which the United States then maintains normal diplomatic relations
and which recognizes and gives effect to the rights, title and interests of
Lessor and Mortgagee in, and with respect to, such Engine; provided, however,
that no such agreements or arrangements shall require, contemplate or result in
any transfer of Lessor's title to such Engine. If, notwithstanding the
foregoing, Lessor's title to any such Engine is divested under any such
agreement or arrangement, then such Engine shall be deemed to have suffered an
Event of Loss as of the date of such divestiture, with the effect that Lessee
shall be required to replace such Engine with a Replacement Engine meeting the
requirements of, and in accordance with, Section 10.

7.2.2 TESTING AND SERVICE

Deliver or permit any Permitted Sublessee to deliver possession of the
Aircraft, Airframe, any Engine or any Part to the manufacturer thereof or, to
the extent permitted by Section B of Annex C, to any third-party maintenance
provider, for testing, service, repair, maintenance or overhaul work on the
Aircraft, Airframe, any Engine or any Part, or, to the extent required or
permitted by the terms of Section D of Annex C, for alterations or
modifications in or additions to the Aircraft, Airframe or any Engine, it being
understood that, with respect to Engines and Parts, delivery may be
accomplished by transport on licensed or bonded common carriers qualified in
the shipping and transport of such items.

7.2.3 CIVIL RESERVE AIR FLEET PROGRAM

Transfer or permit any Permitted Sublessee to transfer possession of the
Aircraft, Airframe or any Engine to the U.S. Government pursuant to CRAF, in
which event Lessee shall promptly notify Lessor and Mortgagee in writing of any
such transfer of possession and in such notification shall identify by name,
address and telephone numbers the Contracting Office Representative or
Representatives for the Military Airlift Command of the United States Air Force
to whom notices must be given and to whom requests or claims must be made;
provided, however, that any such transfer of possession shall not continue,

LEASE AGREEMENT SPECIAL PAGE 18
734

and shall not be permitted to continue, beyond the end of the Term. If,
notwithstanding the foregoing, such transfer does continue beyond the end of
the Term, then (without limiting any other right of Lessor with respect to such
event) Lessor may, in accordance with Section 10.6, deem the Aircraft, Airframe
or Engines, as the case may be, to have suffered an Event of Loss with the
effect that Lessee would be required to pay, in accordance with Section 10.6,
the amounts specified in Section 10.1.2. If as of the Scheduled Expiration Date
the Aircraft or Airframe is being used or was within six months prior thereto
being used by the U.S. Government pursuant to CRAF, then Lessee shall give
notice to Owner Participant and Lessor of such fact, which notice shall specify
the date on which the Lessee expects the Term to end or, if such date cannot
reasonably be determined by Lessee, so stating.

7.2.4 INSTALLATION OF ENGINES ON OWNED AIRCRAFT

Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, as the case may be, free
and clear of all Liens, except (a) those of the type permitted under clauses
(d), (e) and (f) of Section 6 and those that apply only to the engines (other
than Engines) and/or only to parts, appliances, instruments, appurtenances,
accessories, furnishings and other equipment (other than Parts), and (b) the
rights of third parties under normal interchange or pooling agreements and
arrangements of the type that would be permitted under Section 7.2.1.

7.2.5 INSTALLATION OF ENGINES ON OTHER AIRFRAMES

LEASE AGREEMENT SPECIAL PAGE 19
735

agreement, conditional sale or other agreement covering such airframe), whereby
such Person agrees that neither such Person nor its successors or assigns will
acquire or claim any right, title or interest in, or Lien on, such Engine by
reason of such Engine being installed on such airframe.

7.2.6 INSTALLATIONS OF ENGINES ON FINANCED AIRCRAFT

Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, leased to Lessee or such
Permitted Sublessee, or purchased by Lessee or such Permitted Sublessee subject
to a conditional sale or other security agreement under circumstances where
neither Section 7.2.4 or 7.2.5 is applicable; provided, however, that in the
event of any such installation, such Engine shall be deemed to have suffered an
Event of Loss as of the date of such installation, with the effect that Lessee
shall be required to replace such Engine with a Replacement Engine meeting the
requirements of, and in accordance with, Section 10. Until Section 10 has been
fully complied with, Lessor's interest in any such Engine shall continue in
full force and effect.

7.2.7 SUBLEASING

With respect to the Aircraft, Airframe or any Engine, enter into a
sublease with any Permitted Air Carrier, but only if:

(a) Lessee shall provide 15 days' advance written notice to Lessor and
Mortgagee;

(b) At the time that Lessee enters into such sublease, no such Permitted
Air Carrier shall be insolvent or subject to any bankruptcy, insolvency,
liquidation, reorganization, dissolution or similar proceeding, or any similar
non-ordinary course transaction, shall be seeking any reorganization or any
readjustment of its debts or shall be, or shall have substantially all of its
property, in the possession of any liquidator, trustee, receiver or similar
person;

(c) No such sublease shall provide for payment of rent, or any
amount in lieu of rent, (i) more than three months in advance, or (ii) less
frequently than once every three months;

(d) Any such sublease (i) shall include provisions for the registration,
maintenance, operation, possession, inspection

LEASE AGREEMENT SPECIAL PAGE 20
736

and insurance of the Aircraft that are substantially the same as, or (from a
lessor's perspective) more favorable than, the applicable provisions of
Sections 7, 8, 11 and 12, (ii) shall provide that such Permitted Air Carrier
may not further sublease or transfer its interests (except transfers of the
type permitted in Sections 7.2.1 through 7.2.6, inclusive) in the Aircraft,
Airframe or Engines, (iii) shall be for a period not in excess of 60 months
(inclusive of all renewal periods) and not extending beyond the date which is
one year prior to the end of the Term, and (iv) shall be expressly subject and
subordinate to all the terms of this Agreement and to the rights, powers and
remedies of Lessor hereunder, including, without limitation, Lessor's rights
under Section 15 to repossess the Aircraft, Airframe and Engines and to
terminate such sublease, upon the occurrence of a Lease Event of Default;

(e) In connection with a sublease to a Permitted Air Carrier which is not
a U.S. Air Carrier, all necessary governmental approvals, if any, required for
the Aircraft, Airframe or Engines to be imported to, and exported from (upon
repossession thereof by Lessor or other termination or expiration of such
sublease), the applicable jurisdiction shall have been obtained prior to
commencement of any such sublease, and any foreign exchange permits necessary
to allow all rent and other payments provided for under such sublease shall be
in full force and effect; and Lessee shall have provided to Lessor a
power-of-attorney, reasonably satisfactory in form and substance to Lessor and,
to the extent permitted by applicable Law, valid and enforceable in the
applicable jurisdiction, permitting Lessor to exercise all rights of Lessee
under such sublease in such jurisdiction, upon the occurrence and continuation
of a Lease Event of Default;

(f) In connection with a sublease to a Permitted Air Carrier which is not
a U.S. Air Carrier, Lessee shall have furnished Lessor, Mortgagee and Owner
Participant a favorable opinion of counsel, satisfactory to Lessor and Owner
Participant, in the country of domicile of such Permitted Air Carrier, in form
and substance satisfactory to Lessor and Owner Participant, that (i) the terms
of such sublease, this Lease and the Trust Indenture are the legal, valid and
binding obligations of the parties thereto enforceable under the laws of such
jurisdiction, (ii) it is not necessary for Owner Participant, Lessor or
Mortgagee to register or qualify to do business in such jurisdiction, if not
already so registered or qualified, as a

LEASE AGREEMENT SPECIAL PAGE 21
737

result, in whole or in part, of the proposed sublease, (iii) Lessor's title to,
and Mortgagee's Lien in respect of, the Aircraft, Airframe and Engines will be
recognized in such jurisdiction, (iv) such jurisdiction maintains normal
diplomatic relations with the United States and the Laws of such jurisdiction
of domicile require fair compensation by the government of such jurisdiction,
payable in a currency freely convertible into Dollars, for the loss of use of
or title to the Aircraft, Airframe or Engines in the event of the requisition
by such government of such use or title (unless Lessee shall provide insurance
in the amounts required with respect to hull insurance under Section 11
covering the requisition of use of or title to the Aircraft, Airframe or
Engines by the government of such jurisdiction so long as the Aircraft,
Airframe or Engines are subject to such sublease) and (v) the agreement of such
Permitted Air Carrier that its rights under the sublease are subject and
subordinate to all the terms of this Lease is enforceable against such
Permitted Air Carrier under applicable law and Lessor shall be able to
repossess the Aircraft, Airframe and Engines, and return it to the United
States, without undue expense, penalty or delay, upon the occurrence of a Lease
Event of Default;

(g) Lessee shall furnish to Lessor, Mortgagee and Owner Participant
evidence reasonably satisfactory to Lessor and Owner Participant that the
insurance required by Section 11 remains in effect;

(h) All necessary action, if any, shall have been taken to continue in
full force and effect (i) the perfection of (y) Lessor's title to and interest
in the Aircraft, Airframe and Engines and (z) Mortgagee's first-priority
perfected Lien on the Aircraft, Airframe and Engines (subject to Permitted
Liens) and (ii) Lessor's and Mortgagee's rights under this Lease;

(i) All necessary documents shall have been duly filed, registered or
recorded in such public offices as may be required fully to preserve the title
of, and the priority of the interest of, Lessor and Mortgagee in the Aircraft,
Airframe and Engines;

(j) Each such sublease shall be assigned by Lessee to Lessor as security
for the performance of all of Lessee's obligations under this Lease (with
Lessee retaining all rights of sublessor thereunder, to the extent consistent
with this Section 7.2.7, (i) except the right to receive rents and (ii) if

LEASE AGREEMENT SPECIAL PAGE 22
738

and for so long as there shall not have occurred and be continuing a Lease
Event of Default) and, if the Trust Indenture is then in effect, such sublease
shall be further assigned without representation or warranty by Lessor to the
Mortgagee as security for the performance of all of Lessor's obligations under
the Trust Indenture, in each case, with the express consent of such Permitted
Air Carrier;

(k) No such sublease shall be made to Permitted Air Carriers, other than
U.S. Air Carriers, prior to the close of the calendar year in which the seventh
anniversary of the Delivery Date occurs, or if a Lessee Act (as defined in the
Tax Indemnity Agreement) as a result of which indemnification has been required
under the Tax Indemnity Agreement has created a longer Tax Attribute Period (as
defined in the Tax Indemnity Agreement), prior to the close of the Tax
Attribute Period, unless in either case Lessee prepays any liability Owner
Participant determines would be due under the Tax Indemnity Agreement as a
result of such sublease based upon the assumption that such sublease were to
continue for the remainder of the term of such sublease;

(l) Lessee shall reimburse the reasonable out-of-pocket fees and expenses,
including, without limitation, reasonable fees and disbursements of counsel,
incurred by Lessor, Mortgagee and Owner Participant in connection with any such
sublease; and

(m) For all purposes of this Section 7.2.7, the term "sublease" shall be
deemed to include interchange agreements with respect to the Aircraft or
Airframe.

7.2.8 TRANSFER TO U.S. GOVERNMENT

Transfer or permit the transfer of possession of the Aircraft, Airframe or
any Engine to the U.S. Government pursuant to a sublease under which the
sublessee's obligations are guaranteed or supported by the full faith and
credit of the United States, but only if such sublease complies, or Lessee
shall comply, as the case may be, with the requirements of clauses (a), (d)(i)
(other than with respect to insurance), (d)(ii)-(iii), (j) and (l) of Section
7.2.7.

7.3 Certain Limitations on Subleasing or Other Relinquishment of
Possession

Notwithstanding anything to the contrary in Section 7.2:

LEASE AGREEMENT SPECIAL PAGE 23
739

(a) The rights of any person that receives possession of the Aircraft in
accordance with Section 7.2 shall be subject and subordinate to all the terms
of this Lease, and to Lessor's rights, powers and remedies hereunder,
including, without limitation (i) Lessor's right to repossess the Aircraft
pursuant to Section 15, (ii) Lessor's right to terminate and avoid such
sublease, delivery, transfer or relinquishment of possession upon the
occurrence of a Lease Event of Default and (iii) the right to require such
person to forthwith deliver the Aircraft, the Airframe and Engines subject to
such transfer upon the occurrence of a Lease Event of Default;

(b) Lessee shall remain primarily liable hereunder for the
performance of all the terms of this Lease to the same extent as if such
transfer had not occurred and no transfer of possession of the Aircraft, the
Airframe, any Engine or any Part or any Aircraft Documents shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder or under
any Operative Agreement;

(e) Any Wet Lease shall not constitute a delivery, transfer or
relinquishment of possession for purposes of Section 7.2.

SECTION 8. MAINTENANCE; REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS; OTHER LESSEE COVENANTS

8.1 MAINTENANCE; REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS

LEASE AGREEMENT SPECIAL PAGE 24
740

Lessor under this Lease or any other Operative Agreement, Lessee acknowledges
that the provisions of this Section 8 and of Annex C are of the essence of this
Lease and the transactions contemplated herein.

8.2 INFORMATION, CERTIFICATES, NOTICES AND REPORTS

8.2.1 FINANCIAL INFORMATION

Lessee will furnish to Lessor and Owner Participant, to the extent not
already provided to such persons pursuant to Section 8.2.3:

(a) Within 60 days after the end of each of the first three fiscal
quarters in each fiscal year of Lessee, a consolidated balance sheet
of Lessee as of the end of such quarter and related statements of
income and cash flows for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding period in the preceding fiscal year, prepared in
accordance with GAAP; provided that so long as Lessee is subject to
the reporting requirements of the Securities Exchange Act of 1934, a
copy of Lessee's report on Form 10-Q for such fiscal quarter
(together with all documents containing such financial information
incorporated by reference therein) will satisfy this paragraph (a).

(b) Within 120 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as of the end of such fiscal
year and related statements of income and cash flows of Lessee for
such fiscal year, in comparative form with the preceding fiscal year,
prepared in accordance with GAAP, together with a report of Lessee's
independent certified public accountants with respect to their audit
of such financial statements; provided that so long as Lessee is
subject to the reporting requirements of the Securities Exchange Act
of 1934, a copy of Lessee's report on Form 10-K for such fiscal year
(including all corresponding publicly-available annual reports to
stockholders, if not previously furnished) will satisfy this
paragraph (b).

LEASE AGREEMENT SPECIAL PAGE 25
741
8.2.2 ANNUAL CERTIFICATE

Within 120 days after the close of each fiscal year of Lessee, Lessee
shall deliver to Lessor, Mortgagee and Owner Participant an Officer's
Certificate of Lessee to the effect that such officer is familiar with or has
reviewed or caused to be reviewed the relevant terms of this Lease and the
other Operative Agreements and has made, or caused to be made under his or her
supervision, a review of the transactions and condition of Lessee during the
preceding fiscal year, and that such review has not disclosed the existence
during such fiscal year, nor does such officer have knowledge of the existence
as at the date of such certificate, of any Lease Default or Lease Event of
Default or, if any such Lease Default or Lease Event of Default existed or
exists, specifying the nature and period of existence thereof and the action
Lessee has taken or is taking or proposes to take with respect thereto.

8.2.3 SEC REPORTS

Lessee will furnish to Lessor and Owner Participant:

(a) promptly after filing with the SEC, copies of Lessee's annual
reports on Form 10-K (including all corresponding publicly-available
annual reports to stockholders, if not previously furnished), and
quarterly reports on Form 10-Q (in each case, excluding exhibits
unless any such recipient requests otherwise); and (b) if provided by
Lessee from time to time to aircraft lessors and other aircraft
creditors generally, then (i) promptly after filing with the SEC,
copies of current reports on Form 8-K, or any similar reports filed
with the SEC (in each case, excluding exhibits unless any such
recipient requests otherwise), and (ii) promptly upon distribution
thereof, copies of all periodic reports furnished by Lessee, or any
parent company of Lessee, to its respective stockholders generally.

8.2.4 NOTICE OF DEFAULT

Lessee will furnish to Lessor, Mortgagee and Owner Participant,
immediately upon any senior officer or financial officer of Lessee, or other
administrative officer of Lessee

LEASE AGREEMENT SPECIAL PAGE 26
742

having any material responsibility for Lessee's day-to-day compliance with its
obligations under this Lease, becoming aware that a Lease Default or a Lease
Event of Default has occurred, a certificate of Lessee, signed by any such
officer of Lessee, describing such Lease Default or Lease Event of Default in
reasonable detail, with a statement describing the action Lessee has taken or
is taking or proposes to take with respect thereto.

8.2.5 INFORMATION FOR FILINGS

Lessee shall promptly furnish to Owner Participant or Lessor such
information (other than with respect to the citizenship of Owner Participant
and Lessor) within Lessee's or any Permitted Sublessee's possession, or
reasonably available to or obtainable by Lessee or such Permitted Sublessee, as
may be required to enable Lessor timely to file any reports required to be
filed by it as lessor under this Lease or to enable Owner Participant to timely
file any reports required to be filed by it, as the beneficiary of the Trust
Estate, in either case, with any Government Entity because of, or in connection
with, the interest of Owner Participant or Lessor in the Aircraft, Airframe or
Engines, this Lease or any other part of the Trust Estate; provided, however,
that with respect to any such information which Lessee reasonably deems
commercially sensitive or confidential, Owner Participant or Lessor, as the
case may be, shall afford Lessee a reasonable opportunity to seek from any such
Government Entity a waiver of the obligation of Owner Participant or Lessor to
file any such information, or shall consent to the filing of such information
directly by Lessee in lieu of filing by Owner Participant or Lessor and if any
such waiver or consent is evidenced to the reasonable satisfaction of Owner
Participant or Lessor, as the case may be, then Lessee shall not be required to
furnish such information to Owner Participant or Lessor.

8.2.6 OTHER INFORMATION

Lessee shall provide to Lessor, Mortgagee and each Participant, from time
to time such other information or data as Lessor, Mortgagee or any such
Participant may reasonably request concerning the Aircraft, Airframe or
Engines, or Lessee's financial condition, or otherwise relating to the
transactions or matters contemplated herein and in the other Operative
Agreements, in each case if and to the extent within Lessee's or any Permitted
Sublessee's possession, or reasonably available to

LEASE AGREEMENT SPECIAL PAGE 27
743

or obtainable by Lessee or such Permitted Sublessee (unless Lessee reasonably
deems the same to be commercially sensitive or confidential).

8.3 CERTAIN AGREEMENTS OF LESSEE

Lessee hereby agrees with Lessor that it shall perform the agreements,
covenants and indemnities set forth in the Participation Agreement and the Tax
Indemnity Agreement, and hereby restates Lessee's representations and
warranties set forth in the Participation Agreement, in each case as fully and
to the same extent and with the same force and effect as if set forth in full
in this Section 8.3. Lessee hereby further agrees that it shall pay to Lessor
or whosoever shall be entitled thereto, as Supplemental Rent, (i) all amounts
referred to clause (b) of the first sentence in the definition of Supplemental
Rent in Annex A hereto and (ii) all compensation and reimbursement of expenses,
disbursements and advances referred to clauses (c), (d) and (e) of the first
sentence in such definition of Supplemental Rent.

SECTION 9. VOLUNTARY TERMINATION UPON OBSOLESCENCE

9.1 RIGHT OF TERMINATION

(a) Lessee shall have the right at its option to terminate this Lease
during the Base Lease Term, effective only on a Termination Date occurring
after the tenth anniversary of the Delivery Date and on or before the date one
year prior to the Scheduled Expiration Date, if:

(i) the Aircraft is not then subject to any sublease or
other possessory interests of another person (including, without
limitation, interests of the type permitted under Section 7.2) and either
has become economically obsolete or is surplus to Lessee's requirements
and the Chief Financial Officer or Treasurer of Lessee so certifies in
writing to Lessor;

(ii) Lessee's termination of this Lease shall be made on a
nondiscriminatory basis with respect to the Aircraft and all Similar
Aircraft which are then owned, leased or otherwise operated by Lessee and
which are then eligible for termination or disposition under any
applicable agreements of Lessee relating to the purchase, ownership, lease
or operation thereof, with the effect that the disposition of the Aircraft
and any Similar Aircraft shall

LEASE AGREEMENT SPECIAL PAGE 28
744

be determined and effected on a random basis; and Lessee shall provide
such information to Lessor, as Lessor may reasonably request to establish
that such dispositions have been so determined;

(iii) written notice of Lessee's exercise of its option to
terminate this Agreement shall be given to Lessor, Mortgagee and Owner
Participant not less than six months nor more than eighteen months prior
to the proposed Termination Date specified in such notice; and

(iv) on the date of any notice described in clause (iii) no
Lease Event of Default shall have occurred and be continuing, and on such
proposed Termination Date no Lease Default or Lease Event of Default shall
have occurred and be continuing. (b) Lessor shall notify Lessee and
Mortgagee of Lessor's intention to sell or retain the Aircraft, as
provided in this Section 9, no later than 10 days prior to the proposed
Termination Date. Any such notice of an intention to retain the Aircraft
shall include assurances reasonably satisfactory to Mortgagee of Lessor's
ability to make the payments required by Section 9.3(a). Any failure by
Lessor to give such notice of its election shall be deemed to be an
election to sell the Aircraft, as provided in this Section 9. (c) Any
termination pursuant to this Section 9 shall become effective on the date
of the sale, if any, pursuant to Section 9.2 or upon the date of
termination and payment by Lessee and Lessor in accordance with Section
9.3 if Lessor elects to retain the Aircraft.

9.2 ELECTION BY LESSOR TO SELL

9.2.1 BIDS; CLOSING OF SALE

If Lessor elects to sell the Aircraft, Lessee, as agent for Lessor, shall,
from the date of such election until the date 30 days prior to the proposed
Termination Date, use its best reasonable efforts to obtain bids for a cash
purchase of the Aircraft and Lessor may, if it desires to do so, also seek to
obtain such bids. In the event Lessee receives any bid, Lessee shall promptly,
and in any event at least 25 days prior to the proposed date of sale, certify
to Lessor in writing the amount and terms of such bid, the proposed date of
such sale and the

LEASE AGREEMENT SPECIAL PAGE 29
745
name and address of the person (who shall not be Lessee or any Affiliate of
Lessee or any person with whom Lessee or any such Affiliate of Lessee has any
agreement or understanding with respect to the purchase, lease, use or
operation by Lessee or any such Affiliate of the Aircraft, Airframe or any
Engine) submitting such bid. In the event Lessor receives any bid, Lessor
shall, at least 25 days prior to the proposed date of sale, certify to Lessee
in writing the amount and terms of such bid, the proposed date of such sale and
the name and address of the person submitting such bid.

9.2.2 CLOSING OF SALE

(a) On the proposed Termination Date (i) Lessee shall deliver the
Airframe and Engines or engines constituting part of the Aircraft to the
bidder, if any, which shall have submitted the highest cash bid on or before
the date 30 days prior to such Termination Date, in the same manner as if
delivery were made to Lessor pursuant to Section 5 and Annex B and in full
compliance with the terms thereof, and shall duly transfer to Lessor title to
any such engines not owned by Lessor, all in accordance with the terms of
Section 5 and Annex B, and (ii) Lessor shall simultaneously therewith transfer
the Airframe and Engines or engines to such bidder, in the manner described in
Section 4.6, against cash paid to Lessor in the amount of such highest bid and
in the manner and in funds of the type specified in Section 3.3.

(i) all unpaid Basic Rent due at any time prior to such
Termination Date; plus

(ii) an amount equal to the excess, if any, of the
Termination Value for the Aircraft, computed as of such Termination Date,
over the proceeds of such sale; plus

(iii) as provided in Section 3.2.2, interest on the amounts
specified in the foregoing clause (i) at the Payment Due Rate from and
including the date on

LEASE AGREEMENT SPECIAL PAGE 30
746
which any such amount was due to the date of payment of such amount in
full; plus

(iv) the Basic Rent due on such Termination Date (other than
the portion (if any) of the Basic Rent due on such Termination Date that
is designated in Schedule 2 as a payment in advance).

As a further condition precedent to such sale and delivery, Lessee shall
pay all other amounts due and payable by Lessee to Lessor, Mortgagee or the
Participants under this Lease (other than the portion (if any) of the Basic
Rent due on such Termination Date that is designated in Schedule 2 as a payment
in advance), the Participation Agreement or any other Operative Agreement
(including, without limitation, (A) Supplemental Rent in respect of Make-Whole
Amount, if any, payable pursuant to Section 2.10(b) of the Trust Indenture in
connection with a redemption of the Equipment Notes upon such sale, and (B) all
interest charges provided for hereunder or under any other Lessee Operative
Agreement with respect to the late payment of any amounts so payable), and (C)
the reasonable out-of-pocket fees and expenses incurred by Lessor, Mortgagee
and Owner Participant in connection with such termination and sale).

(c) Upon and subject to any such sale and receipt of proceeds by
Lessor, and full and final payment of all amounts described in Section
9.2.2(b), and compliance by Lessee with all the other provisions of this
Section 9.2,

(i) Lessor will transfer to Lessee, in accordance with Section
4.6, any Engines constituting part of the Aircraft but which were not then
installed on the Airframe and sold therewith; and

(ii) the obligation of Lessee to pay Basic Rent, with respect to
periods after the Payment Date with reference to which Termination Value
is computed, shall cease, and the Term for the Aircraft shall end
effective as of the date of such sale.

LEASE AGREEMENT SPECIAL PAGE 31
747

continue, including, without limitation, its obligation to pay Rent, in each
case, as if the notice under Section 9.1 shall not have been given and, subject
to Section 9.2.3(b), Lessee may give another notice pursuant to Section 9.1.

(e) Lessor shall be under no duty to solicit bids, to inquire into
the efforts of Lessee to obtain bids or otherwise to take any action in
connection with any such sale other than to transfer to the purchaser named in
the highest bid referred to above (or to such purchaser and, in the case of
Engines described in Section 9.2.2(c), to Lessee) the Airframe and Engines or
engines against receipt of the payments described in Section 9.2.2(b).

9.2.3 WITHDRAWAL OF NOTICE OF TERMINATION

(a) Lessee may withdraw any notice given pursuant to Section 9.1 at
any time on or before the date 25 days prior to the proposed Termination Date
if it has determined that no bid of a reasonable amount has been received,
whereupon this Agreement shall continue in full force and effect and all of
Lessee's obligations shall continue, including, without limitation, its
obligation to pay Rent, in each case, as if the notice under Section 9.1 shall
not have been given and, subject to Section 9.2.3(b), Lessee may give another
notice pursuant to Section 9.1.

(b) Anything herein to the contrary notwithstanding, Lessee shall not
be entitled to give more than three notices pursuant to Section 9.1. (c) Lessee
shall pay any and all reasonable out-of-pocket fees and expenses of Lessor,
Mortgagee and Owner Participant in connection with any notice of termination
withdrawn by Lessee or in connection with any notice of termination pursuant to
which a sale of the Aircraft fails to occur.

9.3 RETENTION OF AIRCRAFT BY LESSOR

(a) If Lessor shall elect to retain the Aircraft in accordance with
Section 9.1, on the proposed Termination Date:

(i) Lessor shall pay, or cause to be paid, in the manner
and in funds of the type specified in Section 3.3, to the Mortgagee an
amount sufficient to prepay

LEASE AGREEMENT SPECIAL PAGE 32
748

all outstanding Equipment Notes pursuant to Section 2.10(b) of the Trust
Indenture;

(ii) subject to receipt by Mortgagee of the funds described
in paragraph (i) above, Lessee shall deliver the Airframe and Engines or
engines constituting part of the Aircraft to Lessor pursuant to Section 5
and Annex B and in full compliance with the terms thereof, and shall duly
transfer to Lessor title to any such engines not owned by Lessor, all in
accordance with the terms of Section 5 and Annex B;

(iii) Lessee shall pay to Lessor, in the manner and in funds
of the type specified in Section 3.3:

(1) all unpaid Basic Rent due at any time prior to such
Termination Date; plus

(2) the excess, if any, of (A) the Termination Value of the
Aircraft, computed as of such Termination Date, over (B) an
amount equal to the highest bona fide cash bid made for the
Aircraft by a person that is not a person described in the
parenthetical of the second sentence of Section 9.2.1; plus

(3) as provided in Section 3.2.2, interest on the amounts
specified in the foregoing clause (1) at the Payment Due Rate
from and including the date on which any such amount was due to
the date of payment of such amount in full; plus

(4) the Basic Rent due on such Termination Date (other than the
portion (if any) of the Basic Rent due on such Termination Date
that is designated in Schedule 2 as a payment in advance); and

(iv) Lessee shall also pay all other amounts due and payable
by Lessee to Lessor, Mortgagee or the other Participants under this Lease
(other than the portion (if any) of the Basic Rent due on such Termination Date
that is designated in Schedule 2 as a payment in advance), the Participation
Agreement or any other Operative Agreement (including, without limitation, (A)
Supplemental Rent in respect of Make-Whole Amount, if any, payable pursuant to
Section 2.10(b) of the Trust Indenture in

LEASE AGREEMENT SPECIAL PAGE 33
749
connection with a redemption of the Equipment Notes upon redemption of such
Equipment Notes in accordance with such Section 2.10(b), (B) all interest
charges provided for hereunder or under any other Operative Agreement with
respect to the late payment of any amounts, so payable, and (C) the
out-of-pocket fees and expenses incurred by Lessor, Mortgagee and Owner
Participant in connection with such termination and sale).

(i) Lessor will transfer to Lessee, in accordance with
Section 4.6, any Engines constituting part of the Aircraft but which were
not then installed on the Airframe and sold therewith; and

(ii) The obligation of Lessee to pay Basic Rent otherwise
due with respect to periods after the Payment Date with reference to which
Termination Value is computed shall cease, and the Term for the Aircraft
shall end effective as of such Termination Date.

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.

10.1 EVENT OF LOSS WITH RESPECT TO AIRCRAFT

10.1.1 NOTICE AND ELECTION

(a) Upon the occurrence of an Event of Loss with respect to the
Airframe, and any Engine or Engines installed thereon at the time of such Event
of Loss, Lessee shall promptly (and in any event within 10 days after such
occurrence) give Lessor, Mortgagee and Owner Participant written notice of such
Event of Loss. Within 20 days after such occurrence, Lessee shall give Lessor,
Mortgagee and Owner Participant written notice of Lessee's election to make
payment in respect of such Event of Loss, as provided in Section 10.1.2 (which
notice shall specify the date, which shall be the first Business Day occurring
25 days after the date of such notice, on which such payment shall be made), or
to replace the Airframe, and any such Engines, as provided in Section 10.1.3.

LEASE AGREEMENT SPECIAL PAGE 34
750

(c) For purposes of Section 10.1.2, an Event of Loss with respect
to the Airframe shall be deemed to constitute an Event of Loss with respect to
the Aircraft. For purposes of Section 10.1.3, any Engine not actually
suffering an Event of Loss shall not be required to be replaced.

10.1.2 PAYMENT OF LOSS AND TERMINATION OF LEASE

(i) On or before the Business Day next following the
earlier of (x) the sixty-first day following the date of the occurrence of
such Event of Loss, and (y) the second Business Day following the receipt
of insurance proceeds with respect to such occurrence (but in any event
not earlier than the date specified in Lessee's notice under Section
10.1.1(a) on which payment in respect to such Event of Loss shall be
made), Lessee shall pay to Lessor:

(1) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the
case may be, (A) due at any time prior to the Stipulated Loss
Value Date immediately preceding the date of such Event of Loss,
or (B) if such Event of Loss occurs on a Stipulated Loss Value
Date, due at any time prior to such Date; plus

(2) the Stipulated Loss Value of the Aircraft computed as of the
Stipulated Loss Value Date used in the foregoing clause (1) for
the computation of unpaid Rent; plus

(3) as provided in Section 3.2.2, interest on the amount
specified in the foregoing clause (1) at the Payment Due Rate
from and including the date

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on which any such amount was due to the date of payment of such
amount in full; plus

(4) interest on the amounts specified in the foregoing clause(2)
at the SLV Rate from and including the Stipulated Loss Value
Date, used in the foregoing clause (1) for the computation of
unpaid Rent, to the date such amount is due, and thereafter at
the Payment Due Rate to the date of payment of such amounts in
full;

provided that, in the event that the last day of the Interim Lease Term or
a Payment Date shall occur (x) on or after the Stipulated Loss Value Date
used in the foregoing clause (1) for the computation of unpaid Rent, and
(y) on or before the date of payment of the amounts specified above in
this subparagraph (i), then Lessee shall pay the Interim Rent, Basic Rent
or the Renewal Rent, as the case may be, due on such last day of the
Interim Lease Term or Payment Date, and thereupon such amounts payable
under this subparagraph (i) shall be reduced by (A) the amount (if any) of
such Basic Rent or Renewal Rent referred to in this proviso which is due
on such Stipulated Loss Value Date and is designated in Schedule 2 (in the
case of such Basic Rent) or Section 17.2.2 (in the case of such Renewal
Rent) as a payment in advance and (B) the amount (if any) of such Interim
Rent, Basic Rent or Renewal Rent referred to in this proviso which is due
after such Stipulated Loss Value Date; and

(ii) on or before the date required for payment of the
amounts specified in paragraph (i) above, Lessee shall also pay to Lessor,
Mortgagee and the Participants all other amounts due and payable by Lessee
to Lessor, Mortgagee and the Participants under this Lease, the
Participation Agreement or any other Operative Agreement (including,
without limitation, (A) any interest charges provided for hereunder or
thereunder with respect to the late payment of any such other amounts, and
(B) all out-of-pocket fees and expenses of Lessor, each Participant and
Mortgagee in connection with such Event of Loss).

LEASE AGREEMENT SPECIAL PAGE 36
752

(ii) the Term for the Aircraft shall end, and (iii) Lessor will transfer the
Aircraft to Lessee, as-is and where-is, and subject to any insurer's salvage
rights, but otherwise in the manner described in Section 4.6.

10.1.3 REPLACEMENT OF AIRFRAME AND ENGINES

(a) If Lessee elects, in accordance with Section 10.1.1, to replace
the Airframe, and any Engines actually suffering the Event of Loss, then Lessee
shall, as promptly as possible and in any event within 60 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Airframe, and any such
Engine, title to a Replacement Airframe (which shall comply with paragraph (b)
below), and for each such Engine a Replacement Engine, in each case free and
clear of all Liens other than Permitted Liens. If Lessee makes such election,
but for any reason fails or is unable to effect such replacement within such
time period and in compliance with the requirements set forth in Section 10.3,
then Lessee shall be deemed to have initially made the election set forth in
Section 10.1.2 with the effect that Lessee shall immediately pay, in the manner
and in funds of the type specified in Section 3.3, the amounts required under,
and in accordance with, Section 10.1.2.

(b) Any such Replacement Airframe shall be an airframe (i) that is
manufactured by Airframe Manufacturer and delivered on any date occurring after
the Delivery Date, and (ii) that is the same model as the Airframe to be
replaced thereby, or an improved model, and that has performance and durability
characteristics, and a value and utility and remaining useful life, at least
equal to, and is in at least as good operating condition as, the Airframe to be
replaced thereby (assuming that such Airframe was of the value and utility and
in the condition and repair required by the terms hereof immediately prior to
the occurrence of the Event of Loss). Any such Replacement Engine shall meet
the requirements of, and be conveyed by Lessee to Lessor in accordance with,
Section 10.2 (other than the notice requirement set forth in Section 10.2.1).

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10.2 EVENT OF LOSS WITH RESPECT TO AN ENGINE

10.2.1 NOTICE

10.2.2 REPLACEMENT OF ENGINE

Lessee shall, as promptly as possible and in any event within 60 days
after the occurrence of such Event of Loss, convey or cause to be conveyed to
Lessor, in compliance with Section 10.3 and as replacement for the Engine with
respect to which any Event of Loss occurred, title to a Replacement Engine free
and clear of all Liens other than Permitted Liens. Such Replacement Engine
shall be an engine manufactured by Engine Manufacturer that is the same model
as the Engine to be replaced thereby, or an improved model, and that is
suitable for installation and use on the Airframe, and that has performance and
durability characteristics, and a value and utility and remaining useful life,
at least equal to, and is in at least as good operating condition as, the
Engine to be replaced thereby (assuming that such Engine was of the value and
utility and in the condition and repair required by the terms hereof
immediately prior to the occurrence of the Event of Loss).

10.3 CONDITIONS TO ANY REPLACEMENT

10.3.1 DOCUMENTS

Prior to or at the time of conveyance of title to any Replacement Airframe
or Replacement Engine to Lessor, Lessee shall promptly take each of the
following actions, and shall promptly furnish the following agreements,
instruments, certificates and documents to (and in each case reasonably
satisfactory in form and substance to) Lessor and Owner Participant: (a)
furnish Lessor with a full warranty ▇▇▇▇ of sale duly conveying to Lessor such
Replacement Airframe or Replacement Engine, together with such evidence of
title as Lessor may reasonably request;

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754

(b) cause such Replacement Airframe to be duly registered in the name
of Lessor pursuant to the Act;

(c) cause (i) a Lease Supplement subjecting such Replacement Airframe
or Replacement Engine to this Lease, duly executed by Lessee, to be delivered
to Lessor for execution and, upon such execution, to be filed for recordation
with the FAA pursuant to the Act, (ii) a Trust Indenture Supplement, subjecting
such Replacement Airframe or Replacement Engine to the Trust Indenture, to be
delivered to Lessor for execution and, upon execution, to be filed for
recordation with the FAA pursuant to the Act and (iii) such Financing
Statements and other filings, as Lessor, Mortgagee or Owner Participant may
reasonably request, duly executed by Lessee and, to the extent applicable,
Lessor and Mortgagee (and Lessor and Mortgagee shall execute and deliver the
same), to be filed in such locations as any such party may reasonably request;

(d) furnish such evidence of compliance with the insurance provisions
of Section 11 with respect to such Replacement Airframe or Replacement Engine
as Lessor or Owner Participant may reasonably request;

(e) furnish an opinion or opinions of Lessee's counsel (which may be
Lessee's legal department) reasonably satisfactory to Lessor and Owner
Participant (which shall include Mortgagee as an addressee) to the effect that
(i) upon such conveyance, Lessor will acquire good title to such Replacement
Airframe or Replacement Engine free and clear of all Liens other than Permitted
Liens, (ii) such Replacement Airframe or Replacement Engine will be leased
hereunder and made subject to the Trust Indenture to the same extent as the
Airframe or Engine replaced thereby, (iii) Lessor and Mortgagee, as assignee of
Lessor, shall be entitled to the benefits of Section 1110 with respect to such
Replacement Airframe, (iv) (if and to the extent that such opinion, in view of
applicable Law, can be rendered) Lessor and Mortgagee, as assignee of Lessor,
shall be entitled to the benefits of Section 1110 with respect to such
Replacement Engine to the extent that the Lessor and the Mortgagee were
entitled to the benefits of Section 1110 with respect to the Engine so
replaced, and (v) to such further effect as Lessor, Mortgagee or Owner
Participant may reasonably request;

(f) furnish an opinion of Lessee's aviation law counsel reasonably
satisfactory to Lessor and Owner Participant

LEASE AGREEMENT SPECIAL PAGE 39
755

(which shall include Mortgagee as an addressee) as to the due registration of
any such Replacement Airframe and the due recordation of each Lease Supplement
and Trust Indenture Supplement with respect to such Replacement Airframe or
Replacement Engine and as to such other matters concerning the Act as Lessor or
Owner Participant may reasonably request;

(g) with respect to any Replacement Airframe, furnish an opinion of
tax counsel, selected by Owner Participant and reasonably satisfactory to
Lessee, as to the tax consequences to Lessor and Owner Participant of any such
replacement;

(h) with respect to the replacement of any Engine (other than in
connection with replacement of the Airframe), furnish a certificate of a
qualified aircraft engineer (who may be an employee of Lessee) certifying that
such Replacement Engine has performance and durability characteristics, and a
value and utility and remaining useful life, at least equal to, and is in at
least as good operating condition as, the Engine so replaced, assuming such
Engine was of the value and utility and in the condition and repair required by
the terms hereof immediately prior to the occurrence of such Event of Loss;

(i) with respect to the replacement of the Airframe, and any Engine
installed thereon at the time of the subject Event of Loss, furnish a
certified report of a qualified independent aircraft appraiser, satisfactory
to Lessor and Owner Participant, setting forth such appraiser's opinion as to
the fair market value, as of the date of conveyance hereunder, of such
Replacement Airframe and any such Replacement Engine, and certifying that such
Replacement Airframe and any such Replacement Engine have performance and
durability characteristics, and a value and utility (including, but not limited
to, equivalent current value, estimated residual value at the end of the Term
(and at any relevant interval thereof, as may be specified by the Lessor) and
estimated remaining useful life) at least equal to, and are in at least as good
operating condition as, the Airframe and Engines so replaced (assuming the
Airframe and Engines were in the condition and repair required by the terms
hereof immediately prior to the occurrence of such Event of Loss); and

(j) take such other actions and furnish such other certificates and
documents as Lessor, Mortgagee or Owner Participant may reasonably request in
order that such Replacement

LEASE AGREEMENT SPECIAL PAGE 40
756

Airframe or Replacement Engine be duly and properly titled in Lessor, leased
hereunder and subjected to the Lien of the Trust Indenture to the same extent
as initially required under the Operative Agreements with respect to the
Airframe or Engine so replaced.

10.3.2 OTHER CONDITIONS

Lessee shall not be entitled to replace the Airframe under Section 10.1.3
and this Section 10.3, and shall be deemed to have initially made the election
set forth in Section 10.1.2, if at the time of such replacement

(a) there shall have occurred and be continuing any Lease Default
(other than with respect to Section 14.5 or 14.6) or Lease Event of Default; or

(b) under applicable Law and notwithstanding any actions by Lessor
and Lessee under Section 10.3.3(a), (i) Lessor or Mortgagee, as assignee of
Lessor, shall for any reason not be entitled to the benefits of Section 1110
with respect to such Replacement Airframe or (ii) with respect to any
Replacement Engine which replaces an Engine installed on the Airframe at the
time of such Event of Loss, Lessor or Mortgagee, as assignee of Lessor, shall
for any reason not be entitled to the benefits of Section 1110 with respect to
such Replacement Engine to the same extent that the Lessor and the Mortgagee
were entitled to the benefits of Section 1110 with respect to the Engine so
replaced.

10.3.3 OTHER OBLIGATIONS

LEASE AGREEMENT SPECIAL PAGE 41
757

foregoing, Lessee and Lessor intend that Lessor shall, in all events, be
entitled to the benefits of Section 1110 with respect to any Replacement
Airframe or Replacement Engine and Lessee and Lessor shall cooperate and take
such action as the other may reasonably request so as to ensure that Lessor
shall be entitled to such benefits.

(b) No Event of Loss with respect to an Engine, or with respect to an
Airframe, shall result in, or otherwise allow or permit (other than as provided
in Section 10.1.2(b)), any reduction, deferral, discharge or other change in
the timing or amount of any Rent payable by Lessee hereunder or any other
amount payable by Lessee under any other Operative Agreement, and (subject to
such Section 10.1.2(b)) Lessee shall pay all such Rent and other amounts as
though such Event of Loss had not occurred.

10.4 CONVEYANCE TO LESSEE

Upon full compliance by Lessee with the applicable terms of Sections
10.1.3, 10.2 and 10.3, Lessor will transfer to Lessee the Airframe or Engine,
as the case may be, with respect to which such Event of Loss occurred, in
accordance with Section 4.6, provided that Lessor shall not be required to
effect any such transfer if and for so long as there shall have occurred and be
continuing any Lease Default (other than with respect to Section 14.5 or 14.6)
or Lease Event of Default.

10.5 APPLICATION OF PAYMENTS

10.5.1 REPLACEMENT OF AIRFRAME AND ENGINES

If such amounts are received with respect to the Airframe, and any Engine
installed thereon at the time of such Event of Loss, such amounts shall be paid
over to, or retained by, Lessor (or until the Lien of the Trust Indenture is
discharged in accordance with Section 10.01 thereof, the Mortgagee, except with
respect to Excluded Payments), and shall be held in accordance with Section
4.5, and if, and at such time as, Lessee shall have

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fully complied with the applicable terms of Sections 10.1, 10.2 and 10.3 with
respect to the Event of Loss for which such amounts are received, such amounts
shall, subject to Section 10.9, be paid to Lessee.

10.5.2 LOSS OF ENGINE

If such amounts are received with respect to an Engine (other than an
Engine installed on the Airframe at the time such Airframe suffers an Event of
Loss), such amounts shall be paid over to, or retained by, Lessor (or, until
the Lien of the Trust Indenture is discharged in accordance with Section 10.01
thereof, the Mortgagee, except with respect to Excluded Payments) and shall be
held in accordance with Section 4.5, and if, and at such time as, Lessee shall
have fully complied with the applicable terms of Section 10.1, 10.2 and 10.3
with respect to the Event of Loss for which such amounts are received, such
amounts shall, subject to Section 10.9, be paid to Lessee.

10.5.3 PAYMENT OF LOSS

(b) second, the remainder, if any, shall, subject to Section 10.9,
be paid to Lessee.

10.6 REQUISITION OF AIRCRAFT FOR USE

LEASE AGREEMENT SPECIAL PAGE 43
759

end of the Term, Lessor, upon notice given not less than 30 days nor more than
120 days before the end of the Term, may elect to treat such event as
constituting an Event of Loss with respect to the Aircraft, and Lessee shall
then be deemed to have made the election set forth in Section 10.1.2 with the
effect that Lessee shall be obligated upon expiration of the Term to pay the
Stipulated Loss Value and all other amounts payable pursuant to Section 10.1.2
with respect to the Aircraft as if an Event of Loss earlier occurred and such
amounts were payable on such date. If Lessor does not elect to treat such event
as an Event of Loss, Lessee shall be obligated to return the Airframe and
Engines or engines to Lessor pursuant to, and in all other respects to comply
with the provisions of, Section 5 promptly upon their return by such Government
Entity.

10.7 REQUISITION OF AN ENGINE FOR USE

If any Government Entity shall requisition for use any Engine but not the
Airframe, Lessee will replace such Engine by complying with the applicable
terms of Sections 10.2 and 10.3 to the same extent as if an Event of Loss had
occurred with respect to such Engine, and any payments received by Lessor or
Lessee from such Government Entity with respect to such requisition shall be
paid or retained in accordance with Section 10.5.2.

10.8 APPLICATION OF PAYMENTS

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760
10.9 APPLICATION OF PAYMENTS DURING EXISTENCE OF DEFAULT

Any amount described in this Section 10 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Lease Default or a Lease Event of Default shall have occurred and be
continuing, but shall instead be held by or paid over to Lessor (or to
Mortgagee so long as Mortgagee has not given notice to Lessee that the Trust
Indenture has been duly discharged) as security for the obligations of Lessee
under this Lease and the other Operative Agreements and shall be invested
pursuant to Section 4.5 hereof unless and until such amount is applied, at the
option of Lessor, or upon the written request of Lessee to Lessor, from time to
time during the continuance of a Lease Event of Default, to Lessee's
obligations under this Lease and the other Lessee Operative Agreements as and
when due, it being understood that any such application shall be made to such
obligations of Lessee as Lessor may determine in its sole discretion. At such
time as there shall not be continuing any Lease Default or any Lease Event of
Default, such amount shall be paid to Lessee to the extent not previously
applied in accordance with this Section 10.9.

SECTION 11. INSURANCE

11.1 LESSEE'S OBLIGATION TO INSURE

Lessee shall comply with, or cause to be complied with, each of the
provisions of Annex D, which provisions are hereby incorporated by this
reference as if set forth in full herein. Without limiting any other rights of
Lessor under this Lease or any other Operative Agreement, Lessee acknowledges
that the provisions of this Section 11 and of Annex D are of the essence of
this Lease and the transactions contemplated herein.

11.2 LESSOR'S RIGHT TO MAINTAIN INSURANCE

In the event that Lessee shall fail to maintain, or cause to be
maintained, insurance as herein provided, Lessor, Mortgagee or any Participant
may at its option (but shall not be obligated to) provide such insurance and,
in such event, Lessee shall, upon demand, reimburse such person, as
Supplemental Rent, for the cost thereof. No such payment, performance or
compliance shall be

LEASE AGREEMENT SPECIAL PAGE 45
761
deemed to cure any Lease Default or Lease Event of Default or otherwise relieve
Lessee of its obligations with respect thereto.

11.3 INSURANCE FOR OWN ACCOUNT

Nothing in Section 11 shall limit or prohibit (a) Lessee from maintaining
the policies of insurance required under Annex D with higher limits than those
specified in Annex D, or (b) Lessor, Mortgagee or Owner Participant from
obtaining insurance for its own account (and any proceeds payable under such
separate insurance shall be payable as provided in the policy relating
thereto); provided, however, that no insurance may be obtained or maintained by
Lessee or Lessor that would limit or otherwise adversely affect the coverage of
any insurance required to be obtained or maintained by Lessee pursuant to this
Section 11 and Annex D.

11.4 INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE

During any period that the Aircraft, Airframe or any Engine shall have
been requisitioned for use by, or possession of the Aircraft shall have been
transferred to, the U.S. Government, Lessor agrees to accept, in lieu of
insurance against any risk with respect to the Aircraft described in Sections B
and C (but, with respect to Section C, as to hull coverage only) of Annex D,
indemnification from, or insurance provided by, the U.S. Government, or upon
written consent of Lessor and Owner Participant, other Government Entity,
against such risk in an amount that, when added to the amount of insurance, if
any, against such risk that Lessee (or any Permitted Sublessee) may continue to
maintain, in accordance with this Section 11, during the period of such
requisition or transfer, shall be at least equal to the amount of insurance
against such risk otherwise required by this Section 11. Any such
indemnification or insurance provided by the U.S. Government (or other
Government Entity consented to in accordance with the preceding sentence) shall
provide protection no less favorable to the Indemnitees, after taking into
account any insurance the Lessee or any Permitted Sublessee may continue to
maintain, than insurance coverage that would comply with the terms of this
Section 11. Lessee shall furnish to Lessor, Mortgagee and Owner Participant, in
advance of the attachment of such indemnity or insurance (a) a certificate of a
responsible Vice President of Lessee stating that such indemnification or
insurance complies with the preceding sentence and (b) any other information,
documentation

LEASE AGREEMENT SPECIAL PAGE 46
762

or certificates relating to such indemnity or insurance as
Lessor, Mortgagee or Owner Participant shall reasonably request.

11.5 APPLICATION OF INSURANCE PROCEEDS

As between Lessor and Lessee, all insurance proceeds received as a result
of the occurrence of an Event of Loss with respect to the Aircraft or any
Engine under policies required to be maintained by Lessee pursuant to this
Section 11 will be applied in accordance with Section 10.5. All proceeds of
insurance required to be maintained by Lessee, in accordance with Section 11
and Section B of Annex D, in respect of any property damage or loss not
constituting an Event of Loss with respect to the Aircraft, Airframe or any
Engine will be applied in payment (or to reimburse Lessee) for repairs or for
replacement property in accordance with the terms of Section 8.1, and any
balance remaining after compliance with said Section 8.1 with respect to such
damage or loss shall be paid over to, or retained by, Lessee.

11.6 APPLICATION OF PAYMENTS DURING EXISTENCE OF DEFAULTE OF DEFAULT

Any amount described in this Section 11 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Lease Default or a Lease Event of Default shall have occurred and be
continuing, but shall instead be held by or paid over to Lessor (or to
Mortgagee so long as Mortgagee has not given notice to Lessee that the Trust
Indenture has been duly discharged) as security for the obligations of Lessee
under this Lease and the other Operative Agreements and shall be invested
pursuant to Section 4.5 hereof unless and until such amount is applied, at the
option of Lessor, or upon the written request of Lessee to Lessor, from time to
time during the continuance of a Lease Event of Default, to Lessee's
obligations under this Lease and the other Lessee Operative Agreements as and
when due, it being understood that any such application shall be made to such
obligations of Lessee as Lessor may determine in its sole discretion. At such
time as there shall not be continuing any Lease Default or any Lease Event of
Default, such amount shall be paid to Lessee to the extent not previously
applied in accordance with this Section 11.6.

LEASE AGREEMENT SPECIAL PAGE 47
763

SECTION 12. INSPECTION

(a) At all reasonable times Lessor, Mortgagee, each Participant,
and their respective authorized representatives (the "Inspecting Parties") may
inspect the Aircraft, Airframe and Engines (including, without limitation, the
Aircraft Documents) and Lessee shall cooperate, and shall cause any Permitted
Sublessee to cooperate, with the Inspecting Parties in connection with any such
inspection (including, without limitation, permitting any such Inspecting Party
to make copies of such Aircraft Documents not reasonably deemed confidential by
Lessee or such Permitted Sublessee).

(b) Any inspection of the Aircraft hereunder shall be a visual,
walk-around inspection that may include going on board the Aircraft and
examining the contents of any open panels, bays or other components of the
Aircraft, Airframe and Engines (but shall not include the opening of any
unopened panels, bays or other components).

(i) have any duty or liability to make, or any duty or
liability arising out of, any such visit, inspection or survey or failure
to make any such visit, inspection or survey; or

(ii) so long as no Lease Event of Default has occurred and
is continuing, exercise its inspection rights hereunder other than on
reasonable notice and so as not to unreasonably interfere with Lessee's
maintenance and operation of the Aircraft, Airframe and Engines.

(d) Each person inspecting the Aircraft, Airframe or Engines
hereunder shall bear its own expenses in connection with any such inspection,
unless such person discovers, in connection therewith, any material failure by
Lessee or any Permitted Sublessee to comply with the provisions of this Lease,
in which case Lessee shall bear all such expenses.

(e) If requested by Lessor, Lessee shall give, or shall cause any
Permitted Sublessee to give, reasonable prior notice to Lessor of the date upon
which the Aircraft, Airframe or any Engine undergoes its next scheduled
maintenance visit and next major check, and with respect to any Engine the next
off-

LEASE AGREEMENT SPECIAL PAGE 48
764

the-wing maintenance, and shall advise Lessor of the name and location of
the relevant maintenance performer and shall, at least 5 days prior to
commencement of such major check or maintenance, make available for inspection
by Lessor all relevant Aircraft Documents at Lessee's records facility in the
United States, or at such Permitted Sublessee's records facility, or at the
premises of the maintenance performer.

SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE OWNER TRUSTEE

13.1 IN GENERAL

This Lease and the other Operative Agreements shall be binding upon and
inure to the benefit of Lessor and Lessee and their respective successors and
permitted assigns. Except as otherwise expressly permitted in Section 7.2 or
7.3, or as required in the case of any requisition by the U.S. Government
referred to in Section 7.1.5, or as permitted by Section 13.2.1, Lessee will
not, without the prior written consent of Lessor, Mortgagee and Owner
Participant, assign any of its rights under this Lease. Except as otherwise
provided herein (including, without limitation, under the provisions of Section
15 hereof), Lessor and Mortgagee may not assign or convey any of its right,
title and interest in and to this Lease or the Aircraft without the prior
written consent of Lessee, such consent not to be unreasonably withheld.

13.2 MERGER OF LESSEE

13.2.1 IN GENERAL

Lessee shall not consolidate or merge with or into any other Person under
circumstances in which Lessee is not the surviving corporation, or convey,
transfer or lease in one or more transactions all or substantially all of its
assets to any other Person, unless:

(a) such person is organized, existing and in good standing under
the Laws of the United States, any State of the United States or the District
Columbia;

(b) such person is a U.S. Air Carrier;

(c) such person executes and delivers to Lessor, Mortgagee and Owner
Participant a duly authorized, legal, valid, binding and enforceable agreement,
reasonably satisfactory in

LEASE AGREEMENT SPECIAL PAGE 49
765

form and substance to Lessor and Owner Participant, containing an effective
assumption by such person of the due and punctual performance and observance of
each covenant, agreement and condition in the Lessee Operative Agreements to be
performed or observed by Lessee;

(d) such person makes such filings and recordings, including,
without limitation, any filing or recording with the FAA pursuant to the Act,
as shall be necessary or desirable to evidence such consolidation or merger;

(e) immediately after giving effect to such consolidation or merger
(i) no Lease Event of Default shall have occurred and be continuing and (ii)
the Net Worth of such person shall not be less than the Net Worth of Lessee
immediately prior to such consolidation or merger; and

(f) Lessee shall deliver to Owner Participant, Mortgagee and Lessor
a certificate signed by the President or any Vice President of Lessee, and an
opinion of special counsel satisfactory to Owner Participant and Lessor,
together stating that such consolidation or merger and the assumption agreement
described in clause (c) above comply with this Section 13.2, that the
agreements entered into to effect such consolidation or merger and such
assumption agreement are legal, valid and binding obligations of such person,
and such other matters as Owner Participant and Lessor may reasonably request.

13.2.2 EFFECT OF MERGER

13.3 ASSIGNMENT AS SECURITY FOR LESSOR'S OBLIGATIONS

In order to secure the indebtedness evidenced by the Equipment Notes,
Lessor has agreed in the Trust Indenture, among

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other things, to assign to Mortgagee this Lease and to mortgage the Aircraft,
Airframe and Engines in favor of Mortgagee, subject to the reservations and
conditions therein set forth. Lessee hereby accepts and consents to the
assignment of all Lessor's right, title and interest in and to this Lease
pursuant to the terms of the Trust Indenture. In accordance with Section
3.3(c), Lessee agrees to pay directly to Mortgagee (or, after receipt by Lessee
of notice from Mortgagee of the discharge of the Trust Indenture, to Lessor),
all amounts of Rent (other than Excluded Payments) due or to become due
hereunder and assigned to Mortgagee and Lessee agrees that Mortgagee's right to
such payments hereunder shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, the circumstances
set forth in Section 16 hereof. Notwithstanding the foregoing assignment of
this Lease, the obligations of Lessee to Lessor to perform the terms and
conditions of this Lease shall remain in full force and effect.

13.4 SUCCESSOR OWNER TRUSTEE

SECTION 14. LEASE EVENTS OF DEFAULT

The occurrence of any one or more of the following circumstances,
conditions, acts or events, for any reason whatsoever and whether any such
circumstance, condition, act or event shall be voluntary or involuntary or come
about or be effected by operation of Law or pursuant to or in compliance with
any judgment, decree, order, rule or regulation of any Government Entity, shall
constitute a Lease Event of Default:

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767
14.1 PAYMENTS

Lessee shall fail to pay any amount of Interim Rent, Basic Rent, Renewal
Rent, Stipulated Loss Value or Termination Value within five (5) Business Days
after the same shall have become due; or Lessee shall fail to pay any other
amount due hereunder or under any other Lessee Operative Agreement when due and
such failure shall continue for a period in excess of five (5) Business Days
from and after the date of any written notice to Lessee from Lessor of the
failure to make such payment when due; provided that any such failure to pay
any Excluded Payment shall not constitute a Lease Event of Default until
written notice is given by the Owner Participant to Lessee and Mortgagee that
such failure constitutes a Lease Event of Default and such failure shall have
continued for a period in excess of five (5) Business Days after such notice.

14.2 INSURANCE

Lessee shall fail to carry and maintain, or cause to be carried and
maintained, insurance on and in respect of the Aircraft, Airframe and Engines
in accordance with the provisions of Section 11, or Lessee shall operate the
Aircraft, Airframe or Engines, or permit the Aircraft, Airframe or Engines to
be operated, at any time when such insurance shall not be in effect.

14.3 CORPORATE EXISTENCE

Lessee shall fail to maintain at all times its corporate existence (except
as permitted by Section 13.2), or Lessee shall otherwise wind-up, liquidate or
dissolve, or Lessee shall take or fail to take any action that would have the
effect of any of the foregoing.

14.4 CERTAIN COVENANTS

Lessee shall not observe, perform or comply with, or shall otherwise
breach, any of its obligations under Section 7.1 (other than Sections 7.1.3 and
7.1.4, which shall be subject to Section 14.5), 7.2 (in respect of the Aircraft
or Airframe) or 13.

14.5 OTHER COVENANTS

Lessee shall fail to observe, perform or comply with, or shall otherwise
breach, any other covenant, agreement or

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obligation set forth herein or in any other Lessee Operative Agreement (other
than the covenants, agreements and obligations set forth in Section 4.8(a) and
in the first sentence of Section 10.3.3(a) of this Lease, and in Section [3] of
the Tax Indemnity Agreement and in Section 8.3 of this Lease insofar as it
relates to Section [3] (except for Lessee's covenants in the last clause
thereof)) [AND SECTION 5] of the Tax Indemnity Agreement, and such failure
shall continue unremedied for a period of 30 days (or any shorter period as may
be expressly set forth in such other Lessee Operative Agreement) from and after
the date of written notice thereof to Lessee.

14.6 REPRESENTATIONS AND WARRANTIES

Any representation or warranty made by Lessee herein, in the Participation
Agreement or in any other Lessee Operative Agreement (other than the
representations and warranties of Lessee in Section [3] (except for Lessee's
covenants in the last clause thereof) [AND SECTION 5] of the Tax Indemnity
Agreement and in Section 8.3 of this Lease insofar as it relates to Section 3
of the Tax Indemnity Agreement) (a) shall prove to have been untrue, inaccurate
or misleading in any material respect as of the date made, (b) such untrue,
inaccurate or misleading representation or warranty is material at the time in
question, (c) and the same shall remain uncured for a period in excess of 30
days from and after the date of written notice thereof to Lessee.

14.7 BANKRUPTCY AND INSOLVENCY

(a) Lessee shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, or Lessee shall admit in writing its inability to pay its
debts generally as they come due, or does not pay its debts generally as they
become due or shall make a general assignment for the benefit of creditors, or
Lessee shall file a voluntary petition in bankruptcy or a voluntary petition or
an answer seeking reorganization, liquidation or other relief in a case under
any bankruptcy Laws or other insolvency Laws (as in effect at such time) or an
answer admitting the material allegations of a petition filed against Lessee in
any such case, or Lessee shall seek relief by voluntary petition, answer or
consent, under the provisions of any other bankruptcy or other similar Law
providing for the reorganization or winding-up of corporations (as in effect at
such time) or

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Lessee shall seek an agreement, composition, extension or adjustment with its
creditors under such Laws, or Lessee's board of directors shall adopt a
resolution authorizing corporate action in furtherance of any of the foregoing;
or

(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of Lessee, a receiver,
trustee or liquidator of Lessee or of any substantial part of its property, or
any substantial part of the property of Lessee shall be sequestered, or
granting any other relief in respect of Lessee as a debtor under any bankruptcy
Laws or other insolvency Laws (as in effect at such time), and any such order,
judgment or decree of appointment or sequestration shall remain in force
undismissed, unstayed and unvacated for a period of 60 days after the date of
entry thereof; or

(c) a petition against Lessee in a case under any bankruptcy Laws or
other insolvency Laws (as in effect at such time) is filed and not withdrawn or
dismissed within 60 days thereafter, or if, under the provisions of any Law
providing for reorganization or winding-up of corporations which may apply to
Lessee, any court of competent jurisdiction assumes jurisdiction, custody or
control of Lessee or of any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed and
unterminated for a period of 60 days.

SECTION 15. REMEDIES AND WAIVERS

15.1 REMEDIES

15.1.1 RETURN AND REPOSSESSION

Lessor may cause Lessee, upon giving written notice to Lessee, to return
promptly, and Lessee shall return promptly, all or any part of the Aircraft,
Airframe and Engines as Lessor may so demand, to Lessor or its order in the
manner and condition required by, and otherwise in accordance with, all the
provisions of Section 5 as if the Aircraft or such part were being returned at
the end of the Base Lease Term or any Renewal Lease Term or Lessor, at its
option, may enter upon the premises where the

LEASE AGREEMENT SPECIAL PAGE 54
770

Aircraft, Airframe or any Engine, or any part thereof, are located and take
immediate possession of and remove the same by summary proceedings or
otherwise, all without liability accruing to Lessor for or by reason of such
entry or taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise, and Lessee expressly waives any
right it may have under applicable Law to a hearing prior to repossession of
the Aircraft, Airframe or any Engine, or any part thereof.

15.1.2 SALE AND USE

Lessor may sell the Aircraft, Airframe or any Engine, or any part thereof,
at public or private sale, at such times and places, and to such Persons
(including Lessor, Mortgagee or any Participant), as Lessor may determine and,
without limiting the generality of the provisions of this Section 15, Lessor
may hold Lessee liable for the payment of any Basic Rent or Renewal Rent
remaining unpaid at the time of such sale and relating to any period prior to
the date of such sale; or Lessor may otherwise dispose of, hold, use, operate,
lease to others or keep idle the Aircraft, Airframe or any Engine, or any part
thereof, 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,
and without any duty to account to Lessee with respect to such action or
inaction or for any proceeds with respect thereto (except in connection with
any calculation of liquidated damages under Section 15.1.3(b) below and except
to the extent that such proceeds would constitute, under applicable Law, a
mitigation of Lessor's damages suffered or incurred as a result of the subject
Lease Event of Default).

15.1.3 CERTAIN LIQUIDATED DAMAGES

Whether or not Lessor shall have exercised, or shall thereafter at any
time exercise, any of its rights under Section 15.1.1 or 15.1.2 with respect to
the Aircraft, Airframe or any Engine, or any part thereof, Lessor, by written
notice to Lessee specifying a payment date (which shall be a Termination Value
Date occurring not less than 10 days after the date of such notice), may demand
Lessee to pay to Lessor, and Lessee shall pay to Lessor, on the payment date so
specified and in the manner and in funds of the type specified in Section 3.3,
as liquidated damages for loss of a bargain and not as a penalty (in lieu of
the Interim Rent, Basic Rent or Renewal Rent, as the case may be, for the
Aircraft in respect of all periods commencing on or after

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the date specified for payment in such notice), the following amounts:

(a) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case
may be, due at any time prior to the Termination Value Date specified in such
notice; plus

(b) whichever of the following amounts Lessor, in its sole
discretion shall specify in such notice:

(i) an amount equal to the excess, if any, of the
Termination Value for the Aircraft, Airframe or any Engine, or any part
thereof, as the case may be, computed as of the Termination Value Date
specified in such notice, over the Fair Market Rental Value of the
Aircraft, Airframe or any Engine, or any part thereof, as the case may be,
for the remainder of the Term, after discounting such Fair Market Rental
Value to its then present value (at a rate per annum equal to ten percent,
compounded semi-annually) as of the Termination Value Date specified in
such notice, or

(ii) an amount equal to the excess, if any, of the
Termination Value for the Aircraft, Airframe or any Engine, or any part
thereof, as the case may be, computed as of the Termination Value Date
specified in such notice, over the Fair Market Sales Value of the
Aircraft, Airframe or any Engine, or any part thereof, as the case may be,
as of the Termination Value Date specified in such notice; plus

(c) interest on the amounts specified in the foregoing clause (a)
at the Payment Due Rate from and including the date on which any such amount
was due to the date of payment of such amount in full; plus

(d) if the Termination Value Date specified in such notice is the
last day of the Interim Lease Term or a Payment Date, all Interim Rent, Basic
Rent or Renewal Rent, as the case may be, due on the last day of the Interim
Lease Term or such Payment Date, as the case may be (other than, in the case of
such Basic Rent or Renewal Rent, the portion (if any) of such Basic Rent or
Renewal Rent that is designated in Schedule 2 or Section 17.2.2, as the case
may be, as a payment in advance); plus

(e) interest on the amount specified in the foregoing clause (b)(i)
or (b)(ii), according to Lessor's election, and interest on the amount
specified in the foregoing clause (d), in each case

LEASE AGREEMENT SPECIAL PAGE 56
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at the Payment Due Rate from and including the Termination Value Date specified
in such notice to the date of payment of such amount in full.

15.1.4 LIQUIDATED DAMAGES UPON SALE

If Lessor, pursuant to Section 15.1.2 or applicable Law, shall have sold
the Aircraft, Airframe or any Engine, or any part thereof, Lessor, in lieu of
exercising its rights under Section 15.1.3 with respect to the Aircraft,
Airframe or any Engine, or any part thereof, as the case may be, may, if Lessor
shall so elect, upon giving written notice to Lessee, demand Lessee to pay
Lessor, and Lessee shall pay to Lessor, on the date of such sale and in the
manner and in funds of the type specified in Section 3.3, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the Interim Rent, Basic
Rent or Renewal Rent, as the case may be, for the Aircraft in respect of all
periods commencing on or after the date of such sale), the following amounts:

(a) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case may
be, (i) due at any time prior to the Termination Value Date
immediately preceding the date of such sale, or (ii) if such sale
occurs on a Termination Value Date, due at any time prior to such
Date; plus

(b) an amount equal to the excess, if any, of the Termination Value of
the Aircraft, Airframe or any Engine, or any part thereof, as the
case may be, computed as of the Termination Value Date used in the
foregoing clause (a) for the computation of unpaid Rent, over (i) the
proceeds of such sale, or (ii) if such sale is a private sale and is
made to Lessor, Mortgagee, a Participant or any Affiliate thereof,
the Fair Market Sales Value of the Aircraft, Airframe or any Engine,
or any part thereof, as the case may be, determined as of the date of
such sale; plus

(c) all brokerage and other out-of-pocket fees and expenses incurred by
Lessor, Mortgagee and any Participant in connection with such sale;
plus

(d) interest on the amounts specified in the foregoing clause (a) at the
Payment Due Rate from and including

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the date on which any such amount was due to the date of payment of
such amount in full; plus

(e) if such sale occurs on a Termination Value Date which is the last day
of the Interim Lease Term or a Payment Date, all Interim Rent, Basic
Rent or Renewal Rent, as the case may be, due on such Termination
Value Date (other than, in the case of such Basic Rent or Renewal
Rent, the portion (if any) of such Basic Rent or Renewal Rent that is
designated in Schedule 2 or Section 17.2.2, as the case may be, as a
payment in advance); plus

(f) interest on the sum of the amounts specified in the foregoing clauses
(b), (c) and (e), at the Payment Due Rate from and including the date
of such sale to the date of payment of such amounts in full.

15.1.5 RESCISSION

Lessor may (i) at its option, rescind or terminate this Lease as to the
Aircraft, Airframe or any Engine, or any part thereof, or (ii) exercise any
other right or remedy that may be available to it under applicable Law or
proceed by appropriate court action to enforce the terms hereof or to recover
damages for the breach hereof, including, without limitation, Lessee's
agreement to lease the Aircraft for the Term and to pay Rent.

15.1.6 OTHER REMEDIES

In addition to the foregoing remedies (but without duplication of amounts
otherwise paid under this Section 15), Lessee shall be liable for any and all
unpaid Rent due hereunder before, during or after (except as otherwise provided
herein) the exercise of any of the foregoing remedies and for all attorneys'
fees and other costs and expenses of Lessor, Mortgagee and the Participants,
including, without limitation, interest on overdue Rent at the rate as herein
provided, incurred by reason of the occurrence of any Lease Event of Default or
the exercise of Lessor's remedies with respect thereto, including all costs and
expenses incurred in connection with the return of the Aircraft, Airframe or
any Engine, or any part thereof, in accordance with the terms of Section 5 or
in placing the Aircraft, Airframe or any Engine, or any part thereof, in the
condition and airworthiness required by Section 5.

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15.2 LIMITATIONS UNDER CRAF

Notwithstanding the provisions of Section 15.1, during any period that the
Aircraft, Airframe or any Engine is subject to CRAF in accordance with the
provisions of Section 7.2.3 and in the possession of the U.S. Government,
Lessor shall not, as a result of any Lease Event of Default, exercise its
remedies hereunder in such manner as to limit Lessee's control under this Lease
(or any Permitted Sublessee's control under any Permitted Sublease) of the
Aircraft, Airframe or such Engine, unless at least 30 days' (or such other
period as may then be applicable under CRAF) written notice of default
hereunder shall have been given by Lessor or Mortgagee by registered or
certified mail to Lessee (and any Permitted Sublessee) with a copy to the
Contracting Officer Representative or Representatives for the Military Airlift
Command of the United States Air Force to whom notices must be given under the
contract governing Lessee's (or any Permitted Sublessee's) participation in
CRAF with respect to the Aircraft, Airframe or any Engine.

15.3 RIGHT TO PERFORM FOR LESSEE

If Lessee 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, Lessor, Mortgagee or Owner Participant may (but shall not be obligated
to) make such payment or perform or comply with such agreement, and the amount
of such payment and the amount of the expenses of Lessor, Mortgagee or Owner
Participant incurred in connection with such payment or the performance of or
compliance with such agreement, as the case may be, together with interest
thereon at the Payment Due Rate, shall be deemed Supplemental Rent, payable by
Lessee upon demand. No such payment, performance or compliance shall be deemed
to cure any Lease Default or Lease Event of Default or otherwise relieve Lessee
of its obligations with respect thereto.

15.4 DETERMINATION OF FAIR MARKET RENTAL VALUE AND FAIR MARKET SALES
VALUE

For the purpose of this Section 15, the "Fair Market Rental Value" or the
"Fair Market Sales Value" of the Aircraft, Airframe or any Engine, or any part
thereof shall be determined on an "as is, where is" basis and shall take into
account customary brokerage and other out-of-pocket fees and expenses which
typically would be incurred in connection with a re-lease or sale

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of the Aircraft, Airframe or any Engine. Any such determination shall be made
by an Appraiser selected by Lessor and the costs and expenses associated
therewith shall be borne by Lessee, unless Lessor does not obtain possession of
the Aircraft, Airframe and Engines pursuant to this Section 15, in which case
an Appraiser shall not be appointed and Fair Market Rental Value and Fair
Market Sales Value for purposes of this Section 15 shall be zero.

15.5 LESSOR APPOINTED ATTORNEY-IN-FACT

Lessee hereby appoints Lessor as the attorney-in-fact of Lessee, with full
authority in the place and stead of Lessee and in the name of Lessee or
otherwise, for the purpose of carrying out the provisions of this and any other
Operative Agreement and taking any action and executing any instrument that
Lessor may deem necessary or advisable to accomplish the purposes hereof;
provided, however, that Lessor may only take action or execute instruments
under this Section 15.5 after a Lease Event of Default has occurred and is
continuing. Lessee hereby declares that the foregoing powers are granted for
valuable consideration, constitute powers granted as security for the
performance of the obligations of Lessee hereunder, are coupled with an
interest and shall be irrevocable. Without limiting the generality of the
foregoing or any other rights of Lessor or Mortgagee under the Operative
Agreements, Lessor shall, as between Lessor and Lessee, upon the occurrence and
during the continuation of a Lease Event of Default have the sole and exclusive
right and power to (i) settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to or pertaining to the Aircraft,
Airframe or any Engine, or this Lease and (ii) make proof of loss, appear in
and prosecute any action arising from any policy or policies of insurance
maintained pursuant to this Lease, and settle, adjust or compromise any claims
for loss, damage or destruction under, or take any other action in respect of,
any such policy or policies.

15.6 REMEDIES CUMULATIVE

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limitation of every other right, power, remedy and privilege given under the
Operative Agreements or now or hereafter existing at law or in equity. Each and
every right, power, remedy and privilege of Lessor under this Lease and any
other Operative Agreement may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by Lessor. All such
rights, powers, remedies and privileges shall be cumulative and not mutually
exclusive, and the exercise of one shall not be deemed a waiver of the right to
exercise any other. Lessee hereby waives to the extent permitted by applicable
Law any right which it may have to require Lessor to choose or elect remedies.

SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC.

(a) Lessee's obligation to pay Rent and all other amounts payable
hereunder, under the Participation Agreement or under any other Lessee
Operative Agreement shall be absolute and unconditional, and shall be construed
as covenants separate and independent from the agreements or undertakings of
any other Person, including, without limitation, Lessor, Mortgagee or any
Participant, and shall not be affected by any event or circumstance, including,
without limitation: (i) any setoff, counterclaim, recoupment, defense or other
right that Lessee may have against Lessor, Mortgagee, any Participant, any Note
Holder, Airframe Manufacturer, Engine Manufacturer, any Indemnitee or any other
Person for any reason whatsoever; (ii) any defect in the title, airworthiness,
condition, design, operation or fitness for use of, or any damage to or loss or
destruction of, the Aircraft, Airframe or any Engine, or any interruption or
cessation in the use or possession thereof by Lessee for any reason whatsoever;
(iii) any insolvency, bankruptcy, reorganization or similar proceedings by or
against Lessee or any other Person; (iv) any restriction, prevention or
curtailment of or interference with any use of the Aircraft, Airframe or any
Engine, or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of Lessee or
Lessor; (vi) any claim that Lessee has or might have against any Person; (vii)
any failure on the part of Lessor, Mortgagee or any Participant to perform or
comply with any of the terms of this Lease or any other Operative Agreement;
(viii) any invalidity or unenforceability or disaffirmance of this Lease or any
provision hereof or any of the other Operative Agreements or any provision
thereof, in each case whether against or by Lessee

LEASE AGREEMENT SPECIAL PAGE 61
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or otherwise; or (ix) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

(b) If for any reason whatsoever this Lease shall be terminated in
whole or in part by operation of law or otherwise except as specifically
provided herein, Lessee nonetheless agrees to pay an amount equal to each
Interim Rent, Basic Rent, Renewal Rent and Supplemental Rent payment at the
time such payment would have become due and payable in accordance with the
terms hereof had this Agreement not been terminated in whole or in part. All
Rent payable by Lessee shall be paid without notice or demand (except as
otherwise expressly provided) and without abatement, suspension, deferment,
deduction, diminution or proration by reason of any circumstance or occurrence
whatsoever. Lessee hereby waives, to the extent permitted by applicable law,
any and all rights that it may now have or that at any time hereafter may be
conferred upon it, by statute or otherwise, to terminate, cancel, quit or
surrender this Agreement or any part hereof, or to any abatement, suppression,
deferment, diminution, reduction or proration of Rent, except in accordance
with the express terms hereof. Each payment of Rent made by Lessee shall be
final as to Lessor and Lessee and, except for any manifest clerical
computational error, Lessee will not seek to recover all or any part of any
such payment of Rent for any reason whatsoever.

(c) All obligations, liabilities, covenants and undertakings of
Lessee in this Agreement or in any other Operative Agreement shall be
performed, observed and complied with at Lessee's sole cost and expense,
whether or not so expressed, unless otherwise expressly provided.

(d) Nothing set forth in this Section 16 shall be construed to
prohibit Lessee from separately pursuing any claim that it may have from time
to time against Lessor or any other Person with respect to any matter (other
than the absolute and unconditional nature of Lessee's obligations hereunder to
pay Rent, and other than the matters specified in paragraphs (b) and (c)
above).

SECTION 17. RENEWAL AND PURCHASE OPTIONS

17.1 NOTICES GENERALLY

(a) At least 180 days but not more than 360 days prior to the
Scheduled Expiration Date, Lessee may provide notice to Lessor that Lessee may
exercise either the option to extend the

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leasing of the Aircraft for the First Renewal Lease Term pursuant to Section
17.2 or the option to purchase the Aircraft on the Scheduled Expiration Date
pursuant to Section 17.3. At least 180 days but not more than 360 days prior to
the First Renewal Term Expiration Date, Lessee may, if it has leased the
Aircraft during the First Renewal Lease Term, provide notice to Lessor that
Lessee may exercise either the option to extend the leasing of the Aircraft for
the Second Renewal Lease Term pursuant to Section 17.2, or the option to
purchase the Aircraft on the First Renewal Term Expiration Date pursuant to
Section 17.3. At least 180 days but not more than 360 days prior to the Second
Renewal Term Expiration Date, Lessee may, if it has leased the Aircraft during
the Second Renewal Lease Term, provide notice to Lessor that Lessee may
exercise either the option to extend the leasing of the Aircraft for the Third
Renewal Lease Term pursuant to Section 17.2, or the option to purchase the
Aircraft on the Second Renewal Term Expiration Date pursuant to Section 17.3.
At least 180 days but not more than 360 days prior to the Third Renewal Term
Expiration Date, Lessee may, if it has leased the Aircraft during the Third
Renewal Lease Term, provide notice to Lessor that Lessee may exercise either
the option to extend the leasing of the Aircraft for the Fourth Renewal Lease
Term pursuant to Section 17.2, or the option to purchase the Aircraft on the
Third Renewal Term Expiration Date pursuant to Section 17.3. Any such notice (a
"Preliminary Notice") shall be irrevocable.

(c) At least 180 days but not more than 360 days prior to the last
day of the Fourth Renewal Lease Term, Lessee may provide notice (the
"Definitive Purchase Notice") to Lessor that Lessee shall exercise the option
to purchase the Aircraft on the Fourth Renewal Term Expiration Date pursuant to
Section 17.3. Any such Definitive Purchase Notice shall be irrevocable.

17.2 RENEWAL OPTIONS

17.2.1 RENEWAL NOTICE

(a) If Lessee has given a Preliminary Notice, as specified in
Section 17.1, and subject to the terms and conditions of this

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Section 17.2, Lessee may exercise its option to extend the leasing of the
Aircraft hereunder, on the same terms, provisions and conditions (except as
contemplated by this Section 17) set forth herein and in the other Lessee
Operative Agreements with respect to the Base Lease Term, by delivery of a
notice (a "Renewal Notice") to Lessor:

(i) in the case of the First Renewal Lease Term, not more
than 180 days nor less than 120 days prior to the Scheduled Expiration
Date,

(ii) in the case of the Second Renewal Lease Term, not more
than 180 days nor less than 120 days prior to the First Renewal Term
Expiration Date,

(iii) in the case of the Third Renewal Lease Term, not more
than 180 days nor less than 120 days prior to the Second Renewal Term
Expiration Date; and

(iv) in the case of the Fourth Renewal Lease Term, not more
than 180 days nor less than 120 days prior to the Third Renewal Lease Term
Expiration Date.

(b) Notwithstanding anything to the contrary in this Agreement or
any other Operative Agreement:

(i) No Preliminary Notice or Renewal Notice shall be binding
on Lessor or oblige Lessor to extend the leasing of the Aircraft hereunder
for the First Renewal Lease Term, the Second Renewal Lease Term, the Third
Renewal Lease Term or the Fourth Renewal Lease Term, as the case may be,
if any Lease Default or Lease Event of Default shall have occurred and be
continuing on and as of either the date of such Preliminary Notice or
Renewal Notice or the date that such Renewal Lease Term would otherwise
commence.

(ii) Any Renewal Notice shall be irrevocable and shall
constitute an unconditional obligation of Lessee to extend the leasing of
the Aircraft hereunder for the First Renewal Lease Term, the Second
Renewal Lease Term, the Third Renewal Lease Term or the Fourth Renewal
Lease Term, as the case may be.

(iii) Lessee shall not be entitled to give any Renewal Notice
if it has (i) not delivered a Preliminary Notice or (ii) delivered a
Purchase Notice to Lessor.

LEASE AGREEMENT SPECIAL PAGE 64
780

17.2.2 RENEWAL RENT

(a) During the Renewal Lease Term, Lessee shall pay to Lessor on
each Payment Date, in the manner and in the funds of the type specified in
Section 3.3, Renewal Rent in advance. Each installment of Renewal Rent shall,
for all purposes hereof (including, without limitation, for purposes of Section
467 of the Code), be accrued on a daily basis over the three-month period
beginning on the Payment Date on which such installment is scheduled to be
made; and as security for the obligations of Lessee under this Lease and the
other Lessee Operative Agreements, Lessee hereby grants to Lessor a security
interest in all amounts of Renewal Rent which may be paid but unaccrued
hereunder from time to time.

(b) The Renewal Rent payable by Lessee on each Payment Date during
any First, Second, Third or Fourth Renewal Lease Term shall be the lower of (i)
an amount equal to one-quarter of the average annual Basic Rent payable during
the Interim Term and the Base Lease Term, or (ii) the Fair Market Rental Value
of the Aircraft for such First, Second, Third or Fourth Renewal Lease Term. Any
such Fair Market Rental Value shall be determined not more than 170 days and
not less than 150 days prior to the date of commencement of such First, Second,
Third or Fourth Renewal Lease Term, as the case may be, by mutual agreement of
Lessor and Lessee or, if they shall be unable to agree, by an appraisal in
accordance with Section 17.4.

17.2.3 STIPULATED LOSS AND TERMINATION VALUES

(a) For any First, Second, Third or Fourth Renewal Lease Term,
Stipulated Loss Value Dates and Termination Value Dates shall be extended
throughout such Renewal Lease Term on the same days and for the same months as
during the Base Lease Term.

(b) Stipulated Loss Value and Termination Value amounts that are
payable during any such First, Second, Third or Fourth Renewal Lease Term shall
be determined at the same time that the Renewal Rent for such Renewal Lease
Term is determined under Section 17.2.2. Stipulated Loss Values for any such
Lease Term shall, throughout such Renewal Lease Term, be equal to the greater
of (i) the Fair Market Sales Value of the Aircraft, computed as of the first
day of such Renewal Lease Term, and (ii) the Minimum Residual Percentage.
Termination Values for any such Renewal Lease Term shall, throughout such
Renewal Lease

LEASE AGREEMENT SPECIAL PAGE 65
781

Term, be equal to the greater of (i) the Fair Market Sales Value of the
Aircraft, computed as of the first day of such Renewal Lease Term, and (ii) the
Minimum Value Percentage.

17.3 PURCHASE OPTION

17.3.1 PURCHASE NOTICE

(a) Subject to Section 17.1 and the terms and conditions of this
Section 17.3, Lessee may elect to purchase the Aircraft, on any Purchase Date
occurring on or after the Scheduled Expiration Date, at a purchase price equal
to the Fair Market Sales Value of the Aircraft computed as of the Purchase
Date.

(b) Lessee may exercise such option to purchase the Aircraft, by
delivery of a notice (a "Purchase Notice") to Lessor not more than 180 days nor
less than 120 days prior to the Purchase Date specified in such Purchase
Notice.

(i) No Preliminary Notice, Definitive Purchase Notice or
Purchase Notice shall be binding on Lessor or obligate Lessor to sell the
Aircraft to Lessee hereunder if any Lease Default or Lease Event of
Default shall have occurred and be continuing on and as of either the date
of such Preliminary Notice, Definitive Purchase Notice or Purchase Notice
or the proposed Purchase Date.

(ii) Any Purchase Notice (whether delivered or deemed to have
been delivered) shall be irrevocable and shall constitute an unconditional
obligation of Lessee to purchase the Aircraft under this Section 17.3.

(iii) No Preliminary Notice, Definitive Purchase Notice or
Purchase Notice shall be binding on Lessor or obligate Lessor to sell the
Aircraft to Lessee hereunder if the Fair Market Sales Value of the
Aircraft is determined to be less

LEASE AGREEMENT SPECIAL PAGE 66
782

than an amount equal to the Minimum Residual Percentage multiplied by
Lessor's Cost.

(iv) Lessee shall not be entitled to give any Purchase Notice
in respect of any Purchase Date if it has delivered a Renewal Notice for a
Renewal Lease Term that would commence immediately following such Purchase
Date.

17.3.2 PURCHASE PRICE

The Fair Market Sales Value of the Aircraft shall be determined not more
than 170 days and not less than 150 days prior to the applicable Purchase Date
by mutual agreement of Lessor and Lessee or, if they shall be unable to agree,
by an appraisal in accordance with Section 17.4.

17.3.3 TITLE

Upon full and final payment by Lessee of (a) the applicable Fair Market
Sales Value of the Aircraft, (b) all unpaid Rent due and payable through and
including the Purchase Date and (c) all other amounts due and payable by Lessee
under this Agreement, the Participation Agreement or any other Operative
Agreement, Lessor will transfer to Lessee title to the Aircraft in accordance
with Section 4.6.

17.4 APPRAISALS

Whenever Fair Market Rental Value or Fair Market Sales Value of the
Aircraft is required to be determined by an appraisal under this Section 17,
Lessee and Lessor shall appoint a mutually satisfactory Appraiser to conduct
such appraisal. If Lessee and Lessor fail to agree upon a satisfactory
Appraiser then each shall promptly appoint a separate Appraiser and such
Appraisers shall jointly determine such amount. If either Lessee or Lessor
fails to so appoint an Appraiser, the determination of the single Appraiser
appointed shall be final. If two Appraisers are appointed and within 7 days
after the appointment of the latter of such two Appraisers, they cannot agree
upon such amount, such two Appraisers shall, within 8 days after such latter
appointment, appoint a third Appraiser and such amount shall be determined by
such three Appraisers, who shall make their separate appraisals within 7 days
following the appointment of the third Appraiser, and any determination so made
shall be conclusive and binding upon Lessor and Lessee. If no such third
Appraiser is appointed within such 8-day period, either Lessor or

LEASE AGREEMENT SPECIAL PAGE 67
783

Lessee may apply to the American Arbitration Association to make such
appointment, and both parties shall be bound by such appointment. The foregoing
appraisal procedure shall in any event be completed no less than 125 days
before the end of the Base Lease Term or the Renewal Lease Term, as the case
may be. If three Appraisers are appointed and the difference between the
determination which is farther from the middle determination and the middle
determination is more than 125% of the difference between the middle
determination and the third determination, then such farther determination
shall be excluded, the remaining two determinations shall be averaged and such
average shall be final and binding upon Lessor and Lessee. Otherwise, the
average of all three determinations shall be final and binding upon Lessor and
Lessee. The fees and expenses of all such Appraisers and such appraisal
procedure, together with the reasonable out-of-pocket fees and expenses of
Lessor (including, without limitation, attorney's fees and expenses) shall be
borne by Lessee.

SECTION 18. MISCELLANEOUS

18.1 AMENDMENTS

No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate or otherwise vary and is signed by Lessor and Lessee. Each such
amendment, supplement, waiver, modification, discharge, termination or variance
shall be effective only in the specific instance and for the specific purpose
for which it is given. No provision of this Agreement shall be varied or
contradicted by oral communication, course of dealing or performance or other
manner not set forth in an agreement, document or instrument in writing and
signed by Lessor and Lessee.

18.2 SEVERABILITY

LEASE AGREEMENT SPECIAL PAGE 68
784

other jurisdiction. If, however, any Law pursuant to which such provisions are
held invalid, illegal or unenforceable may be waived, such Law is hereby waived
by the parties hereto to the full extent permitted, to the end that this
Agreement shall be deemed to be a valid and binding agreement in all respects,
enforceable in accordance with its terms.

18.3 SURVIVAL

The representations, warranties, indemnities and covenants set forth
herein shall survive the making available of the respective Commitments by
Participants, the delivery or return of the Aircraft, the Transfer of any
interest of Owner Participant in this Agreement, the other Operative
Agreements, the Trust Estate and the Trust Agreement, the Transfer of any
interest by any Note Holder of its Equipment Notes and the expiration or other
termination of this Agreement or any other Operative Agreement.

18.4 REPRODUCTION OF DOCUMENTS

18.5 COUNTERPARTS

This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.

LEASE AGREEMENT SPECIAL PAGE 69
785

18.6 NO WAIVER

No failure on the part of Lessor to exercise, and no delay by Lessor in
exercising, any of its rights, powers, remedies or privileges under this
Agreement or provided at Law, in equity or otherwise shall impair, prejudice or
constitute a waiver of any such right, power, remedy or privilege or be
construed as a waiver of any breach hereof or default hereunder or as an
acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise
thereof by Lessor or the exercise of any other right, power, remedy or
privilege by Lessor. No notice to or demand on Lessee in any case shall, unless
otherwise required under this Agreement, entitle Lessee to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of Lessor to any other or further action in any circumstances
without notice or demand.

18.7 NOTICES

Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers and other
communications required or permitted to be made, given, furnished or filed
hereunder shall be in writing (it being understood that the specification of a
writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this
Agreement and shall be personally delivered, sent by facsimile or
telecommunication transmission (which in either case provides written
confirmation to the sender of its delivery), sent by registered mail or
certified mail, return receipt requested, postage prepaid, or sent by overnight
courier service, in each case to the respective address or facsimile number set
forth for such party in Schedule 1 to the Participation Agreement, or to such
other address or number as either party hereto may hereafter specify by notice
to the other party hereto. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be effective when
received or, if made, given, furnished or filed (a) by facsimile or
telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.

LEASE AGREEMENT SPECIAL PAGE 70
786

18.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

(a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

(b) EACH PARTY HERETO IRREVOCABLY AGREES, ACCEPTS AND SUBMITS FOR
ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT.

(c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH IN SECTION 18.7. EACH PARTY HERETO HEREBY AGREES THAT SERVICE
UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SECTION
18.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY,
AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO
GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN
ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED IN
ANY ACTION OR PROCEEDING BASED THEREON.

(d) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE, OR OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN
ANY OF THE ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR THAT
THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY
SUCH COURTS.

(e) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED
UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT.

LEASE AGREEMENT SPECIAL PAGE 71
787

18.9 THIRD-PARTY BENEFICIARY

This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than Mortgagee, the Participants, the Indenture Indemnitees
and the persons referred to in Section 4.7, in each case to the extent
expressly provided herein) with any rights of any nature whatsoever against
either of the parties hereto, and no person not a party hereto (other than
Mortgagee, the Participants, the Indenture Indemnitees and the persons referred
to in Section 4.7, in each case to the extent expressly provided herein) shall
have any right, power or privilege in respect of, or have any benefit or
interest arising out of, this Agreement.

18.10 ENTIRE AGREEMENT

This Agreement, together with the other Operative Agreements, on and as of
the date hereof constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
understandings or agreements, whether written or oral, between the parties
hereto with respect to such subject matter are hereby superseded in their
entireties.

[This space intentionally left blank.]

LEASE AGREEMENT SPECIAL PAGE 72
788

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual
capacity, except as
expressly provided herein, but
solely as Owner Trustee under
the Trust Agreement

By
-----------------------------------
Name:
Title:

CONTINENTAL AIRLINES, INC.,
as Lessee

By
-----------------------------------
Name:
Title:

Receipt of this original counterpart of the foregoing Lease Agreement is
hereby acknowledged on this ____ day of _________, 199 .

WILMINGTON TRUST COMPANY,
as Mortgagee

By
-----------------------------------
Name:
Title:

LEASE AGREEMENT SPECIAL PAGE 73
789

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its
individual capacity, except
as expressly provided herein,
but solely as Owner Trustee
under the Trust Agreement

By
-----------------------------------
Name:
Title:

CONTINENTAL AIRLINES, INC.,
as Lessee

By
-----------------------------------
Name:
Title:

[ANNEX A - SEE PARTICIPATION AGREEMENT ANNEX A]
[ANNEXES B-D OMITTED]
[SCHEDULES 1-4 OMITTED]

LEASE AGREEMENT SPECIAL PAGE 74
790
----------------------------
EXHIBIT A - LEASE SUPPLEMENT
LEASE AGREEMENT
----------------------------

LEASE SUPPLEMENT NO.__

LEASE SUPPLEMENT No. __, dated ________, 199_, between FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Owner Trustee under the Trust Agreement ,
dated as of , with the Owner Participant named therein (such Owner Trustee, in
its capacity as such Owner Trustee being herein called "Lessor"), and
CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee ("Lessee").

Lessor and Lessee have heretofore entered into that certain Lease
Agreement , dated as of , relating to one Boeing Model aircraft (herein called
the "Lease" and the defined terms therein being hereinafter used with the same
meanings). The Lease provides for the execution and delivery of this Lease
Supplement for the purpose of leasing the Airframe and Engines under the Lease
as and when delivered by Lessor to Lessee in accordance with the terms thereof.

NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:

1. Lessee has been duly authorized by Lessor to accept, and does hereby
irrevocably accept on behalf of Lessor delivery of the Aircraft from Airframe
Manufacturer under, and for all purposes of, the Aircraft ▇▇▇▇ of Sale, the
Participation Agreement and the Purchase Agreement Assignment.

2. Lessor hereby delivers and leases to Lessee under the Lease and Lessee
hereby accepts and leases from Lessor under the Lease the following described
Boeing aircraft (the "Aircraft"), which Aircraft as of the date hereof consists
of the following components:

EXHIBIT A TO LEASE AGREEMENT SPECIAL PAGE 1
791

(i) Airframe: U.S. Registration No. ___________; manufacturer's
serial no. _________; and

(ii) Engines: two (2) engines bearing, respectively,
manufacturer's serial nos. and (each of which engines has 750 or more
rated takeoff horsepower or the equivalent of such horsepower).

3. The Delivery Date of the Aircraft is the date of this Lease Supplement
set forth in the opening paragraph hereof.

4. Lessee hereby confirms its agreement to pay Lessor Rent for the
Aircraft in accordance with Sections 3 and 17, and the other provisions, of
the Lease.

5. Lessee hereby confirms to Lessor that Lessee has duly and irrevocably
accepted the Aircraft under and for all purposes hereof, of the Lease and of
the other Lessee Operative Agreements.

6. All of the terms and provisions of this Lease Supplement are hereby
incorporated by reference in the Lease to the same extent as if fully set forth
therein.

7. 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.

8. To the extent, if any, that this Lease Supplement constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction), no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
original executed counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Mortgagee on the signature page
thereof.

[This space intentionally left blank.]

EXHIBIT A TO LEASE AGREEMENT SPECIAL PAGE 2
792
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its
individual capacity, except
as expressly provided herein,
but solely as Owner Trustee
under the Trust Agreement

By
------------------------------------
Name:
Title:

CONTINENTAL AIRLINES, INC.,
as Lessee

By
------------------------------------
Name:
Title:

EXHIBIT A TO LEASE AGREEMENT SPECIAL PAGE 3
793

IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual
capacity, except as
expressly provided herein, but
solely as Owner Trustee under
the Trust Agreement

By
------------------------------------
Name:
Title:

CONTINENTAL AIRLINES, INC.,
as Lessee

By
------------------------------------
Name:
Title:

Receipt of this original counterpart of the foregoing Lease Supplement is
hereby acknowledged on this ____ day of _________, 199 .

WILMINGTON TRUST COMPANY,
as Mortgagee

By
------------------------------------
Name:
Title:

EXHIBIT A TO LEASE AGREEMENT SPECIAL PAGE 4
794
-----------------------------------
SCHEDULE 5 - PERMITTED AIR CARRIERS
LEASE AGREEMENT
-----------------------------------

PERMITTED AIR CARRIERS

Aer Lingus
Air Canada
Air France
Air Inter
Air New Zealand
Alitalia
All Nippon
Ansett Airlines of Australia
Australian Airlines
Braathens S.A.F.E.
British Airways
British Midland
Britannia Airways
Canadian Airlines, International
Cathay Pacific Air Lines Ltd.
Condor (Sub of Lufthansa)
Finnair
Icelandair
Iberia Air Lines of Spain
Japan Air Lines
Japan Air System
KLM
Lufthansa
Lux Air
Malaysian Airlines
Martinair
Monarch Airlines
Olympic
Phillipine Airlines
Qantas Airways Ltd.
Sabena
Scandinavian Airlines System
Singapore Airlines Limited
Swissair
TAP (Portugal)
Thai Airways
Transavia
Union de Transports Aeriens

SCHEDULE 5 TO LEASE AGREEMENT SPECIAL PAGE 1
795
---------------------
SCHEDULE 6 - PLACARDS
LEASE AGREEMENT
---------------------

PLACARDS

Leased from

First Security Bank, National Association,
not in its individual capacity but solely as
Owner Trustee, Owner and Lessor

and
Mortgaged to

Wilmington Trust Company,
not in its individual capacity but solely as Mortgagee

SCHEDULE 6 TO LEASE AGREEMENT SPECIAL PAGE 1
796

Exhibit D-3 to
the Note Purchase Agreement

FORM OF SPECIAL INDENTURE

797

Exhibit D-3
to the Note Purchase Agreement

TRUST INDENTURE AND MORTGAGE

Dated as of ___________, 199_

Between

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,

Owner Trustee

and

WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Loan Trustee,

Loan Trustee

_________________________________________________________________

EQUIPMENT NOTES COVERING
ONE BOEING ________ AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ _______
LEASED BY CONTINENTAL AIRLINES, INC.

_________________________________________________________________
798
TABLE OF CONTENTS

Page

GRANTING CLAUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE I

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE II

THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02. Issuance and Terms of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.03. Payments from Trust Indenture Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.06. Termination of Interest in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Registration, Transfer and Exchange of Equipment Notes . . . . . . . . . . . . . . . . . . . 20
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.10. Mandatory Redemptions of Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.11. Voluntary Redemptions of Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.13. Option to Purchase Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.14. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . . . . . . . . . . . . 27

SECTION 3.01. Basic Rent Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination; Optional Redemption . . . . . . . . . . . 28
SECTION 3.03. Payments After Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.06. Payments to Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

799

ARTICLE IV

COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF LOAN TRUSTEE . . . . . . . . . . . . . . . . . . . 33

SECTION 4.01. Covenants of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.03. Certain Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.05. Return of Aircraft, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.10. Loan Trustee Authorized to Execute Bills of Sale, Etc. . . . . . . . . . . . . . . . . . . . 45
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE V

DUTIES OF THE LOAN TRUSTEE . . . . . . . . . . . . . . . . . . . . . 45

SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations . . . . . . . . . . . . . . . . . . 46
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.04. No Duties Except as Specified in Trust Indenture or Instructions . . . . . . . . . . . . . . 50
SECTION 5.05. No Action Except Under Lease, Trust Indenture or Instructions . . . . . . . . . . . . . . . . 50
SECTION 5.06. Replacement Airframes and Replacement Engines . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.07. Indenture Supplements for Replacements . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.09. Investment of Amounts Held by Loan Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 51

ARTICLE VI

THE OWNER TRUSTEE AND THE LOAN TRUSTEE . . . . . . . . . . . . . . . . . . 52

SECTION 6.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.03. No Representations or Warranties as to Aircraft or Documents . . . . . . . . . . . . . . . . 53
SECTION 6.04. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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SECTION 6.05. Reliance; Agreements; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.06. Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.08. Instructions from Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE VII

INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE . . . . . . . . . . . . . . . . 56

SECTION 7.01. Scope of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE VIII

SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . . 57

SECTION 8.01. Notice of Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.02. Resignation of Loan Trustee; Appointment of Successor . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.03. Appointment of Additional and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . 58

ARTICLE IX

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . 60

SECTION 9.01. Instructions of Majority; Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.02. Trustees Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.03. Documents Mailed to Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.04. No Request Necessary for Lease Supplement or Trust Indenture Supplement . . . . . . . . . . . 63
ARTICLE X

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 63

SECTION 10.01. Termination of Trust Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.02. No Legal Title to Trust Indenture
Estate in Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.03. Sale of Aircraft by Loan Trustee Is
Binding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.04. Trust Indenture for Benefit of Owner
Trustee, Loan Trustee, Owner Participant,
Note Holders and the other Indenture
Indemnitees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.05. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.07. No Oral Modification or Continuing

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Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.9. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.10. Normal Commercial Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.11. Governing Law; Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.12. Voting By Note Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.13. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

EXHIBIT A Form of Trust Indenture and Mortgage Supplement
SCHEDULE I Equipment Notes Amortization and Interest Rates

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TRUST INDENTURE AND MORTGAGE

TRUST INDENTURE AND MORTGAGE, dated as of ___________, 199_
("Trust Indenture") between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely
as Loan Trustee hereunder (together with its successors hereunder, the "Loan
Trustee").

W I T N E S S E T H

WHEREAS, all capitalized terms used herein shall have the
respective meanings set forth or referred to in Article I hereof;

WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust for the use and
benefit of the Owner Participant subject, however, to the Trust Indenture
Estate created pursuant hereto for the use and benefit of, and with the
priority of payment to, the holders of Equipment Notes issued hereunder, and
(ii) the Owner Trustee has been authorized and directed to execute and deliver
this Agreement;

WHEREAS, the parties hereto desire by this Trust Indenture,
among other things, (i) to provide for the issuance by the Owner Trustee of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Loan Trustee, as part of the Trust Indenture Estate
hereunder, among other things, of all of the Owner Trustee's right, title and
interest in and to the Aircraft and, except as hereinafter expressly provided,
all of the Owner Trustee's right, title and interest in, to and under the Lease
and the Participation Agreement and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof or thereof, as
security for, among other things, the Owner Trustee's obligations to the
Noteholders and the Indenture Indemnitees;

WHEREAS, all things have been done to make the Equipment
Notes, when executed by the Owner Trustee and
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authenticated and delivered by the Loan Trustee hereunder, the valid, binding
and enforceable obligations of the Owner Trustee; and

WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened;

GRANTING CLAUSE

NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH,
that, to secure the prompt payment of the Original Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to, all
Equipment Notes from time to time outstanding hereunder according to their
tenor and effect and to secure the performance and observance by the Owner
Trustee of all the agreements, covenants and provisions contained herein and in
the Participation Agreement and the Equipment Notes, for the benefit of the
Note Holders, the Loan Participants and each of the Indenture Indemnitees and
the prompt payment of all amounts from time to time owing hereunder, under the
Participation Agreement and the Lease to the Loan Participants, the Note
Holders or any Indenture Indemnitee by the Owner Trustee or the Lessee and for
the uses and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of the
acceptance of the Equipment Notes by the holders thereof, and for other good
and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Loan Trustee, its successors in trust and assigns, for the security and benefit
of the Loan Participants, the Note Holders and each of the Indenture
Indemnitees, a first priority security interest in and mortgage lien on all
right, title and interest of the Owner Trustee in, to and under the following
described property, rights and privileges, whether now or hereafter acquired,
other than Excluded Payments (which collectively, excluding Excluded Payments
but including all property hereafter specifically subjected to the Lien of this
Trust Indenture by the terms hereof
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or any supplement hereto, are included within, and are referred to as, the
"Trust Indenture Estate"), to wit:

(1) The Airframe which is one Boeing ________ aircraft with
the FAA Registration number of ______ and the manufacturer's serial number of
______ and Engines, each of which Engines is a ________________ engine with the
manufacturer's serial numbers of ______ and _____, is of 750 or more rated
takeoff horsepower or the equivalent of such horsepower (such Airframe and
Engines more particularly described in the Indenture Supplement executed and
delivered as provided herein) as the same is now and will hereafter be
constituted, whether now owned by the Owner Trustee or hereafter acquired,
leased or intended to be leased under the Lease, and in the case of such
Engines, whether or not any such Engine shall be installed in or attached to
the Airframe or any other airframe, together with (a) all Parts of whatever
nature, which are from time to time included within the definitions of
"Airframe" or "Engines", whether now owned or hereafter acquired, including all
substitutions, renewals and replacements of and additions, improvements,
accessions and accumulations to the Airframe and Engines (other than additions,
improvements, accessions and accumulations which constitute appliances, parts,
instruments, appurtenances, accessories, furnishings or other equipment
excluded from the definition of Parts) and (b) all Aircraft Documents;

(2) All right, title, interest, claims and demands of the
Owner Trustee, as Lessor, in, to and under the Lease, together with all rights,
powers, privileges, options and other benefits of the Owner Trustee as Lessor
under the Lease, including the immediate and continuing right to receive and
collect all Rent, income, revenues, issues, profits, insurance proceeds,
condemnation awards and other payments, tenders and security now or hereafter
payable to or receivable by the Lessor under the Lease pursuant thereto, and,
subject to Section 5.02 hereof, the right to make all waivers and agreements,
to give and receive copies of all notices and other instruments or
communications, to accept surrender or redelivery of the Aircraft or any part
thereof, as well as all the rights, powers and remedies on the part of the
Owner Trustee as Lessor under the Lease, to take such action upon the
occurrence of a Lease Event of Default thereunder, including the commencement,
conduct and consummation of legal, administrative or other proceedings, as
shall be permitted by the Lease or by Law, and to do any and all
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other things whatsoever which the Owner Trustee or any lessor is or may be
entitled to do under or in respect of the Lease and any right to restitution
from the Lessee or any other Person in respect of any determination of
invalidity of the Lease;

(3) Each Permitted Sublease assignment and each assigned
Permitted Sublease (to the extent assigned under such Permitted Sublease
assignment), and including, without limitation, all rents or other payments of
any kind made under such assigned Permitted Sublease (to the extent assigned
under such Permitted Sublease assignment);

(4) All right, title, interest, claims and demands of the
Owner Trustee in, to and under:

(a) the Purchase Agreement and the GTA;

(b) the Purchase Agreement Assignment with the
Consent and Agreement and the Engine Consent and Agreement attached
thereto;

(d) any and all other contracts, agreements and
instruments relating to the Airframe and Engines or any rights or
interests therein to which the Owner Trustee is now or may hereafter
be a party;

together with all rights, powers, privileges, licenses, easements, options and
other benefits of the Owner Trustee under each contract, agreement and
instrument referred to in this clause (4), including the right to receive and
collect all payments to the Owner Trustee thereunder now or hereafter payable
to or receivable by the Owner Trustee pursuant thereto and, subject to Section
5.02 hereof, the right to make all waivers and agreements, to give and receive
notices and other instruments or communications, or to take any other action
under or in respect of any thereof or to take such action upon the occurrence
of a default thereunder, including the commencement, conduct and consummation
of legal, administrative or other proceedings, as shall be permitted thereby or
by Law, and to do any and all other things which the Owner Trustee is or may be
entitled to do thereunder and any right to restitution from the Lessee, the
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Owner Participant or any other Person in respect of any determination of
invalidity of any thereof;

(5) All rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this Trust
Indenture, including all payments or proceeds payable to the Owner Trustee
after termination of the Lease with respect to the Aircraft as the result of
the sale, lease or other disposition thereof, and all estate, right, title and
interest of every nature whatsoever of the Owner Trustee in and to the same;

(6) Without limiting the generality of the foregoing, all
insurance and requisition proceeds with respect to the Aircraft or any part
thereof, including the insurance required under Section 11 of the Lease;

(7) Without limiting the generality of the foregoing, all
rights of the Owner Trustee to amounts paid or payable by Lessee to the Owner
Trustee under the Participation Agreement and all rights of the Owner Trustee
to enforce payments of any such amounts thereunder;

(8) Without limiting the generality of the foregoing, all
monies and securities from time to time deposited or required to be deposited
with the Loan Trustee pursuant to any terms of this Trust Indenture or the
Lease or required hereby or by the Lease to be held by the Loan Trustee
hereunder as security for the obligations of the Lessee under the Lease or of
the Owner Trustee hereunder; and

(9) All proceeds of the foregoing.

Excluding, however, in all events from each of foregoing
clauses (1) through (9) inclusive all Excluded Payments and the right to
specifically enforce the same or to ▇▇▇ for damages for the breach thereof as
provided in Section 5.02 hereof.

Concurrently with the delivery of this Trust Indenture, the
Owner Trustee will deliver to the Loan Trustee the original executed
counterpart of the Lease and the Lease Supplement No. 1 (to each of which a
chattel paper receipt is attached), and executed copies of the Participation
Agreement, the Purchase
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Agreement and the GTA (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment with the Consent and Agreement
and the Engine Consent and Agreement attached thereto.

TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Loan Trustee, and its successors and assigns, in trust for the equal
and proportionate benefit and security of the Loan Participants, the Note
Holders and the Indenture Indemnitees, except as provided in Section 2.14 and
Article III hereof without any preference, distinction or priority of any one
Equipment Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and in all cases and as to all property specified
in paragraphs (1) through (8) inclusive above, subject to the terms and
provisions set forth in this Trust Indenture.

It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Agreements, to perform all of the obligations assumed by it
thereunder, except to the extent prohibited or excluded from doing so pursuant
to the terms and provisions thereof, and the Loan Trustee, the Loan
Participants, the Indenture Indemnitees and the Note Holders shall have no
obligation or liability under the Indenture Agreements, by reason of or arising
out of the assignment hereunder, nor shall the Loan Trustee, the Loan
Participants, the Indenture Indemnitees or the Note Holders be required or
obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Agreements, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.

The Owner Trustee does hereby constitute the Loan Trustee the
true and lawful attorney of the Owner Trustee, irrevocably, granted for good
and valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner Trustee or
otherwise) to ask for, require, demand, receive, compound and give acquittance
for any and all monies and claims for monies (in each
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case including insurance and requisition proceeds but in all cases excluding
Excluded Payments) due and to become due under or arising out of the Indenture
Agreements, and all other property which now or hereafter constitutes part of
the Trust Indenture Estate, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or to take any action or
to institute any proceedings which the Loan Trustee may deem to be necessary or
advisable in the premises. Without limiting the generality of the foregoing,
but subject to the rights of the Owner Trustee and the Owner Participant under
Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance of any Event of
Default under this Trust Indenture, the Loan Trustee shall have the right under
such power of attorney to accept any offer in connection with the exercise of
remedies as set forth herein of any purchaser to purchase the Airframe and
Engines and upon such purchase to execute and deliver in the name of and on
behalf of the Owner Trustee an appropriate ▇▇▇▇ of sale and other instruments
of transfer relating to the Airframe and Engines, when purchased by such
purchaser, and to perform all other necessary or appropriate acts with respect
to any such purchase, and in its discretion to file any claim or take any other
action or proceedings, either in its own name or in the name of the Owner
Trustee or otherwise, which the Loan Trustee may deem necessary or appropriate
to protect and preserve the right, title and interest of the Loan Trustee in
and to such Rents and other sums and the security intended to be afforded
hereby; provided, however, that no action of the Loan Trustee pursuant to this
paragraph shall increase the obligations or liabilities of the Owner Trustee to
any Person beyond those obligations and liabilities specifically set forth in
this Trust Indenture and in the other Operative Agreements. Under the Lease,
Lessee is directed, so long as this Trust Indenture shall not have been fully
discharged, to make all payments of Rent (other than Excluded Payments) and all
other amounts which are required to be paid to or deposited with the Owner
Trustee pursuant to the Lease (other than Excluded Payments) directly to, or as
directed by, the Loan Trustee at such address or addresses as the Loan Trustee
shall specify, for application as provided in this Trust Indenture. The Owner
Trustee agrees that promptly upon receipt thereof, it will transfer to the Loan
Trustee any and all monies from time to time received by it constituting part
of the Trust Indenture Estate, for distribution by the Loan Trustee pursuant to
this Trust Indenture, except that the Owner Trustee shall accept for
distribution pursuant to the Trust Agreement any
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amounts distributed to it by the Loan Trustee under this Trust Indenture.

The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Loan Trustee, 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 Loan
Trustee may reasonably deem necessary or desirable to perfect, preserve or
protect the mortgage, security interests and assignments created or intended to
be created hereby or to obtain for the Loan Trustee the full benefits of the
assignment hereunder and of the rights and powers herein granted.

The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in effect,
and the Lien hereof shall not have been released pursuant to Section 10.01
hereof, any of its right, title or interest hereby assigned, to anyone other
than the Loan Trustee, and that it will not, except as otherwise provided in
this Trust Indenture and except with respect to Excluded Payments to which it
is entitled, (i) accept any payment from Lessee or any Permitted Sublessee
under any Indenture Agreement, (ii) enter into any agreement amending or
supplementing any Indenture Agreement, (iii) execute any waiver or modification
of, or consent under, the terms of, or exercise any rights, powers or
privileges under, any Indenture Agreement, (iv) settle or compromise any claim
arising under any Indenture Agreement or (v) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.

The Owner Trustee does hereby further agree that it will not
without the written consent of the Loan Trustee:

(a) except with respect to Excluded Payments, receive or
collect or agree to the receipt or collection of any payment of Rent,
including Basic Rent, Stipulated Loss Value, Termination Value or any
other payment to be made pursuant to Section 9 or 10 of the Lease
prior to the date for the payment thereof provided for by the Lease or
assign, transfer or hypothecate (other than to the Loan Trustee
hereunder) any payment of Rent, including Basic Rent,
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Stipulated Loss Value, Termination Value or any other payment to be
made pursuant to Section 9 or 10 of the Lease, then due or to accrue
in the future under the Lease in respect of the Airframe and Engines;
or

(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner trustee, sell,
mortgage, transfer, assign or hypothecate (other than to the Loan
Trustee hereunder) its interest in the Airframe and Engines or any
part thereof or in any amount to be received by it from the use or
disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III hereof.

It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is hereafter
acquired by the Owner Trustee shall ipso facto, and without any further
conveyance, assignment or act on the part of the Owner Trustee or the Loan
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained in
this paragraph shall be deemed to modify or change the obligations of the Owner
Trustee contained in the foregoing paragraphs.

The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Owner Trustee Agreement.

IT IS HEREBY COVENANTED AND AGREED by and between the
parties hereto as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A to the Lease.
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ARTICLE II

THE EQUIPMENT NOTES

SECTION 2.01. Form of Equipment Notes

The Equipment Notes shall be substantially in the form
set forth below:

THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO
THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT
NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND
SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH
REGISTRATIONS IS AVAILABLE.

FIRST SECURITY BANK, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT
DATED AS OF _______, 199_.

SERIES [_____] LIMITED RECOURSE EQUIPMENT NOTE DUE
[______________] ISSUED IN CONNECTION WITH THE
BOEING MODEL ________ AIRCRAFT BEARING
UNITED STATES REGISTRATION NUMBER _______.

No. _____ Date: [________, ____]
$____________________

INTEREST RATE MATURITY DATE

[_______] [__________, ____]

FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity called
the "Owner Trustee") under that certain Trust Agreement, dated as of _________,
199_, between the Owner Participant named therein and First Security Bank,
National Association (herein as such Trust Agreement may be supplemented or
amended from time to time called the "Trust Agreement"), hereby promises to pay
to _______________, or the registered assignee thereof, the principal sum of
$__________ (the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time (calculated on the basis
of a year of 360 days comprised of twelve 30-day months)
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from the date hereof until paid in full at a rate per annum equal to the Debt
Rate. The Original Amount of this Equipment Note shall be payable in
installments on the dates set forth in Schedule I hereto equal to the
corresponding percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be due and
payable in semiannual installments commencing on _________, 199_, and
thereafter on ______________ ____ and ___________ ____ of each year, to and
including _________, ____. Notwithstanding the foregoing, the final payment
made on this Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid interest on, and any
other amounts due under, this Equipment Note. Notwithstanding anything to the
contrary contained herein, if any date on which a payment under this Equipment
Note becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding
Business Day and if such payment is made on such next succeeding Business Day,
no interest shall accrue on the amount of such payment during such extension.

For purposes hereof, the term "Trust Indenture" means the
Trust Indenture and Mortgage, dated as of __________, 199_, between the Owner
Trustee and Wilmington Trust Company (the "Loan Trustee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.

This Equipment Note shall bear interest, payable on demand, at
the Payment Due Rate (calculated on the basis of a year of 360 days comprised
of twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not paid
when due (whether at stated maturity, by acceleration or otherwise).

The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the circumstances, specified by
the Registration Rights Agreement. For the avoidance of doubt, the interest
rate, as so adjusted, shall never exceed 0.50% per annum over the interest rate
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initially borne by this Equipment Note save by reason of the application of the
Payment Due Rate.

All payments of Original Amount, interest, Make-Whole Amount,
if any, and other amounts, if any, to be made by the Owner Trustee hereunder
and under the Trust Indenture or the Participation Agreement shall be payable
only from the income and proceeds from the Trust Estate to the extent included
in the Trust Indenture Estate and only to the extent that the Owner Trustee
shall have sufficient income or proceeds from the Trust Estate to the extent
included in the Trust Indenture Estate to enable the Loan Trustee to make such
payments in accordance with the terms of Section 2.03 and Article III of the
Trust Indenture, and each holder hereof, by its acceptance of this Equipment
Note, agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee and
the Loan Trustee is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Equipment Note or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; provided,
however, that nothing herein contained shall limit, restrict or impair the
right of the Loan Trustee, subject always to the terms and provisions of the
Trust Indenture, to accelerate the maturity of this Equipment Note upon
occurrence of an Event of Default under the Trust Indenture in accordance with
Section 4.04(b) of the Trust Indenture, to bring suit and obtain a judgment
against the Owner Trustee on this Equipment Note for purposes of realizing upon
the Trust Indenture Estate and to exercise all rights and remedies provided
under the Trust Indenture or otherwise realize upon the Trust Indenture Estate.

There shall be maintained an Equipment Note Register for the
purpose of registering transfers and exchanges of Equipment Notes at the
Corporate Trust Office of the Loan Trustee or at the office of any successor in
the manner provided in Section 2.07 of the Trust Indenture.

The Original Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Loan Trustee, or as
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otherwise provided in the Trust Indenture. Each such payment shall be made on
the date such payment is due and without any presentment or surrender of this
Equipment Note, except that in the case of any final payment with respect to
this Equipment Note, the Equipment Note shall be surrendered promptly
thereafter by the Loan Trustee to the Owner Trustee for cancellation.

The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Trust Indenture, each payment of the
Original Amount, Make-Whole Amount, if any, and interest received by it
hereunder shall be applied, first, to the payment of accrued interest on this
Equipment Note (as well as any interest on any overdue Original Amount, any
overdue Make-Whole Amount, if any, or, to the extent permitted by Law, any
overdue interest and other amounts hereunder) to the date of such payment,
second, to the payment of the Original Amount of this Equipment Note then due,
third, to the payment of Make-Whole Amount, if any, and any other amount due
hereunder or under the Trust Indenture, and fourth, the balance, if any,
remaining thereafter, to the payment of the installments of the Original Amount
of this Equipment Note remaining unpaid in the inverse order of maturity.

This Equipment Note is one of the Equipment Notes referred to
in the Trust Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Trust Indenture. The Trust Indenture Estate is
held by the Loan Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Trust Indenture.
Reference is hereby made to the Trust Indenture for a complete statement of the
rights and obligations of the holder of, and the nature and extent of the
security for, this Equipment Note and the rights and obligations of the holders
of, and the nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for a statement of
the terms and conditions of the Trust created by the Trust Indenture, to all of
which terms and conditions in the Trust Indenture each holder hereof agrees by
its acceptance of this Equipment Note.

As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate Original Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
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Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Loan Trustee shall treat the person
in whose name this Equipment Note is registered as the owner hereof for all
purposes, whether or not this Equipment Note be overdue, and neither the Owner
Trustee nor the Loan Trustee shall be affected by notice to the contrary.

This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This
Equipment Note is also subject to exchange and to purchase by the Owner
Participant or the Owner Trustee as provided in Section 2.13 of the Trust
Indenture but not otherwise. In addition, this Equipment Note may be
accelerated as provided in Section 4.04 of the Trust Indenture.

[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of [Series A
Equipment Notes]1 [Series A and Series B Equipment Notes]2, and this Equipment
Note is issued subject to such provisions. The Note Holder of this Equipment
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Loan Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in the Trust Indenture and (c) appoints the Loan Trustee his
attorney-in-fact for such purpose.]*

Unless the certificate of authentication hereon has been
executed by or on behalf of the Loan Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Trust Indenture
or be valid or obligatory for any purpose.

____________________

1 To be inserted in the case of a Series B Equipment Note.

2 To be inserted in the case of a Series C Equipment Note.

* To be inserted for each Equipment Note other than any Series A Equipment
Note.
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THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

* * *

IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its officer thereunto
duly authorized on the date hereof.

FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee

By
------------------------------------
Name:
Title:

LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.

WILMINGTON TRUST COMPANY,
as Loan Trustee

By
------------------------------------
Name:
Title:

SCHEDULE I
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EQUIPMENT NOTE AMORTIZATION

Percentage of
Original Amount
Payment Date to be Paid
------------ ---------------

[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]

* * *

SECTION 2.02. Issuance and Terms of Equipment Notes

The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in three separate series consisting of Series A,
Series B and Series C and in the maturities and principal amounts and shall
bear interest as specified in Schedule I hereto. On the date of the
consummation of the Transaction, each Equipment Note shall be issued to the
Subordination Agent on behalf of the Pass Through Trustees under the Pass
Through Trust Agreements. The Equipment Notes shall be issued in registered
form only. The Equipment Notes shall be issued in denominations of $1,000 and
integral multiples thereof, except that one Equipment Note of each Series may
be in an amount that is not an integral multiple of $1,000.

comprised of twelve 30-day months) on any part of the Original Amount,
Make-Whole Amount, if any, and to the extent permitted by applicable Law,
interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything to
the contrary contained herein, if any date on which a payment under any
Equipment Note becomes due and payable is not a Business Day then such payment
shall not be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment during
such extension.

The Owner Trustee agrees to pay to the Loan Trustee for
distribution in accordance with Section 3.04 hereof: (i) to the extent not
payable (whether or not in fact paid) under Section 6(a) of the Note Purchase
Agreement (as originally in effect or amended with the consent of the Owner
Participant), an amount equal to the fees payable to the relevant Liquidity
Provider under Section 2.03 of each Liquidity Facility and the related Fee
Letter (as defined in the Intercreditor Agreement) multiplied by a fraction the
numerator of which shall be the then outstanding aggregate principal amount of
the Series A Equipment Notes, Series B Equipment Notes and Series C Equipment
Notes and the denominator of which shall be the then outstanding aggregate
principal amount of all "Series A Equipment Notes", "Series B Equipment Notes"
and "Series C Equipment Notes" (each as defined in the Note Purchase
Agreement); (ii) (x) the amount equal to interest on any Downgrade Advance
(other than any Applied Downgrade Advance) payable under Section 3.07(e) of
each Liquidity Facility minus Investment Earnings from such Downgrade Advance
multiplied by (y) the fraction specified in the foregoing clause (i); (iii) (x)
the amount equal to interest on any Non-Extension Advance (other than any
Applied Non-Extension Advance) payable under Section 3.07(a)(i) of each
Liquidity Facility minus Investment Earnings from such Non-Extension Advance
multiplied by (y) the fraction specified in the foregoing clause (i); and (iv)
if any payment default shall have occurred and be continuing with respect to
interest on any Series A Equipment Note, Series B Equipment Note or Series C
Equipment Note, (x) the excess, if any, of (1) the amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
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payable under Section 3.07(a)(i) of each Liquidity Facility over (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at the
Payment Due Rate actually payable (whether or not in fact paid) by the Owner
Trustee on the overdue scheduled interest on the Equipment Notes in respect of
which such Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance was made multiplied by (y) a fraction the numerator of which shall be
the then aggregate overdue amounts of interest on the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes (other than interest
becoming due and payable solely as a result of acceleration of any such
Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (each as defined in the Note
Purchase Agreement) (other than interest becoming due and payable solely as a
result of acceleration of any such "Equipment Notes"). For purposes of this
paragraph, the terms "Applied Downgrade Advance", "Applied Non-Extension
Advance", "Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall have
the meanings specified in each Liquidity Facility or the Intercreditor
Agreement referred to therein.

The Equipment Notes shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer. Equipment
Notes bearing the signatures of individuals who were at any time the proper
officers of the Owner Trustee shall bind the Owner Trustee, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Equipment Notes or did not hold such
offices at the respective dates of such Equipment Notes. The Owner Trustee may
from time to time execute and deliver Equipment Notes with respect to the
Aircraft to the Loan Trustee for authentication upon original issue and such
Equipment Notes shall thereupon be authenticated and delivered by the Loan
Trustee upon the written request of the Owner Trustee signed by a Vice
President or Assistant Vice President or other authorized officer of the Owner
Trustee; provided, however, that each such request shall specify the aggregate
Original Amount of all Equipment Notes to be authenticated hereunder on
original issue with respect to the Aircraft. No Equipment Note shall be
secured by or entitled to any benefit under this Trust Indenture or be
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19

valid or obligatory for any purposes, unless there appears on such Equipment
Note a certificate of authentication in the form provided for herein executed
by the Loan Trustee by the manual signature of one of its authorized officers
and such certificate upon any Equipment Notes shall be conclusive evidence, and
the only evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.

The aggregate Original Amount of the Equipment Notes to be
issued and outstanding hereunder shall not exceed __% of Lessor's Cost.
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SECTION 2.03. Payments from Trust Indenture Estate Only

(a) Without impairing any of the other rights, powers,
remedies, privileges, liens or security interests of the Note Holders under
this Trust Indenture, each Note Holder, by its acceptance of an Equipment Note,
agrees that as between it and the Owner Trustee, except as expressly provided
in this Trust Indenture, the Participation Agreement or any other Operative
Agreement, (i) the obligation to make all payments of the Original Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with respect
to the Equipment Notes, and the performance by the Owner Trustee of every
obligation or covenant contained in this Trust Indenture and in the
Participation Agreement or any of the other Operative Agreements, shall be
payable only from the income and proceeds from the Trust Estate to the extent
included in the Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate to enable the Loan Trustee to
make such payments in accordance with the terms of Article III hereof, and all
of the statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Trust Indenture and any
agreement referred to herein other than the Trust Agreement, unless expressly
otherwise stated, are made and intended only for the purpose of binding the
Trust Estate and establishing the existence of rights and remedies which can be
exercised and enforced against the Trust Estate; therefore, anything contained
in this Trust Indenture or such other agreements to the contrary
notwithstanding (except for any express provisions or representations that the
Owner Trustee is responsible for, or is making, in its individual capacity, for
which there would be personal liability of the Owner Trustee), no recourse
shall be had with respect to this Trust Indenture or such other agreements
against the Owner Trustee in its individual capacity or against any institution
or person which becomes a successor trustee or co-trustee or any officer,
director, trustee, servant or direct or indirect parent or controlling Person
or Persons of any of them, and (ii) none of the Owner Trustee, in its
individual capacity, the Owner Participant, the Loan Trustee and any officer,
director, trustee, servant, employee, agent or direct or indirect parent or
controlling Person or Persons of any of them shall have any personal liability
for any amounts payable hereunder, under the Participation Agreement or any of
the other Operative Agreements or under the Equipment Notes except as expressly
provided herein or in the Participation Agreement; provided, however, that
822
22

nothing contained in this Section 2.03(a) shall be construed to limit the
exercise and enforcement in accordance with the terms of this Trust Indenture
or such other agreements of rights and remedies against the Trust Indenture
Estate.

(b) If (i) all or any part of the Trust Estate becomes the
property of, or the Owner Trustee or Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Code, (ii) pursuant
to such reorganization provisions, including Section 1111(b) of the Bankruptcy
Code, the Owner Trustee (in its individual capacity) or the Owner Participant
is required, by reason of the Owner Trustee (in its individual capacity) or the
Owner Participant being held to have recourse liability to any Note Holder or
the Loan Trustee, directly or indirectly (other than the recourse liability of
the Owner Trustee (in its individual capacity) or the Owner Participant under
the Participation Agreement or this Trust Indenture or by separate agreement),
to make payment on account of any amount payable as principal, Make-Whole
Amount, if any, interest or other amounts on the Equipment Notes and (iii) any
Note Holder or the Loan Trustee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of clause (ii) above,
then such Note Holder or the Loan Trustee, as the case may be, shall promptly
refund to the Owner Trustee (in its individual capacity) or the Owner
Participant (whichever shall have made such payment) such Excess Amount.

For purposes of this Section 2.03(b), "Excess Amount" means
the amount by which such payment exceeds the amount that would have been
received by a Note Holder or the Loan Trustee if the Owner Trustee (in its
individual capacity) or the Owner Participant had not become subject to the
recourse liability referred to in clause (ii) above. Nothing contained in this
Section 2.03(b) shall prevent a Note Holder or the Loan Trustee from enforcing
any personal recourse obligation (and retaining the proceeds thereof) of the
Owner Trustee (in its individual capacity) or the Owner Participant under the
Participation Agreement or this Trust Indenture (and any exhibits or annexes
hereto or thereto) or by separate agreement or from retaining any amount paid
by Owner Participant under Section 2.13 or 4.03 hereof.
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SECTION 2.04. Method of Payment

(a) The Original Amount of, interest on, Make-Whole Amount,
if any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not later
than 12:00 noon, New York City time, on the due date of payment to the Loan
Trustee at the Corporate Trust Office for distribution among the Note Holders
in the manner provided herein. The Owner Trustee shall not have any
responsibility for the distribution of such payment to any Note Holder.
Notwithstanding the foregoing or any provision in any Equipment Note to the
contrary, the Loan Trustee will use reasonable efforts to pay or cause to be
paid, if so directed in writing by any Note Holder (with a copy to the Owner
Trustee), all amounts paid by the Owner Trustee hereunder and under such
holder's Equipment Note or Equipment Notes to such holder or a nominee therefor
(including all amounts distributed pursuant to Article III of this Trust
Indenture) by transferring, or causing to be transferred, by wire transfer of
immediately available funds in Dollars, prior to 2:00 p.m., New York City time,
on the due date of payment, to an account maintained by such holder with a bank
located in the continental United States the amount to be distributed to such
holder, for credit to the account of such holder maintained at such bank. If
the Loan Trustee 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 Loan Trustee, in its individual capacity
and not as trustee, agrees to compensate such holders for loss of use of funds
at the Debt Rate until such payment is made and the Loan Trustee shall be
entitled to any interest earned on such funds until such payment is made. Any
payment made hereunder shall be made without any presentment or surrender of
any Equipment Note, except that, in the case of the final payment in respect of
any Equipment Note, such Equipment Note shall be surrendered to the Loan
Trustee for cancellation promptly after such payment. Notwithstanding any
other provision of this Trust Indenture to the contrary, the Loan Trustee shall
not be required to make, or cause to be made, wire transfers as aforesaid prior
to the first Business Day on which it is practicable for the Loan Trustee to do
so in view of the time of day when the funds to be so transferred were received
by it if such funds were received after 12:00 noon, New York City time, at the
place of payment. Prior to the due presentment for registration of transfer of
any Equipment Note, the Owner Trustee and the Loan Trustee shall deem and treat
the Person in whose name any Equipment Note is registered on the Equipment Note
824
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Register as the absolute owner and holder of such Equipment Note for the
purpose of receiving payment of all amounts payable with respect to such
Equipment Note and for all other purposes, and none of the Owner Trustee or the
Loan Trustee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of such
Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Loan Trustee
consistent with this Section 2.04.

(b) The Loan Trustee, as agent for the Owner Trustee, shall
exclude and withhold at the appropriate rate from each payment of Original
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Equipment Note (and such exclusion and withholding
shall constitute payment in respect of such Equipment Note) any and all United
States withholding taxes applicable thereto as required by Law. The Loan
Trustee agrees to act as such withholding agent and, in connection therewith,
whenever any present or future United States taxes or similar charges are
required to be withheld with respect to any amounts payable hereunder or in
respect of the Equipment Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the Note
Holders, that it will file any necessary United States withholding tax returns
or statements when due, and that as promptly as possible after the payment
thereof it will deliver to each Note Holder (with a copy to the Owner Trustee
and the Lessee) appropriate receipts showing the payment thereof, together with
such additional documentary evidence as any such Note Holder may reasonably
request from time to time.

If a Note Holder which is a Non-U.S. Person has furnished to
the Loan Trustee a properly completed, accurate and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms as
may be required by the United States Treasury Department) during the calendar
year in which the payment hereunder or under the Equipment Note(s) held by such
holder is made (but prior to the making of such payment), or in either of the
two preceding calendar years, and has not notified the Loan Trustee of the
withdrawal or inaccuracy of such form prior to the date of such payment (and
the Loan Trustee has
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no reason to believe that any information set forth in such form is
inaccurate), the Loan Trustee shall withhold only the amount, if any, required
by Law (after taking into account any applicable exemptions properly claimed by
the Note Holder) to be withheld from payments hereunder or under the Equipment
Notes held by such holder in respect of United States federal income tax. If a
Note Holder (x) which is a Non-U.S. Person has furnished to the Loan Trustee a
properly completed, accurate and currently effective U.S. Internal Revenue
Service Form 4224 in duplicate (or such successor certificate, form or forms as
may be required by the United States Treasury Department as necessary in order
to properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made (but prior to the making of any
payment for such year), and has not notified the Loan Trustee of the withdrawal
or inaccuracy of such certificate or form prior to the date of such payment
(and the Loan Trustee has no reason to believe that any information set forth
in such form is inaccurate) or (y) which is a U.S. Person has furnished to the
Loan Trustee a properly completed, accurate and currently effective U.S.
Internal Revenue Service Form W-9, if applicable, prior to a payment hereunder
or under the Equipment Notes held by such holder, no amount shall be withheld
from payments in respect of United States federal income tax. If any Note
Holder has notified the Loan Trustee that any of the foregoing forms or
certificates is withdrawn or inaccurate, or if such holder has not filed a form
claiming an exemption from United States withholding tax or if the Code or the
regulations thereunder or the administrative interpretation thereof is at any
time after the date hereof amended to require such withholding of United States
federal income taxes from payments under the Equipment Notes held by such
holder, the Loan Trustee agrees to withhold from each payment due to the
relevant Note Holder withholding taxes at the appropriate rate under Law and
will, on a timely basis as more fully provided above, deposit such amounts with
an authorized depository and make such returns, statements, receipts and other
documentary evidence in connection therewith as required by Law.

SECTION 2.05. Application of Payments

In the case of each Equipment Note, each payment of Original
Amount, Make-Whole Amount, if any, and interest due thereon shall be applied:
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First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Original Amount, any
overdue Make-Whole Amount, if any, and to the extent permitted by Law,
any overdue interest and any other overdue amounts thereunder) to the
date of such payment;

Second: to the payment of the Original Amount of such
Equipment Note (or a portion thereof) then due thereunder;

Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and

The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Original Amount of such Equipment Note in the inverse order of
their normal maturity.

SECTION 2.06. Termination of Interest in Trust
Indenture Estate

No Note Holder nor any other Indenture Indemnitee shall, as
such, have any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the Original Amount of, Make-Whole Amount, if any,
and interest on and other amounts due under all Equipment Notes held by such
Note Holder and all other sums then due and payable to such Note Holder, such
Indenture Indemnitee or the Loan Trustee hereunder (including, without
limitation, under the third paragraph of Section 2.02 hereof) and under the
other Operative Agreements by the Owner Trustee (collectively, the "Secured
Obligations") shall have been paid in full.
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SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes

The Loan Trustee shall keep a register (the "Equipment Note
Register") in which the Loan Trustee shall provide for the registration of
Equipment Notes and the registration of transfers of Equipment Notes. No such
transfer shall be given effect unless and until registration hereunder shall
have occurred. The Equipment Note Register shall be kept at the Corporate
Trust Office of the Loan Trustee. The Loan Trustee is hereby appointed
"Equipment Note Registrar" for the purpose of registering Equipment Notes and
transfers of Equipment Notes as herein provided. A holder of any Equipment
Note intending to exchange such Equipment Note shall surrender such Equipment
Note to the Loan Trustee at the Corporate Trust Office, together with a written
request from the registered holder thereof for the issuance of a new Equipment
Note, specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer of
any Equipment Note, the Owner Trustee shall execute, and the Loan Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Equipment Notes of a like aggregate Original
Amount and of the same series.

At the option of the Note Holder, Equipment Notes may be
exchanged for other Equipment Notes of any authorized denominations of a like
aggregate Original Amount, upon surrender of the Equipment Notes to be
exchanged to the Loan Trustee at the Corporate Trust Office. Whenever any
Equipment Notes are so surrendered for exchange, the Owner Trustee shall
execute, and the Loan Trustee shall authenticate and deliver, the Equipment
Notes which the Note Holder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof
or otherwise under this Trust Indenture) shall be the valid obligations of the
Owner Trustee evidencing the same respective obligations, and entitled to the
same security and benefits under this Trust Indenture, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every Equipment
Note presented or surrendered for registration of transfer, shall (if so
required by the Loan Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Loan Trustee duly executed
by the Note Holder or such holder's attorney duly authorized in writing, and
the Loan Trustee shall
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require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act, and the securities Laws of any applicable state. The
Loan Trustee shall make a notation on each new Equipment Note of the amount of
all payments of Original Amount previously made on the old Equipment Note or
Equipment Notes with respect to which such new Equipment Note is issued and the
date to which interest on such old Equipment Note or Equipment Notes has been
paid. Interest shall be deemed to have been paid on such new Equipment Note to
the date on which interest shall have been paid on such old Equipment Note, and
all payments of the Original Amount marked on such new Equipment Note, as
provided above, shall be deemed to have been made thereon. The Owner Trustee
shall not be required to exchange any surrendered Equipment Notes as provided
above during the ten-day period preceding the due date of any payment on such
Equipment Note. The Owner Trustee shall in all cases deem the Person in whose
name any Equipment Note shall have been issued and registered as the absolute
owner and holder of such Equipment Note for the purpose of receiving payment of
all amounts payable by the Owner Trustee with respect to such Equipment Note
and for all purposes until a notice stating otherwise is received from the Loan
Trustee and such change is reflected on the Equipment Note Register. The Loan
Trustee will promptly notify the Owner Trustee and the Lessee of each
registration of a transfer of an Equipment Note. Any such transferee of an
Equipment Note, by its acceptance of an Equipment Note, agrees to the
provisions of the Participation Agreement applicable to Note Holders, and shall
be deemed to have covenanted to the parties to the Participation Agreement as
to the matters covenanted by the original Loan Participant in the Participation
Agreement. Subject to compliance by the Note Holder and its transferee (if
any) of the requirements set forth in this Section 2.07, Loan Trustee and Owner
Trustee shall use all reasonable efforts to issue new Equipment Notes upon
transfer or exchange within 10 Business Days of the date an Equipment Note is
surrendered for transfer or exchange.
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SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes

If any Equipment Note shall become mutilated, destroyed, lost
or stolen, the Owner Trustee shall, upon the written request of the holder of
such Equipment Note, execute and the Loan Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Original Amount dated the same date and captioned as issued in connection with
the Aircraft. If the Equipment Note being replaced has become mutilated, such
Equipment Note shall be surrendered to the Loan Trustee and a photocopy thereof
shall be furnished to the Owner Trustee. If the Equipment Note being replaced
has been destroyed, lost or stolen, the holder of such Equipment Note shall
furnish to the Owner Trustee and the Loan Trustee such security or indemnity as
may be required by them to save the Owner Trustee and the Loan Trustee harmless
and evidence satisfactory to the Owner Trustee and the Loan Trustee of the
destruction, loss or theft of such Equipment Note and of the ownership thereof.
If a "qualified institutional buyer" of the type referred to in paragraph
(a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a "QIB")
is the holder of any such destroyed, lost or stolen Equipment Note, then the
written indemnity of such QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Lessee, Owner
Trustee and Loan Trustee shall be accepted as satisfactory indemnity and
security and no further indemnity or security shall be required as a condition
to the execution and delivery of such new Equipment Note. Subject to
compliance by the Note Holder with the requirements set forth in this Section
2.08, Loan Trustee and Owner Trustee shall use all reasonable efforts to issue
new Equipment Notes within 10 Business Days of the date of the written request
therefor from the Note Holder.

SECTION 2.09. Payment of Expenses on Transfer;
Cancellation

(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Loan Trustee,
as Equipment Note Registrar, may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
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(b) The Loan Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.

SECTION 2.10. Mandatory Redemptions of Equipment Notes

(a) On the date on which Lessee is required pursuant to
Section 10.1.2 of the Lease to make payment for an Event of Loss with respect
to the Aircraft, all of the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Original Amount thereof, together
with all accrued interest thereon to the date of redemption and all other
Secured Obligations owed or then due and payable to the Note Holders but
without Make-Whole Amount.

(b) If the Lease is terminated with respect to the Aircraft
by Lessee pursuant to Section 9 thereof, on the date the Lease is so
terminated, all the Equipment Notes shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with
accrued interest thereon to the date of redemption and all other amounts then
due and payable hereunder and under the Participation Agreement and all other
Operative Agreements to the Note Holders plus, if such redemption is made prior
to the Premium Termination Date, Make-Whole Amount, if any.

SECTION 2.11. Voluntary Redemptions of Equipment Notes

All (but not less than all) of the Equipment Notes may be
redeemed by the Owner Trustee in connection with a transaction described in,
and subject to the terms and conditions of, Section 11 of the Participation
Agreement upon at least 30 days' revocable prior written notice to the Loan
Trustee and the Note Holders, and the Equipment Notes shall, as provided in
Section 11 of the Participation Agreement, be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with
accrued interest thereon to the date of redemption and all other Secured
Obligations owed or then due and payable to the Note Holders plus (except as
provided in Section 11 of the Participation Agreement), if such redemption is
made prior to the Premium Termination Date, Make-Whole Amount, if any.
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SECTION 2.12. Redemptions; Notice of Redemption

(a) Neither any redemption of any Equipment Note nor any
purchase by the Owner Trustee of any Equipment Note may be made except to the
extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Equipment Note may be made by the Loan Trustee.

(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Loan Trustee by first-class mail, postage
prepaid, mailed not less than 25 nor more than 60 days prior to the applicable
redemption date, to each Note Holder of such Equipment Notes to be redeemed or
purchased, at such Note Holder's address appearing in the Equipment Note
Register; provided that, in the case of a redemption to be made pursuant to
Section 2.10(b) or Section 2.11, such notice shall be revocable and shall be
deemed revoked in the event that the Lease does not in fact terminate on the
specified termination date or if notice of such redemption shall have been
given in connection with a refinancing of Equipment Notes and the Loan Trustee
receives written notice of such revocation from the Lessee or the Owner Trustee
not later than three days prior to the redemption date. All notices of
redemption shall state: (1) the redemption date, (2) the applicable basis for
determining the redemption price, (3) that on the redemption date, the
redemption price will become due and payable upon each such Equipment Note, and
that, if any such Equipment Notes are then outstanding, interest on such
Equipment Notes shall cease to accrue on and after such redemption date, and
(4) the place or places where such Equipment Notes are to be surrendered for
payment of the redemption price.

(c) On or before the redemption date, the Owner Trustee (or
any person on behalf of the Owner Trustee) shall, to the extent an amount equal
to the redemption price for the Equipment Notes to be redeemed or purchased on
the redemption date shall not then be held in the Trust Indenture Estate,
deposit or cause to be deposited with the Loan Trustee by 12:00 noon on the
redemption date in immediately available funds the redemption price of the
Equipment Notes to be redeemed or purchased.

(d) Notice of redemption or purchase having been given as
aforesaid (and not deemed revoked as contemplated in the
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proviso to Section 2.12(b)), the Equipment Notes to be redeemed or purchased
shall, on the redemption date, become due and payable at the Corporate Trust
Office of the Loan Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price) any
such Equipment Notes then outstanding shall cease to bear interest. Upon
surrender of any such Equipment Note for redemption or purchase in accordance
with said notice, such Equipment Note shall be redeemed at the redemption
price. If any Equipment Note called for redemption or purchase shall not be so
paid upon surrender thereof for redemption, the principal amount thereof shall,
until paid, continue to bear interest from the applicable redemption date at
the interest rate in effect for such Equipment Note as of such redemption date.

SECTION 2.13. Option to Purchase Equipment Notes

The Owner Trustee and the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set forth in
this Section 2.13, purchase all but not less than all of the Equipment Notes
outstanding hereunder, and each Note Holder agrees that it will, upon such
events and subject to such terms and conditions and upon receipt of such price,
sell, assign, transfer and convey to such purchaser or its nominee (without
recourse or warranty of any kind except against Liens on such Equipment Notes
arising by, through or under such holder), all of the right, title and interest
of such Note Holder in and to the Equipment Notes held by it, and such
purchaser or its nominee shall assume all of such holder's obligations under
the Participation Agreement and hereunder.

Such option to purchase the Equipment Notes may be exercised
by the Owner Trustee or the Owner Participant at any time after any of the
following events, and in any such event the purchase price thereof shall equal
for each Equipment Note, the aggregate unpaid Original Amount thereof, plus
accrued and unpaid interest thereon to the date of purchase and all other
Secured Obligations owed, or then due and payable hereunder, to the holder
thereof (including under the third paragraph of Section 2.02 hereof). Such
option to purchase the Equipment Notes may be exercised (x) at any time after a
Mortgagee Event or (y) in the event there shall have occurred and be continuing
a Lease Event of Default, provided that if such option is exercised pursuant to
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this clause (y) at a time when there shall have occurred and be continuing for
less than 120 days a Lease Event of Default, the purchase price thereof shall
equal the price provided in the preceding sentence plus (subject to Section
4.04(b) hereof) the Make-Whole Amount, if any, [provided further that if such
option is exercised pursuant to this clause (y) at any time when there shall
have occurred and be continuing a Lease Event of Default only under Section
14.8 of the Lease (in which event the option to purchase the Equipment Notes
pursuant to this Section 2.13 may not be exercised for 60 days after the date
of notice by the Loan Trustee of such Lease Event of Default to the Note
Holders), the purchase price thereof shall equal the price provided in the
preceding sentence plus (subject to Section 4.04(b) hereof) the Make-Whole
Amount, if any].

Such option to purchase the Equipment Notes may be exercised
by the Owner Trustee or the Owner Participant giving written notice of its
election of such option to the Loan Trustee, which notice shall specify a date
for such purchase within 30 days of the date of such notice. The Loan Trustee
shall not exercise any of the remedies hereunder and, without the consent of
the Owner Trustee or the Owner Participant, under the Lease, during the period
from the time that an exercise by the Owner Trustee or the Owner Participant of
such option to purchase becomes irrevocable until the date on which such
purchase is required to occur pursuant to the terms of the preceding sentence.
Such election to purchase the Equipment Notes shall become irrevocable upon the
sixteenth day following the giving of written notice as provided above.

If the Owner Trustee or the Owner Participant on or before the
date of such purchase shall so request, the Note Holders will comply with all
the provisions of Section 2.07 to enable new Equipment Notes to be issued to
the Owner Trustee or the Owner Participant or its nominee in such denominations
as the Owner Trustee or the Owner Participant shall request. All taxes,
charges and expenses required pursuant to Section 2.09 in connection with the
issuance of such new Equipment Note shall be borne by the Owner Participant.
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SECTION 2.14. Subordination

(a) The Owner Trustee and, by acceptance of its Equipment
Notes of any Series, each Note Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Note Holder of such Series, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.

(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the event
that such Note Holder, in its capacity as a Note Holder, shall receive any
payment or distribution on any Secured Obligations in respect of such Series
which it is not entitled to receive under this Section 2.14 or Article III
hereof, it will hold any amount so received in trust for the Senior Holder (as
defined in Section 2.14(c) hereof) and will forthwith turn over such payment to
the Loan Trustee in the form received to be applied as provided in Article III
hereof.

(c) As used in this Section 2.14, the term "Senior Holder"
shall mean, (i) the Note Holders of Series A until the Secured Obligations in
respect of Series A Equipment Notes have been paid in full, (ii) after the
Secured Obligations in respect of Series A Equipment Notes have been paid in
full, the Note Holders of Series B until the Secured Obligations in respect of
Series B Equipment Notes have been paid in full and (iii) after the Secured
Obligations in respect of Series B Equipment Notes have been paid in full, the
Note Holders of Series C until the Secured Obligations in respect of Series C
Equipment Notes have been paid in full.
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ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE

SECTION 3.01. Basic Rent Distribution

Except as otherwise provided in Section 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Loan Trustee pursuant to Section
4.03 hereof shall be promptly distributed in the following order of priority:

First, (i) so much of such installment or payments as shall be required
to pay in full the aggregate amount of the payment or payments
of Original Amount and interest (as well as any interest on
any overdue Original Amount and, to the extent permitted by
Law, on any overdue interest) then due under all Series A
Equipment Notes shall be distributed to the Note Holders of
Series A ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments
then due under each Series A Equipment Note bears to the
aggregate amount of the payments then due under all Series A
Equipment Notes;

(ii) after giving effect to paragraph (i) above, so much of such
installment or payment remaining as shall be required to pay
in full the aggregate amount of the payment or payments of
Original Amount and interest (as well as any interest on any
overdue Original Amount and, to the extent permitted by Law,
on interest) then due under all Series B Equipment Notes shall
be distributed to the Note Holders of Series B ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each
Series B Equipment Note bears to the aggregate amount of the
payments then due under all Series B Equipment Notes; and

(iii) after giving effect to paragraph (ii) above, so much of such
installment or payment remaining as
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shall be required to pay in full the aggregate amount
of the payment or payments of Original Amount and
interest (as well as any interest on any overdue
Original Amount and, to the extent permitted by Law,
on any overdue interest) then due under all Series C
Equipment Notes shall be distributed to the Note
Holders of Series C ratably, without priority of one
over the other, in the proportion that the amount of
such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the
payments then due under all Series C Equipment Notes;
and

Second, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner Trustee; provided, however,
that if an Event of Default shall have occurred and be
continuing, then such balance shall not be distributed as
provided in this clause "Second" but shall be held by the Loan
Trustee as part of the Trust Indenture Estate and invested in
accordance with Section 5.09 hereof until whichever of the
following shall first occur: (i) all Events of Default shall
have been cured or waived, in which event such balance shall
be distributed as provided in this clause "Second", (ii)
Section 3.03 hereof shall be applicable, in which event such
balance shall be distributed in accordance with the provisions
of such Section 3.03, or (iii) the 180th day after the receipt
of such payment in which case such payment shall be distributed
as provided in this clause "Second".

SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Optional Redemption

Except as otherwise provided in Section 3.03 or 3.04 hereof,
any payments received by the Loan Trustee (i) with respect to the Airframe or
the Airframe and one or more Engines as the result of an Event of Loss, (ii)
pursuant to a voluntary termination of the Lease pursuant to Section 9 thereof,
or (iii) pursuant to an optional redemption of the Equipment Notes pursuant to
Section 11 of the Participation Agreement shall be applied to redemption of the
Equipment Notes and to all other Secured Obligations by applying such funds in
the following order of priority:
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First, (a) to reimburse the Loan Trustee and the Note Holders for any
reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or
indemnity by Lessee, under the Operative Agreements and then
(b) to pay any other Secured Obligations then due to the Loan
Trustee, the Note Holders and the other Indenture Indemnitees
under this Trust Indenture, the Participation Agreement or the
Equipment Notes;

Second, (i) to pay the amounts specified in paragraph (i) of clause
"Third" of Section 3.03 hereof plus Make-Whole Amount,
if any, then due and payable in respect of the Series A
Equipment Notes;

(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "Third" of
Section 3.03 hereof plus Make-Whole Amount, if any, then
due and payable in respect of the Series B Equipment
Notes; and

(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any,
then due and payable in respect of the Series C
Equipment Notes; and

Third, as provided in clause "Fourth" of Section 3.03 hereof;

provided, however, that if a Replacement Airframe or Replacement Engine shall
be substituted for the Airframe or Engine subject to such Event of Loss as
provided in Section 10 of the Lease and in accordance with Section 5.06 hereof,
any insurance, condemnation or similar proceeds which result from such Event of
Loss and are paid over to the Loan Trustee shall be held by the Loan Trustee as
permitted by Section 6.04 hereof (provided that such moneys shall be invested
as provided in Section 5.09 hereof) as additional security for the obligations
of Lessee under the Lessee Operative Agreements and, unless otherwise applied
pursuant to the Lease, such proceeds (and such investment earnings) shall be
released to the Lessee at the Lessee's written request upon the release of such
damaged Airframe or Engine and the replacement thereof as provided in the
Lease.
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SECTION 3.03. Payments After Event of Default

Except as otherwise provided in Section 3.04 hereof, all
payments received and amounts held or realized by the Loan Trustee (including
any amounts realized by the Loan Trustee from the exercise of any remedies
pursuant to Section 15 of the Lease or Article IV hereof) after an Event of
Default shall have occurred and be continuing and after the declaration
specified in Section 4.04(b) hereof, as well as all payments or amounts then
held by the Loan Trustee as part of the Trust Indenture Estate, shall be
promptly distributed by the Loan Trustee in the following order of priority:

First, so much of such payments or amounts as shall be required to (i)
reimburse the Loan Trustee or WTC for any tax, expense or other
loss (including, without limitation, all amounts to be expended
at the expense of, or charged upon the tolls, rents, revenues,
issues, products and profits of, the property included in the
Trust Indenture Estate (all such property being herein called
the "Mortgaged Property") pursuant to Section 4.05(b) hereof)
incurred by the Loan Trustee or WTC (to the extent not
previously reimbursed), 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 Loan Trustee, WTC or the
Note Holders in the protection, exercise or enforcement of any
right, power or remedy or any damages sustained by the Loan
Trustee, WTC or any Note Holder, liquidated or otherwise, upon
such Event of Default shall be applied by the Loan Trustee as
between itself, WTC and the Note Holders in reimbursement of
such expenses and any other expenses for which the Loan
Trustee, WTC or the Note Holders are entitled to reimbursement
under any Operative Agreement and (ii) all Secured Obligations
payable to the other Indenture Indemnitees hereunder, under the
Participation Agreement and the Lease; and in the case the
aggregate amount to be so distributed is insufficient to pay as
aforesaid in clauses (i) and (ii), then ratably, without
priority of one over the other, in proportion to the amounts
owed each hereunder;
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Third, (i) so much of such payments or amounts remaining as shall
be required to pay in full the aggregate unpaid Original
Amount of all Series A Equipment Notes, and the accrued
but unpaid interest and other amounts due thereon (other
than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect of
the Series A Equipment Notes (other than Make-Whole
Amount) to the date of distribution, shall be
distributed to the Note Holders of Series A, and in case
the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of
all Series A Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due
hereunder or thereunder (other than Make-Whole Amount,
if any) to the date of distribution, bears to the
aggregate unpaid Original Amount of all Series A
Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount) to the date of
distribution;

B Equipment Notes (other than Make-Whole Amount) to the
date of distribution, shall be distributed to the Note
Holders of Series B, and in case the aggregate amount so
to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over
the other, in the proportion that the aggregate unpaid
Original Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (other than
the Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original
Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other
amounts due thereon (other than the Make-Whole Amount)
to the date of distribution; and

(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Original Amount of
all Series C Equipment Notes, and the accrued but unpaid
interest and other amounts due thereon (other than
Make-Whole Amount which shall not be due and payable)
and all other Secured Obligations in respect of the
Series C Equipment Notes (other than Make-Whole Amount)
to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate
amount so to be distributed shall be insufficient to pay
in full as aforesaid, then ratably, without priority of
one over the other, in the proportion that the aggregate
unpaid Original Amount of all Series C Equipment Notes
held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder (other
than the Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original
Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other
amounts due thereon (other than the Make-Whole Amount)
to the date of distribution; and
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Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner Trustee.

No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes as a result
of an Event of Default.

SECTION 3.04. Certain Payments

(a) Any payments received by the Loan Trustee for which no
provision as to the application thereof is made in this Trust Indenture and for
which such provision is made in the Lease, the Participation Agreement or any
other Operative Agreement 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 Agreement, as the case may be.

(b) Notwithstanding anything to the contrary contained in
this Article III, the Loan Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or Lessee in respect of
the Loan Trustee in its individual capacity, any Note Holder or any other
Indenture Indemnitee, in each case whether pursuant to Section 9 of the
Participation Agreement or as Supplemental Rent, directly to the Person
entitled thereto. Any payment received by the Loan Trustee under the third
paragraph of Section 2.02 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement.

(d) Notwithstanding anything to the contrary contained in
this Article III, any payments received by the Loan Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the Loan
Trustee directly to the Person or Persons entitled thereto.

(e) Notwithstanding any provision of this Trust Indenture to
the contrary, any amounts held by Loan Trustee pursuant to the terms of the
Lease or any Permitted Sublease assignment shall be held by the Loan Trustee as
security for the obligations of Lessee under the Lessee Operative Agreements
and,
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if and when required by the Lease, paid and/or applied in accordance with the
applicable provisions of the Lease.

SECTION 3.05. Other Payments

Any payments received by the Loan Trustee for which no
provision as to the application thereof is made in the Lease, the Participation
Agreement, elsewhere in this Trust Indenture or in any other Operative
Agreement shall be distributed by the Loan Trustee to the extent received or
realized at any time (i) prior to the payment in full of all Secured
Obligations due the Note Holders, in the order of priority specified in Section
3.01 hereof subject to the proviso thereto, and (ii) after payment in full of
all Secured Obligations, in the following order of priority:

Second, in the manner provided in clause "Fourth" of Section 3.03
hereof.

Further, and except as otherwise provided in Sections 3.02,
3.03 and 3.04 hereof, all payments received and amounts realized by the Loan
Trustee under the Lease or otherwise with respect to the Aircraft (including,
without limitation, all amounts realized upon the sale or release of the
Aircraft after the termination of the Lease with respect thereto), to the
extent received or realized at any time after payment in full of all Secured
Obligations due the Note Holders, shall be distributed by the Loan Trustee in
the order of priority specified in clause (ii) of the immediately preceding
sentence of this Section 3.05.
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SECTION 3.06. Payments to Owner Trustee

Any amounts distributed hereunder by the Loan Trustee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type received
by the Loan Trustee 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 Loan Trustee from time to time. The Owner Trustee hereby notifies the Loan
Trustee that unless and until the Loan Trustee receives notice to the contrary
from the Owner Trustee, all amounts to be distributed to the Owner Trustee
pursuant to clause "Second" of Section 3.01 or clause "Fourth" of Section 3.03
hereof shall be distributed by wire transfer of funds of the type received by
the Loan Trustee to the Owner Participant's account (within the time limits
contemplated by Section 2.04(a)) specified in Schedule 1 to the Participation
Agreement.

ARTICLE IV

COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF LOAN TRUSTEE

SECTION 4.01. Covenants of Owner Trustee

The Owner Trustee hereby covenants and agrees (the covenants
and agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:

as may be necessary to duly discharge such Lessor Lien attributable to
it in its individual capacity; and that it will make restitution to
the Trust Indenture Estate for any actual diminution of the assets of
the Trust Estate resulting from such Lessor Liens attributable to it
in its individual capacity;

(c) in the event the Owner Trustee shall have Actual
Knowledge of an Event of Default, a Default or an Event of Loss, the
Owner Trustee will give prompt written notice of such Event of
Default, Default or Event of Loss to the Loan Trustee, each Note
Holder, Lessee and the Owner Participant;

(d) the Owner Trustee will furnish to the Note Holders and
the Loan Trustee, promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates and other
instruments furnished to the Owner Trustee under the Lease, including,
without limitation, a copy of any Termination Notice and a copy of
each report or notice received pursuant to Section 9 or 8.2 or Annex
D, Paragraph E of the Lease to the extent that the same shall not have
been furnished to the Note Holders or the Loan Trustee pursuant to the
Lease;

(e) except with the consent of the Loan Trustee (acting
pursuant to instructions given in accordance with Section 9.01 hereof)
or as provided in Sections 2, 11 and 13 of the Participation
Agreement, the Owner Trustee will not contract for, create, incur,
assume or suffer to exist any Debt, and will not guarantee (directly
or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so
doing, or otherwise), endorse or otherwise be or become contingently
liable, directly or indirectly, in connection with the Debt of any
other person; and

SECTION 4.02. Event of Default

(a) any Lease Event of Default (provided that any such Lease
Event of Default caused solely by a failure of Lessee to pay to the
Owner Trustee or the Owner Participant when due any amount that is
included in the definition of Excluded Payments shall not constitute
an Event of Default unless notice is given by the Owner Trustee to the
Loan Trustee that such failure shall constitute an Event of Default);
or

(d) any representation or warranty made by the Owner
Participant or the Owner Trustee herein, in the Participation
Agreement or in any certificate furnished by
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the Owner Participant or the Owner Trustee to the Loan Trustee or any
Note Holder in connection with the transactions contemplated by the
Operative Agreements shall prove to have been false or incorrect when
made in any material respect and continues to be material to the Loan
Trustee or the Note Holders; and if such misrepresentation is capable
of being corrected and if such correction is being sought diligently,
such misrepresentation shall not have been corrected within 60 days
(or, without affecting Section 4.02(f) hereof, in the case of the
representation made in Section 6.3.6 or 6.2.6 of the Participation
Agreement as to citizenship of the Owner Trustee in its individual
capacity or of the Owner Participant, respectively, as soon as is
reasonably practicable but in any event within 60 days) following
notice thereof from the Loan Trustee or any Note Holder to the Owner
Trustee or the Owner Participant, as the case may be; or

(e) other than as provided in (c) above or (f) below, any
failure by the Owner Trustee or Owner Participant to observe or
perform any other covenant or obligation of the Owner Trustee or Owner
Participant, as the case may be, for the benefit of the Loan Trustee
or the Note Holders contained in the Participation Agreement, Section
4.2.1 of the Trust Agreement, the Equipment Notes or this Trust
Indenture which is not remedied within a period of 60 days after
notice thereof has been given to the Owner Trustee and the Owner
Participant; or

(f) if at any time when the Aircraft is registered under the
Laws of the United States, the Owner Participant shall not be a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Part A of Subtitle VII of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, and as the result thereof the registration of the Aircraft under
the Federal Aviation Act, and regulations then applicable thereunder,
shall cease to be effective; provided that no Event of Default shall
be deemed to have occurred under this paragraph (f) unless such
circumstances continue unremedied for more than 60 days after the
Owner Participant has Actual Knowledge of the state of facts that
resulted in such ineffectiveness and of such loss of citizenship; or
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(g) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of the Owner Participant, the
Owner Trustee, the Trust or the Trust Estate under the federal
bankruptcy Laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar
Law in the United States or seeking the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Owner Participant, the Owner Trustee, the Trust or
the Trust Estate or for all or substantially all of its property, or
seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and
unstayed for a period of 60 consecutive days; or (ii) the commencement
by the Owner Participant, the Owner Trustee, the Trust or the Trust
Estate of a voluntary case or proceeding under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the
United States, or the consent by the Owner Participant, the Owner
Trustee, the Trust or the Trust Estate to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Owner Participant, the
Owner Trustee, the Trust or the Trust Estate or for all or
substantially all of its property, or the making by the Owner
Participant, the Owner Trustee, the Trust or the Trust Estate of any
assignment for the benefit of creditors or the Owner Participant or
the Owner Trustee shall take any action to authorize any of the
foregoing; provided, however, that an event referred to in this
Section 4.02(g) with respect to the Owner Participant shall not
constitute an Event of Default if within 30 days of the commencement
of the case or proceeding a final non-appealable order, judgment or
decree shall be entered in such case or proceeding by a court or a
trustee, custodian, receiver or liquidator, to the effect that, no
part of the Trust Estate (except for the Owner Participant's
beneficial interest therein) and no right, title or interest under the
Trust Indenture Estate shall be included in, or be subject to, any
declaration or adjudication of, or proceedings with respect to, the
bankruptcy, insolvency or liquidation of the Owner Participant
referred to in this Section 4.02(g).
848
49

SECTION 4.03. Certain Rights

The Loan Trustee shall give the Note Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of Default
of which the Loan Trustee has Actual Knowledge and, if any such Event of
Default results from a Lease Event of Default that can be cured by the payment
of money, shall give the Note Holders, the Owner Trustee and the Owner
Participant not less than ten Business Days' prior written notice of the date
(the "Enforcement Date") on or after which the Loan Trustee may commence and
consummate the exercise of any remedy or remedies described in Section 4.04,
4.05 or 4.06 hereof, or the exercise of any remedy or remedies pursuant to the
provisions of Section 15 of the Lease; provided, however, that in the event the
Loan Trustee shall have validly terminated the Lease, the Loan Trustee shall
not sell or lease, or otherwise afford the use of, the Aircraft or any portion
thereof to the Lessee or any Affiliate thereof. Without limiting the
generality of the foregoing, the Loan Trustee shall give the Owner Trustee and
the Owner Participant at least ten Business Days' prior written notice of any
termination of the Lease or of the exercise of any remedy or remedies pursuant
to Section 15 of the Lease. If an Event of Default shall have occurred and be
continuing, the Owner Trustee shall have the following rights hereunder, any of
which may be exercised directly by the Owner Participant.

If as a result of the occurrence of an Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease, the Loan
Trustee shall have insufficient funds to make any payment of Original Amount
and interest on any Equipment Note on the day it becomes due and payable, the
Owner Trustee may, but shall not be obligated to, pay the Loan Trustee prior to
the Enforcement Date, in the manner provided in Section 2.04 hereof, for
application in accordance with Section 3.01 hereof, an amount equal to the
portion of the Original Amount and interest (including interest, if any, on any
overdue payments of such portion of Original Amount and interest) then due and
payable on the Equipment Notes, and, unless the Owner Trustee has cured Events
of Default in respect of payments of Basic Rent on each of the three
immediately preceding Basic Rent payment dates, or the Owner Trustee has cured
six previous Events of Default in respect of payments of Basic Rent, such
payment by the Owner Trustee shall, solely for purposes of this Trust Indenture
be deemed to cure any Event of Default which would otherwise have arisen on
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50

account of the nonpayment by Lessee of such installment of Basic Rent (but not
any other Default or Event of Default which shall have occurred and be
continuing).

Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such Event
of Default, obtain any Lien on any of the Mortgaged Property or any Rent
payable under the Lease for or on account of costs or expenses incurred in
connection with the exercise of such right, nor shall any claim of the Owner
Trustee against Lessee or any other party for the repayment of such costs or
expenses impair the prior right and security interest of the Loan Trustee in
and to the Mortgaged Property. Upon any payment by the Owner Trustee pursuant
to the first or second preceding paragraphs of this Section 4.03, the Owner
Trustee shall be subrogated to the rights of the Loan Trustee and the Note
Holders in respect of the Basic Rent which was overdue at the time of such
payment and interest payable by the Lessee on account of its being overdue and
any Supplemental Rent in respect of the reimbursement of amounts paid by Owner
Trustee pursuant to the immediately preceding paragraph (but in either case
shall have no rights as a secured party hereunder), and thereafter, the Owner
Trustee shall be entitled to receive such overdue Basic Rent or Supplemental
Rent, as the case may be, and interest thereon upon receipt thereof by the Loan
Trustee; provided, however, that (i) if the Original Amount and interest on the
Equipment Notes shall have become due and payable pursuant to Section 4.04(b)
hereof, such subrogation shall, until the Secured Obligations shall have been
paid in full, be subordinate to the rights of the Loan Trustee, the Note
Holders and the Indenture Indemnitees in respect of such payment of overdue
Basic Rent, Supplemental Rent and such interest and (ii) the Owner Trustee
shall not otherwise attempt to recover any such amount paid by it on behalf of
the Lessee pursuant to this Section 4.03 except by demanding of the Lessee
payment of such amount, or by commencing an action at law
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51

against the Lessee and obtaining and enforcing a judgment against the Lessee
for the payment of such amount or taking appropriate action in a pending action
at law against the Lessee (provided, that at no time while an Event of Default
shall have occurred and be continuing shall any such demand be made or shall
any such action be commenced (or continued) and any amounts nevertheless
received by the Owner Trustee in respect thereof shall be held in trust for the
benefit of, and promptly paid to, the Loan Trustee for distribution as provided
in Section 3.03 hereof).

Neither the Owner Trustee nor the Owner Participant shall have
the right to cure any Lease Event of Default or Lease Default except as
specified in this Section 4.03.
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52

SECTION 4.04. Remedies

(a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then and in every
such case the Loan Trustee may, subject to Section 4.03 and to the second and
third paragraphs of this Section 4.04(a), exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this Article IV and
shall have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and, in the event such Event of Default is
also a Lease Event of Default, any and all of the remedies pursuant to Section
15 of the Lease and pursuant to any Permitted Sublease assignment and may take
possession of all or any part of the properties covered or intended to be
covered by the Lien created hereby or pursuant hereto and may exclude the Owner
Participant, the Owner Trustee and Lessee and all persons claiming under any of
them wholly or partly therefrom; provided, that the Loan Trustee shall give the
Owner Trustee and the Owner Participant twenty days' prior written notice of
its intention to sell the Aircraft; provided, however, that in the event the
Loan Trustee shall have validly terminated the Lease, the Loan Trustee shall
not sell or lease, or otherwise afford the use of, the Aircraft or any portion
thereof to the Lessee or any Affiliate thereof. Unless an Event of Default not
resulting from or relating to a Lease Event of Default has occurred and is
continuing, the Owner Participant may bid at the sale and become the purchaser.
Without limiting any of the foregoing, it is understood and agreed that the
Loan Trustee may exercise any right of sale of the Aircraft available to it,
even though it shall not have taken possession of the Aircraft and shall not
have possession thereof at the time of such sale.

Anything in this Trust Indenture to the contrary
notwithstanding, the Loan Trustee shall not be entitled to exercise any remedy
hereunder as a result of an Event of Default which arises solely by reason of
one or more events or circumstances which constitute a Lease Event of Default
unless the Loan Trustee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the dispossessory
remedies provided for in Section 15 of the Lease with respect to the Aircraft;
provided, however, that such requirement to exercise one or more of such
remedies under the Lease shall not apply in circumstances where the Loan
Trustee is,
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53

and has been, for a continuous period in excess of 60 days or such other period
as may be specified in Section 1110(a)(l)(A) of the Bankruptcy Code (such
60-day or other period being the "New Section 1110 Period"), involuntarily
stayed or prohibited by applicable law or court order from exercising such
remedies under the Lease (a "Continuous Stay Period"); provided further,
however, that the requirement to exercise one or more of such remedies under
the Lease shall nonetheless be applicable during a Continuous Stay Period
subsequent to the expiration of the New Section 1110 Period to the extent that
the continuation of such Continuous Stay Period subsequent to the expiration of
the New Section 1110 Period (A) results from an agreement by the trustee or the
debtor-in-possession in such proceeding during the New Section 1110 Period with
the approval of the relevant court to perform the Lease in accordance with
Section 1110(a)(l)(A) of the Bankruptcy Code and continues to perform as
required by Section 1110(a)(l)(A-B) of the Bankruptcy Code or (B) is an
extension of the New Section 1110 Period with the consent of the Loan Trustee
pursuant to Section 1110(b) of the Bankruptcy Code or (C) results from the
Lessee's assumption during the New Section 1110 Period with the approval of the
relevant court of the Lease pursuant to Section 365 of the Bankruptcy Code and
Lessee's continuous performance of the Lease as so assumed or (D) is the
consequence of the Loan Trustee's own failure to give any requisite notice to
any person. In the event that the applicability of Section 1110 of the
Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, so long as the Loan Trustee fails to participate in such
proceedings, the Owner Trustee shall have the right (without affecting in any
way any rights or remedy of the Loan Trustee hereunder) to participate in such
proceedings.

It is expressly understood and agreed that, subject only to
the preceding paragraph, the inability, described in such paragraph, of the
Loan Trustee to exercise any right or remedy under the Lease shall in no event
and under no circumstances prevent the Loan Trustee from exercising any or all
of its rights, powers and remedies under this Trust Indenture, including,
without limitation, this Article IV.

(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Loan Trustee may (and shall, upon
receipt of a written demand therefor from a Majority in Interest of Note
Holders), subject to Section 4.03 hereof, at
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any time, by delivery of written notice or notices to the Owner Trustee and the
Owner Participant, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Original Amount of all Equipment Notes then outstanding,
together with accrued but unpaid interest thereon (without Make-Whole Amount)
and other amounts due thereunder, shall immediately become due and payable
without presentment, demand, protest or notice, all of which are hereby waived;
provided that if an Event of Default referred to in clause (g) of Section 4.02
hereof shall have occurred or a Lease Event of Default under Section 14.5 of
the Lease shall have occurred, then and in every such case the unpaid Original
Amount then outstanding, together with accrued but unpaid interest and all
other amounts due thereunder and hereunder shall immediately and without
further act become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; provided further that in the event of a
reorganization proceeding involving the Lessee instituted under Chapter 11 of
the Bankruptcy Code, if no Lease Event of Default (including any Lease Event of
Default set forth in Section 14.3 of the Lease) and no other Event of Default
(other than the failure to pay the Original Amount of the Equipment Notes which
by such declaration shall have become payable) exists at any time after the
consummation of such proceeding, such declaration shall be automatically
rescinded without any further action on the part of any Note Holder.

This Section 4.04(b), however, is subject to the condition
that, if at any time after the Original Amount of the Equipment Notes shall
have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, all overdue
payments of interest upon the Equipment Notes and all other amounts payable
under the Equipment Notes (except the Original Amount of the Equipment Notes
which by such declaration shall have become payable) shall have been duly paid,
and every other Default and Event of Default with respect to any covenant or
provision of this Trust Indenture shall have been cured, then and in every such
case a Majority in Interest of Note Holders may (but shall not be obligated
to), by written instrument filed with the Loan Trustee, rescind and annul the
Loan Trustee's declaration (or such automatic acceleration) and its
consequences; but no such rescission or annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.
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55

(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement (or its designee)
is a Note Holder, the Loan Trustee will not be authorized or empowered to
acquire title to any Mortgaged Property or take any action with respect to any
Mortgaged Property so acquired by it if such acquisition or action would cause
any Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
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56

SECTION 4.05. Return of Aircraft, Etc.

(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof, at the request of the
Loan Trustee, the Owner Trustee shall promptly execute and deliver to the Loan
Trustee such instruments of title and other documents as the Loan Trustee may
deem necessary or advisable to enable the Loan Trustee or an agent or
representative designated by the Loan Trustee, at such time or times and place
or places as the Loan Trustee may specify, to obtain possession of all or any
part of the Mortgaged Property included in the Trust Indenture Estate to which
the Loan Trustee 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 Loan Trustee, the Loan Trustee may (i) obtain a
judgment conferring on the Loan Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver such instruments and
documents to the Loan Trustee, to the entry of which judgment the Owner Trustee
hereby specifically consents to the fullest extent permitted by Law, and (ii)
pursue all or part of such Mortgaged Property wherever it may be found and, in
the event that a Lease Event of Default has occurred and is continuing, may
enter any of the premises of Lessee wherever such Mortgaged Property may be or
be supposed to be and search for such Mortgaged Property and take possession of
and remove such Mortgaged Property. All expenses of obtaining such judgment or
of pursuing, searching for and taking such property shall, until paid, be
secured by the Lien of this Trust Indenture.

(b) Upon every such taking of possession, the Loan Trustee
may, from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Loan Trustee
shall have the right to maintain, use, operate, store, insure, lease, control,
manage, dispose of, modify or alter the Mortgaged Property and to carry on the
business and to exercise all rights and powers of the Owner Participant and the
Owner Trustee relating to the Mortgaged Property, as the Loan Trustee shall
deem best, including the right to enter into any and all such agreements with
respect to the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition,
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modification or alteration of the Mortgaged Property or any part thereof as the
Loan Trustee may determine, and the Loan Trustee shall be entitled to collect
and receive directly all tolls, rents (including Rent), revenues, issues,
income, products and profits of the Mortgaged Property and every part thereof,
except Excluded Payments, without prejudice, however, to the right of the Loan
Trustee under any provision of this Trust Indenture to collect and receive all
cash held by, or required to be deposited with, the Loan Trustee hereunder.
Such tolls, rents (including Rent), revenues, issues, income, products and
profits shall be applied to pay the expenses of the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
improvement, modification or alteration of the Mortgaged Property and of
conducting the business thereof, and to make all payments which the Loan
Trustee may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Mortgaged Property or any part
thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the Owner
Trustee), and all other payments which the Loan Trustee may be required or
authorized to make under any provision of this Trust Indenture, as well as just
and reasonable compensation for the services of the Loan Trustee, and of all
persons properly engaged and employed by the Loan Trustee with respect hereto.

SECTION 4.06. Remedies Cumulative

Each and every right, power and remedy given to the Loan
Trustee specifically or otherwise in this Trust Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at Law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by the Loan Trustee, 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 Loan Trustee in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the Owner Trustee or Lessee or to be an acquiescence
therein.
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SECTION 4.07. Discontinuance of Proceedings

In case the Loan Trustee shall have instituted any proceeding
to enforce any right, power or remedy under this Trust Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Loan Trustee, then and in every such case the Owner Trustee,
the Loan Trustee and Lessee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder with
respect to the Mortgaged Property, and all rights, remedies and powers of the
Owner Trustee, the Loan Trustee or Lessee shall continue as if no such
proceedings had been instituted.

SECTION 4.08. Waiver of Past Defaults

Upon written instruction from a Majority in Interest of Note
Holders, the Loan Trustee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; provided,
that in the absence of written instructions from all the Note Holders, the Loan
Trustee shall not waive any Default (i) in the payment of the Original Amount,
Make-Whole Amount, if any, and interest and other amounts due under any
Equipment Note then outstanding, or (ii) in respect of a covenant or provision
hereof which, under Article IX hereof, cannot be modified or amended without
the consent of each Note Holder.
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SECTION 4.09. Appointment of Receiver

The Loan Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Loan Trustee or any successor or
nominee thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the Owner Trustee hereby
consents to the appointment of such a receiver and will not oppose any such
appointment. Any receiver appointed for all or any part of the Mortgaged
Property shall be entitled to exercise all the rights and powers of the Loan
Trustee with respect to the Mortgaged Property.

SECTION 4.10. Loan Trustee Authorized to Execute Bills of
Sale, Etc.

Subject to the provisions of this Trust Indenture, the Owner
Trustee irrevocably appoints the Loan Trustee the true and lawful
attorney-in-fact of the Owner Trustee (which appointment is coupled with an
interest) in its name and stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or delivery for the enforcement of
the Lien of this Trust Indenture, whether pursuant to foreclosure or power of
sale, assignments and other instruments as may be necessary or appropriate,
with full power of substitution, the Owner Trustee hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue hereof
in accordance with applicable law. Nevertheless, if so requested by the Loan
Trustee or any purchaser, the Owner Trustee shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the Loan
Trustee or such purchaser all bills of sale, assignments, releases and other
proper instruments to effect such ratification and confirmation as may be
designated in any such request.
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SECTION 4.11. Rights of Note Holders to Receive Payment

ARTICLE V

DUTIES OF THE LOAN TRUSTEE

SECTION 5.01. Notice of Event of Default

If the Loan Trustee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay Rent, the Loan Trustee
shall give prompt written notice thereof to the Owner Trustee, the Owner
Participant, Lessee, and each Note Holder. Subject to the terms of Sections
2.13, 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the Loan Trustee shall take such
action, or refrain from taking such action, with respect to such Event of
Default or Default (including with respect to the exercise of any rights or
remedies hereunder) as the Loan Trustee shall be instructed in writing by a
Majority in Interest of Note Holders. Subject to the provisions of Sections
2.13, 4.03, 4.04 and 5.03, if the Loan Trustee shall not have received
instructions as above provided within 20 days after mailing notice of such
Event of Default to the Note Holders, the Loan Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall
be under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; provided, however, that the Loan Trustee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest
of Note Holders. If the Loan Trustee 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 Trust Indenture, the Loan Trustee shall forthwith notify
the Owner Participant, the Note Holders, the Owner Trustee and Lessee. For all
purposes of this Trust Indenture, in the absence of Actual Knowledge on the
part of the Loan Trustee, the Owner Trustee or the Owner Participant, the Loan
Trustee, the Owner Trustee or the Owner Participant, as the case may be, shall
not be deemed to have knowledge of a Default or an Event of Default (except, in
the case of the Loan Trustee, 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 Loan Trustee,
which failure shall constitute knowledge of a Default) unless notified in
writing by Lessee, the Owner Trustee, the Owner Participant or one or more Note
Holders.
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SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations

(a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and
(b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and
from time to time of a Majority in Interest of Note Holders, the Loan Trustee
shall, subject to the terms of this Section 5.02, take such of the following
actions as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder as shall be
specified in such instructions; (ii) give such notice or direction or exercise
such right, remedy or power under the Lease, the Participation Agreement, the
Purchase Agreement, the Purchase Agreement Assignment or any other part of the
Trust Indenture Estate as shall be specified in such instructions; and (iii)
approve as satisfactory to the Loan Trustee all matters required by the terms
of the Lease to be satisfactory to the Owner Trustee, it being understood that
without the written instructions of a Majority in Interest of Note Holders, the
Loan Trustee shall not approve any such matter as satisfactory to the Loan
Trustee; provided, that anything contained in this Trust Indenture, the Lease
or the other Operative Agreements to the contrary notwithstanding, but subject
to the next paragraph hereof:

(1) the Owner Trustee or the Owner Participant may, without
the consent of the Loan Trustee, demand, collect, ▇▇▇ for or otherwise
obtain all amounts included in Excluded Payments from Lessee and seek
legal or equitable remedies to require Lessee to maintain the
insurance coverage referred to in Section 11 of the Lease (or the
comparable provisions of any assigned Permitted Sublease); provided,
that the rights referred to in this clause (1) shall not be deemed to
include the exercise of any remedies provided for in Section 15 of the
Lease other than the right to proceed by appropriate court action,
either at Law or in equity, to enforce payment by Lessee of such
amounts included in Excluded Payments or performance by Lessee of such
insurance covenant or to recover damages for the breach thereof or for
specific performance of any other term of the Lease (or the comparable
provisions of any assigned Permitted Sublease);
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(2) (A) the Loan Trustee shall not, without the consent of
the Owner Trustee, enter into, execute or deliver amendments or
modifications in respect of any of the provisions of the Lease, any
assigned Permitted Sublease or any Permitted Sublease assignment, and
(B) unless a Mortgagee Event shall have occurred and be continuing,
the Loan Trustee shall not, without the consent of the Owner Trustee,
which consent shall not be withheld if no right or interest of the
Owner Trustee or the Owner Participant shall be diminished or impaired
thereby, (i) enter into, execute or deliver waivers or consents in
respect of any of the provisions of the Lease, or (ii) approve any
accountants, engineers, appraisers or counsel as satisfactory to
render services for or issue opinions to the Owner Trustee pursuant to
the Operative Agreements, provided that whether or not any Mortgagee
Event has occurred and is continuing, the Owner Trustee's consent
shall be required with respect to any waivers or consents in respect
of any of the provisions of Section 5, 7 or 11 of the Lease, or of any
other Section of the Lease to the extent such action shall affect (y)
the amount or timing of, or the right to enforce payment of any
Excluded Payment or (z) the amount of timing of any amounts payable by
the Lessee under the Lease as originally executed (or as subsequently
modified with the consent of the Owner Trustee) which, absent the
occurrence and continuance of an Event of Default hereunder, would be
distributable to the Owner Trustee under Article III hereof;

(3) whether or not a Default or Event of Default under the
Trust Indenture has occurred and is continuing, the Owner Trustee and
the Owner Participant shall have the right, together with the Loan
Trustee, (i) to receive from Lessee or any Permitted Sublessee
certificates and other documents and information which Lessee is
required to give or furnish to the Owner Trustee or the Lessor
pursuant to any Operative Agreement and (ii) to inspect in accordance
with the Lease the Airframe and Engines and all Aircraft Documents;

(5) so long as no Mortgagee Event has occurred and is
continuing, the Owner Trustee shall have the right, to the exclusion
of the Loan Trustee, to adjust Basic Rent, Stipulated Loss Values and
Termination Values as provided in Section 3.2 of the Lease;

(6) whether or not a Default or Event of Default under the
Trust Indenture has occurred and is continuing, the Owner Trustee may,
without the consent of the Loan Trustee, (i) solicit and make bids
with respect to the Aircraft under Section 9 of the Lease in respect
of a termination of the Lease by Lessee pursuant to Section 9 thereof,
(ii) determine Fair Market Sales Value and Fair Market Rental Value
under Section 17 of the Lease for all purposes except following an
Event of Default pursuant to Section 15 of the Lease, and (iii) make
an election pursuant to and in accordance with the provisions of
Sections 9.1(b), 9.2 and 9.3 of the Lease; and

(7) so long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the "Lessor" under the Lease or any
assigned Permitted Sublease shall be exercised by the Owner Trustee to
the exclusion of the Loan Trustee including, without limitation, the
right to (i) exercise all rights with respect to Lessee's use and
operation, modification or maintenance of the Aircraft and any Engine
which the Lease specifically confers on the Lessor, and (ii) consent
to and approve any assignment pursuant to Section 13 of the Lease;
provided that the foregoing shall not (x) limit (A) any rights
separately granted to the Loan Trustee under the Operative Agreements
or (B) the right of the Loan Trustee to receive any funds to be
delivered to the "Lessor" under the Lease (except with respect to
Excluded Payments) and under the Purchase Agreement or (y) confer upon
the Owner Trustee the right to adversely affect the validity or
enforceability of the lien of this Indenture.

Notwithstanding anything to the contrary contained herein
(including this Section 5.02), the Loan Trustee shall have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Section 15 thereof (other than with respect to a
Lease Event of
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Default described in the proviso to Section 14.1 thereof) and (B) subject only
to the provisions of Sections 4.03, 4.04(a) and 2.13 hereof, exercise the
remedies set forth in such Section 15 (other than in connection with Excluded
Payments and provided that each of the Owner Trustee, Owner Participant and
Loan Trustee shall independently retain the rights set forth in clause (ii) of
Section 15.1.5 of the Lease) at any time that a Lease Event of Default shall
have occurred and be continuing. Further and for the avoidance of doubt, and
anything to the contrary contained herein (including this Section 5.02), in no
event may the Owner Trustee amend or otherwise modify the provisions of Section
3.2.1(e) of the Lease or of the final sentence of the definition of Stipulated
Loss Value or Termination Value, in any such case, without the prior written
consent of the Loan Trustee.

The Loan Trustee will execute and the Owner Trustee will file
or cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Trust
Indenture Estate as may be specified from time to time in written instructions
of a Majority in Interest of Note Holders (which instructions shall be
accompanied by the form of such continuation statement so to be filed). The
Loan Trustee will furnish to each Note Holder (and, during the continuation of
a Mortgagee Event, to the Owner Trustee and Owner Participant), promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates and other instruments furnished to the Loan Trustee under
the Lease or hereunder, including, without limitation, a copy of any
Termination Notice (as defined in the Lease) and a copy of each report or
notice received pursuant to Section 9 and Paragraph E of Annex D of the Lease,
respectively, to the extent that the same shall not have been furnished to such
holder pursuant hereto or to the Lease.

(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event of
Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Note Holders, the Loan Trustee shall declare the Lease
to be in default pursuant to Section 15 thereof and exercise those remedies
specified by such Note Holders. The Loan Trustee agrees to provide to the Note
Holders, the Owner Trustee, the Owner Participant and Lessee concurrently with
such declaration by the Loan Trustee, notice of such declaration by the Loan
Trustee.
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SECTION 5.03. Indemnification

The Loan Trustee shall not be required to take any action or
refrain from taking any action under Section 5.01 (other than the first
sentence thereof), 5.02 or Article IV hereof unless the Loan Trustee shall have
been indemnified to its reasonable satisfaction against any liability, cost or
expense (including counsel fees) which may be incurred in connection therewith
pursuant to a written agreement with one or more Note Holders. The Loan
Trustee agrees that it shall look solely to the Note Holders for the
satisfaction of any indemnity (except expenses for foreclosure of the type
referred to in clause "First" of Section 3.03 hereof) owed to it pursuant to
this Section 5.03. The Loan Trustee shall not be under any obligation to take
any action under this Trust Indenture or any other Operative Agreement and
nothing herein or therein shall require the Loan Trustee to expend or risk its
own funds or otherwise incur the risk of any financial liability in the
performance of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (the written indemnity of any
Note Holder who is a QIB, signed by an authorized officer thereof, in favor of,
delivered to and in form reasonably satisfactory to Loan Trustee shall be
accepted as reasonable assurance of adequate indemnity). The Loan Trustee
shall not be required to take any action under Section 5.01 (other than the
first sentence thereof) or 5.02 or Article IV hereof, nor shall any other
provision of this Trust Indenture or any other Operative Agreement be deemed to
impose a duty on the Loan Trustee to take any action, if the Loan Trustee shall
have been advised by counsel that such action is contrary to the terms hereof
or of the Lease or is otherwise contrary to Law.

SECTION 5.04. No Duties Except as Specified in Trust Indenture
or Instructions

The Loan Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate, or to otherwise
take or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as
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expressly provided in written instructions from Note Holders as provided in
this Trust Indenture; and no implied duties or obligations shall be read into
this Trust Indenture against the Loan Trustee. The Loan Trustee agrees that it
will in its individual capacity and at its own cost and expense (but without
any right of indemnity in respect of any such cost or expense under Section
7.01 hereof), promptly take such action as may be necessary duly to discharge
all liens and encumbrances on any part of the Trust Indenture Estate which
result from claims against it in its individual capacity not related to the
ownership of the Aircraft or the administration of the Trust Indenture Estate
or any other transaction pursuant to this Trust Indenture or any document
included in the Trust Indenture Estate.

SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions

The Owner Trustee and the Loan Trustee 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 Loan
Trustee pursuant to this Trust Indenture and in accordance with the express
terms hereof.

SECTION 5.06. Replacement Airframes and Replacement Engines

At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, if no Lease Event of Default is continuing, the Owner Trustee shall
direct the Loan Trustee to execute and deliver to the Owner Trustee an
appropriate instrument releasing such Airframe and/or Engine as appropriate
from the Lien of this Trust Indenture and the Loan Trustee shall execute and
deliver such instrument as aforesaid, but only upon compliance by Lessee with
the applicable provisions of Section 10 of the Lease.
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SECTION 5.07. Indenture Supplements for Replacements

If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 10 of the Lease, the Owner Trustee and
the Loan Trustee agree for the benefit of the Note Holders and Lessee, subject
to fulfillment of the conditions precedent and compliance by Lessee with its
obligations set forth in Section 10 of the Lease and the requirements of
Section 5.06 hereof with respect to such Replacement Airframe or Replacement
Engine, to execute and deliver a Lease Supplement and a Trust Indenture
Supplement, as applicable, as contemplated by Section 10 of the Lease.

SECTION 5.08. Effect of Replacement

SECTION 5.09. Investment of Amounts Held by Loan Trustee

Any amounts held by the Loan Trustee as assignee of the Owner
Trustee's rights to hold monies for security pursuant to Section 4.5 of the
Lease shall be held in accordance with the terms of such Section and the Loan
Trustee agrees, for the benefit of Lessee, to perform the duties of the Owner
Trustee under such Section. Any amounts held by the Loan Trustee pursuant to
the proviso to the first sentence of Section 3.01, pursuant to Section 3.02, or
pursuant to any provision of any other Operative Agreement providing for
amounts to be held by the Loan Trustee which are not distributed pursuant to
the other provisions of Article III hereof shall be invested by the Loan
Trustee from time to time in Cash Equivalents as directed by the Owner Trustee
so long as the Loan Trustee may acquire the same using its best efforts.
Unless otherwise expressly provided in this Trust Indenture, any income
realized as a result of any such
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investment, net of the Loan Trustee's reasonable fees and expenses in making
such investment, shall be held and applied by the Loan Trustee 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 Loan Trustee shall not be liable
for any loss resulting from any investment required to be made by it under this
Trust Indenture other than by reason of its willful misconduct or gross
negligence, and any such investment may be sold (without regard to its
maturity) by the Loan Trustee without instructions whenever such sale is
necessary to make a distribution required by this Trust Indenture.
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ARTICLE VI

THE OWNER TRUSTEE AND THE LOAN TRUSTEE

SECTION 6.01. Acceptance of Trusts and Duties

The Loan Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of this
Trust Indenture and agrees to receive and disburse all monies constituting part
of the Trust Indenture Estate in accordance with the terms hereof. The Owner
Trustee, in its individual capacity, and the Loan Trustee, in its individual
capacity, shall not be answerable or accountable under any circumstances,
except (i) for their own willful misconduct or gross negligence (other than for
the handling of funds, for which the standard of accountability shall be
willful misconduct or negligence), (ii) in the case of the Loan Trustee, as
provided in the fourth sentence of Section 2.04(a) hereof and the last sentence
of Section 5.04 hereof, and (iii) for liabilities that may result, in the case
of the Owner Trustee, from the inaccuracy of any representation or warranty of
the Owner Trustee expressly made in its individual capacity in the
Participation Agreement or in Section 4.01(b) or 6.03 hereof (or in any
certificate furnished to the Loan Trustee or any Note Holder in connection with
the transactions contemplated by the Operative Agreements) or, in the case of
the Loan Trustee (in its individual capacity), from the inaccuracy of any
representation or warranty of the Loan Trustee (in its individual capacity) in
the Participation Agreement or expressly made hereunder. Neither the Owner
Trustee nor the Loan Trustee shall be liable for any action or inaction of the
other or of the Owner Participant.
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SECTION 6.02. Absence of Duties

In the case of the Loan Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections 5.03,
5.04 and 6.08 hereof and, in the case of the Owner Trustee, except as provided
in Section 4.01(b) hereof, the Owner Trustee and the Loan Trustee shall have no
duty (i) to see to any registration of the Aircraft or any recording or filing
of the Lease or of this Trust Indenture or any other document, or to see to the
maintenance of any such registration, recording or filing, (ii) to see to any
insurance on the Aircraft or to effect or maintain any such insurance, whether
or not Lessee shall be in default with respect thereto, (iii) to see to the
payment or discharge of any lien or encumbrance of any kind against any part of
the Trust Estate or the Trust Indenture Estate, (iv) to confirm, verify or
inquire into the failure to receive any financial statements from Lessee, or
(v) to inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of Lessee's covenants under the Lease or any
of the Permitted Sublessee's covenants under any assigned Permitted Sublease
with respect to the Aircraft. The Owner Participant shall not have any duty or
responsibility hereunder, including, without limitation, any of the duties
mentioned in clauses (i) through (v) above; provided, that nothing contained in
this sentence shall limit any obligations of the Owner Participant under the
Participation Agreement or relieve the Owner Participant from any restriction
under Section 4.03 hereof.

SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents

NEITHER THE LOAN TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE
TRUST AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY
EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR
A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS
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BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, except the Owner Trustee in its individual capacity warrants that
(i) the Owner Trustee has received on the Delivery Date whatever title was
conveyed to it, and (ii) the Aircraft is free and clear of Lessor Liens
(including for this purpose Liens that would be Lessor Liens but 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 Loan Trustee, in its
individual or trust capacities, makes or shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Trust Indenture, the Trust Agreement, the Participation Agreement, the
Equipment Notes, the Lease, the Purchase Agreement or the Purchase Agreement
Assignment with the Consent and Agreement and the Engine Consent and Agreement
attached thereto, or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of the Owner Trustee
made in its individual capacity and the representations and warranties of the
Loan Trustee in its individual capacity, in each case expressly made in this
Trust Indenture or in the Participation Agreement. The Loan Participants, the
Note Holders and the Owner Participant make no representation or warranty
hereunder whatsoever.

SECTION 6.04. No Segregation of Monies; No Interest

Any monies paid to or retained by the Loan Trustee pursuant to
any provision hereof and not then required to be distributed to the Note
Holders, Lessee or the Owner Trustee as provided in Article III hereof need not
be segregated in any manner except to the extent required by Law or Section 4.5
of the Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Loan Trustee shall not be
liable for any interest thereon (except that the Loan Trustee shall invest all
monies held as directed by Lessee so long as no Lease Event of Default or Lease
Default has occurred and is continuing (or in the absence of such direction, by
the Majority In Interest of Note Holders) in Cash Equivalents; provided,
however, that any payments received, or applied hereunder, by the Loan Trustee
shall be accounted for by the Loan Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
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SECTION 6.05. Reliance; Agreements; Advice of Counsel

Neither the Owner Trustee nor the Loan Trustee 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 Loan Trustee
may accept a copy of a resolution of the Board of Directors (or Executive
Committee thereof) of any party to the Participation Agreement, certified by
the Secretary or an Assistant Secretary thereof as duly adopted and in full
force and effect, as conclusive evidence that such resolution has been duly
adopted and that the same is in full force and effect. As to the aggregate
unpaid Original Amount of Equipment Notes outstanding as of any date, the Owner
Trustee may for all purposes hereof rely on a certificate signed by any Vice
President or other authorized corporate trust officer of the Loan Trustee. 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 Loan Trustee
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 Loan Trustee for any
action taken or omitted to be taken by them in good faith in reliance thereon.
The Loan Trustee shall assume, and shall be fully protected in assuming, that
the Owner Trustee is authorized by the Trust Agreement to enter into this Trust
Indenture and to take all action to be taken by it pursuant to the provisions
hereof, and shall not inquire into the authorization of the Owner Trustee with
respect thereto. In the administration of the trusts hereunder, the Owner
Trustee and the Loan Trustee each may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through agents
or attorneys and may, at the expense of the Trust Indenture Estate, advise with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Owner Trustee and the Loan Trustee 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.
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SECTION 6.06. Capacity in Which Acting

SECTION 6.07. Compensation

The Loan Trustee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and
expenses of counsel), for all services rendered hereunder and shall, on and
subsequent to an Event of Default hereunder, have a priority claim on the Trust
Indenture Estate for the payment of such compensation, to the extent that such
compensation shall not be paid by Lessee, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Trust Indenture Estate toward such payments. The Loan
Trustee agrees that it shall have no right against the Loan Participants, the
Note Holders, the Owner Trustee or the Owner Participant for any fee as
compensation for its services as trustee under this Trust Indenture.

SECTION 6.08. Instructions from Note Holders

In the administration of the trusts created hereunder, the
Loan Trustee shall have the right to seek instructions from a Majority in
Interest of Note Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should Loan Trustee's duties or
obligations hereunder be unclear, and Loan Trustee shall incur no liability in
refraining from acting until it receives such instructions. Loan Trustee shall
be fully protected for acting in accordance with any instructions received
under this Section 6.08.
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ARTICLE VII

INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE

SECTION 7.01. Scope of Indemnification

The Owner Trustee, not in its individual capacity, but solely
as Owner Trustee, hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, except as to matters covered by any
indemnity furnished as contemplated by Section 5.03 hereof and except as
otherwise provided in Section 2.03 and 2.04(b) hereof, to assume liability for,
and does hereby indemnify, protect, save and keep harmless the Loan Trustee (in
its individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Loan Trustee on
or measured by any compensation received by the Loan Trustee for its services
under this Trust Indenture), claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of any kind and nature
whatsoever, which may be imposed on, incurred by or asserted against the Loan
Trustee (whether or not also indemnified against by any other person under any
other document) in any way relating to or arising out of this Trust Indenture
or any other Operative Agreement to which it is a party or the enforcement of
any of the terms of any thereof, or in any way relating to or arising out of
the manufacture, purchase, acceptance, non-acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement), or in any way relating to or arising out
of the administration of the Trust Indenture Estate or the action or inaction
of the Loan Trustee hereunder except only in the case of willful misconduct or
gross negligence (or negligence in the case of handling funds) of the Loan
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Loan Trustee (in its
individual capacity) referred to in Section 6.03 hereof, or as provided in
Section 6.01 hereof or in the last sentence of Section 5.04 hereof, or as
otherwise excluded by the terms of Section 9.1 or 9.3 of the Participation
Agreement from Lessee's indemnities under such Sections. In addition, if
necessary, the Loan Trustee shall be entitled to indemnification from the Trust
Indenture Estate for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Section 7.01 to the extent not reimbursed by Lessee or others, but without
releasing any of them from their respective agreements of reimbursement; and to
secure
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the same the Loan Trustee shall have a prior Lien on the Trust Indenture
Estate. Without limiting the foregoing, the Loan Trustee agrees that, prior to
seeking indemnification from the Trust Indenture Estate, it will demand, and
diligently pursue in good faith (but with no duty to exhaust all legal remedies
therefor), indemnification available to the Loan Trustee from Lessee under the
Lease or the Participation Agreement.

ARTICLE VIII

SUCCESSOR AND SEPARATE TRUSTEES

SECTION 8.01. Notice of Successor Owner Trustee

SECTION 8.02. Resignation of Loan Trustee; Appointment
of Successor

(a) The Loan Trustee or any successor thereto may resign at
any time without cause by giving at least 30 days' prior written notice to
Lessee, the Owner Trustee, the Owner Participant and each Note Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Loan Trustee. In addition, a Majority in Interest of Note Holders
may at any time (but only with the consent of the Lessee, which consent shall
not be unreasonably withheld, except that such consent shall not be necessary
if a Lease Event of Default is continuing) remove the Loan Trustee without
cause by an instrument in writing delivered to the Owner Trustee, Lessee, the
Owner Participant and the Loan Trustee, and the Loan Trustee shall promptly
notify each Note Holder thereof in writing, such removal to be effective upon
the acceptance of the trusteeship by a successor Loan Trustee. In the case of
the resignation or removal of the Loan Trustee, a Majority in Interest of Note
Holders may appoint a successor Loan Trustee by an instrument signed by such
holders, which successor, so long as no Lease Event of Default shall have
occurred and be continuing, shall be subject to Lessee's reasonable approval.
If a successor Loan Trustee shall not have been appointed within 30 days after
such notice of resignation or removal, the Loan Trustee, the Owner Trustee, the
Owner Participant or any Note Holder may apply to any court of competent
jurisdiction to appoint a successor Loan Trustee to act until such time, if
any, as a successor shall have been appointed as above provided. The successor
Loan Trustee so appointed by such court shall immediately and without further
act be superseded by any successor Loan Trustee appointed as above provided.

(b) Any successor Loan Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Loan Trustee and the
Lessee an instrument accepting such appointment and assuming the obligations of
the Loan Trustee under the Participation Agreement arising from and after the
time of such appointment, and thereupon such successor Loan Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Loan Trustee hereunder in the trust
hereunder applicable to it with like effect as if originally named the Loan
Trustee herein; but nevertheless upon the written request of such successor
Loan
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Trustee, such predecessor Loan Trustee shall execute and deliver an instrument
transferring to such successor Loan Trustee, upon the trusts herein expressed
applicable to it, all the estates, properties, rights and powers of such
predecessor Loan Trustee, and such predecessor Loan Trustee shall duly assign,
transfer, deliver and pay over to such successor Loan Trustee all monies or
other property then held by such predecessor Loan Trustee hereunder.

(c) Any successor Loan Trustee, however appointed, shall be a
bank or trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford,
Connecticut; Wilmington, Delaware; or Boston, Massachusetts and having (or
whose obligations under the Operative Agreements are guaranteed by an
affiliated entity having) a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Loan Trustee hereunder upon reasonable
or customary terms.

(d) Any corporation into which the Loan Trustee 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 Loan Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Loan Trustee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 8.02, be a successor Loan Trustee and the Loan
Trustee under this Trust Indenture without further act.
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SECTION 8.03. Appointment of Additional and Separate Trustees

(a) Whenever (i) the Loan Trustee shall deem it necessary or
desirable in order to conform to any Law of any jurisdiction in which all or
any part of the Trust Indenture Estate shall be situated or to make any claim
or bring any suit with respect to or in connection with the Trust Indenture
Estate, this Trust Indenture, any other Indenture Agreement, the Equipment
Notes or any of the transactions contemplated by the Participation Agreement,
(ii) the Loan Trustee shall be advised by counsel satisfactory to it that it is
so necessary or prudent in the interests of the Note Holders (and the Loan
Trustee shall so advise the Owner Trustee and Lessee), or (iii) the Loan
Trustee shall have been requested to do so by a Majority in Interest of Note
Holders, then in any such case, the Loan Trustee and, upon the written request
of the Loan Trustee, the Owner Trustee, shall execute and deliver an indenture
supplemental hereto and such other instruments as may from time to time be
necessary or advisable either (1) to constitute one or more bank or trust
companies or one or more persons approved by the Loan Trustee, either to act
jointly with the Loan Trustee as additional trustee or trustees of all or any
part of the Trust Indenture Estate, or to act as separate trustee or trustees
of all or any part of the Trust Indenture Estate, in each case with such
rights, powers, duties and obligations consistent with this Trust Indenture as
may be provided in such supplemental indenture or other instruments as the Loan
Trustee or a Majority in Interest of Note Holders may deem necessary or
advisable, or (2) to clarify, add to or subtract from the rights, powers,
duties and obligations theretofore granted any such additional or separate
trustee, subject in each case to the remaining provisions of this Section 8.03.
If the Owner Trustee shall not have taken any action requested of it under this
Section 8.03(a) that is permitted or required by its terms within 15 days after
the receipt of a written request from the Loan Trustee so to do, or if an Event
of Default shall have occurred and be continuing, the Loan Trustee may act
under the foregoing provisions of this Section 8.03(a) without the concurrence
of the Owner Trustee; and the Owner Trustee hereby irrevocably appoints (which
appointment is coupled with an interest) the Loan Trustee, its agent and
attorney-in-fact to act for it under the foregoing provisions of this Section
8.03(a) in either of such contingencies. The Loan Trustee may, in such
capacity, execute, deliver and perform any such supplemental indenture, or any
such instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction
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from the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 8.03(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties
and obligations of such additional or separate trustee shall revert to the Loan
Trustee until a successor additional or separate trustee is appointed as
provided in this Section 8.03(a).

(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon the
Loan Trustee in respect of the custody, investment and payment of monies and
all monies received by any such additional or separate trustee from or
constituting part of the Trust Indenture Estate or otherwise payable under any
Operative Agreement to the Loan Trustee shall be promptly paid over by it to
the Loan Trustee. All other rights, powers, duties and obligations conferred
or imposed upon any additional or separate trustee shall be exercised or
performed by the Loan Trustee and such additional or separate trustee jointly
except to the extent that applicable Law of any jurisdiction in which any
particular act is to be performed renders the Loan Trustee incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations (including the holding of title to all or part of the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed by
such additional or separate trustee. No additional or separate trustee shall
take any discretionary action except on the instructions of the Loan Trustee or
a Majority in Interest of Note Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Loan Trustee shall be liable for the consequences of
its lack of reasonable care in selecting, and Loan Trustee's own actions in
acting with, any additional or separate trustee. Each additional or separate
trustee appointed pursuant to this Section 8.03 shall be subject to, and shall
have the benefit of Articles IV through VIII and Article X hereof insofar as
they apply to the Loan Trustee. The powers of any additional or separate
trustee appointed pursuant to this Section 8.03 shall not in any case exceed
those of the Loan Trustee hereunder.

(c) If at any time the Loan Trustee shall deem it no longer
necessary or desirable in order to conform to any such Law
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or take any such action or shall be advised by such counsel that it is no
longer so necessary or desirable in the interest of the Note Holders, or in the
event that the Loan Trustee shall have been requested to do so in writing by a
Majority in Interest of Note Holders, the Loan Trustee and, upon the written
request of the Loan Trustee, the Owner Trustee, shall execute and deliver an
indenture supplemental hereto and all other instruments and agreements
necessary or proper to remove any additional or separate trustee. The Loan
Trustee may act on behalf of the Owner Trustee under this Section 8.03(c) when
and to the extent it could so act under Section 8.03(a) hereof.
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ARTICLE IX

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS

SECTION 9.01. Instructions of Majority; Limitations

(a) Except as provided in Section 5.02 hereof, the Owner
Trustee agrees it shall not enter into any amendment of or supplement to the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement or the Engine Consent and Agreement, or execute and deliver any
written waiver or modification of, or consent under, the terms of the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement or the Engine Consent and Agreement, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by the
Loan Trustee and a Majority in Interest of Note Holders. Anything to the
contrary contained herein notwithstanding, without the necessity of the consent
of any of the Note Holders or the Loan Trustee, (i) any Excluded Payments
payable to the Owner Participant may be modified, amended, changed or waived in
such manner as shall be agreed to by the Owner Participant and Lessee and (ii)
the Owner Trustee and Lessee may enter into amendments of or additions to the
Lease to modify Section 5 (except to the extent that such amendment would
affect the rights or exercise of remedies under Section 15 of the Lease) or
Section 17 of the Lease so long as such amendments, modifications and changes
do not and would not affect the time of, or reduce the amount of, Rent payments
(except to the extent expressly permitted by Section 5.02 hereof) until after
the payment in full of all Secured Obligations or otherwise adversely affect
the Note Holders.

(b) Without limiting the provisions of Section 9.01 hereof,
the Loan Trustee agrees with the Note Holders that it shall not enter into any
amendment, waiver or modification of, supplement or consent to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement or the
Participation Agreement, or any other agreement included in the Trust Indenture
Estate, unless such supplement, amendment, waiver, modification or consent is
consented to in writing by a Majority in Interest of Note Holders, but upon the
written request of a Majority in Interest of Note Holders, the Loan
882
85

Trustee shall from time to time enter into any such supplement or amendment, or
execute and deliver any such waiver, modification or consent, as may be
specified in such request and as may be (in the case of any such amendment,
supplement or modification), to the extent such agreement is required, agreed
to by the Owner Trustee and Lessee or, as may be appropriate, the Airframe
Manufacturer or the Engine Manufacturer; provided, however, that, without the
consent of each holder of an affected Equipment Note then outstanding and of
each Liquidity Provider, no such amendment of or supplement to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement or the
Participation Agreement or waiver or modification of the terms of, or consent
under, any thereof, shall (i) modify any of the provisions of this Section
9.01, or of Article II or III or Section 4.02, 4.04(c), 4.04(d), 5.02 or 5.06
hereof, Section 13.3, 14 (except to add an Event of Default) or 16 of the
Lease, Section 16.1 of the Participation Agreement, the definitions of "Event
of Default," "Default," "Lease Event of Default," "Lease Default," "Majority in
Interest of Note Holders," "Make-Whole Amount" or "Note Holder," or the
percentage of Note Holders required to take or approve any action hereunder,
(ii) reduce the amount, or change the time of payment or method of calculation
of any amount, of Original Amount, Make-Whole Amount, if any, or interest with
respect to any Equipment Note, or alter or modify the provisions of Article III
hereof with respect to the order of priorities in which distribution thereunder
shall be made as among the Note Holders, the Owner Trustee and Lessee, (iii)
reduce, modify or amend any indemnities in favor of the Owner Trustee, the Loan
Trustee or the Note Holders (except that the Owner Trustee (in its individual
capacity) or the Loan Trustee, as the case may be, may consent to any waiver or
reduction of an indemnity payable to it), (iv) consent to any change in the
Trust Indenture or the Lease which would permit redemption of Equipment Notes
earlier than permitted under Section 2.10 or 2.11 hereof or the purchase or
exchange of the Equipment Notes other than as permitted by Section 2.13 hereof,
(v) except as contemplated by the Lease or the Participation Agreement, reduce
the amount or extend the time of payment of Basic Rent, Stipulated Loss Value,
or Termination Value for the Aircraft in each case as set forth in the Lease,
or modify, amend or supplement the Lease or consent to any assignment of the
Lease, in either case releasing Lessee from its obligations in respect of the
payment of Basic Rent, Stipulated
883
86

Loss Value or Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set forth
in Sections 3 and 16 of the Lease or (vi) permit the creation of any Lien on
the Trust Indenture Estate or any part thereof other than Permitted Liens or
deprive any Note Holder of the benefit of the Lien of this Trust Indenture on
the Trust Indenture Estate, except as provided in connection with the exercise
of remedies under Article IV hereof.

(c) At any time after the date hereof, the Owner Trustee and
the Loan Trustee may enter into one or more agreements supplemental hereto
without the consent of any Note Holder for any of the following purposes: (i)
(a) to cure any defect or inconsistency herein or in the Equipment Notes, or to
make any change not inconsistent with the provisions hereof (provided that such
change does not adversely affect the interests of any Note Holder in its
capacity solely as Note Holder) or (b) to cure any ambiguity or correct any
mistake; (ii) to evidence the succession of another party as the Owner Trustee
in accordance with the terms of the Trust Agreement or to evidence the
succession of a new trustee hereunder pursuant hereto, the removal of the
trustee hereunder or the appointment of any co-trustee or co-trustees or any
separate or additional trustee or trustees; (iii) to convey, transfer, assign,
mortgage or pledge any property to or with the Loan Trustee or to make any
other provisions with respect to matters or questions arising hereunder so long
as such action shall not adversely affect the interests of the Note Holders in
its capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Trust Indenture or
better to assure, convey and confirm unto the Loan Trustee any property subject
or required to be subject to the Lien of this Trust Indenture, the Airframe or
Engines or any Replacement Airframe or Replacement Engine; (v) to add to the
covenants of the Owner Trustee for the benefit of the Note Holders, or to
surrender any rights or power herein conferred upon the Owner Trustee, the
Owner Participant or the Lessee; (vi) to add to the rights of the Note Holders;
and (vii) to include on the Equipment Notes any legend as may be required by
Law.
884
87

SECTION 9.02. Trustees Protected

If, in the opinion of the institution acting as Owner Trustee
under the Trust Agreement or the institution acting as Loan Trustee hereunder,
any document required to be executed by it pursuant to the terms of Section
9.01 hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in
its discretion decline to execute such document.

SECTION 9.03. Documents Mailed to Note Holders

Promptly after the execution by the Owner Trustee or the Loan
Trustee of any document entered into pursuant to Section 9.01 hereof, the Loan
Trustee shall mail, by first class mail, postage prepaid, a copy thereof to
Lessee and to each Note Holder at its address last set forth in the Equipment
Note Register, but the failure of the Loan Trustee to mail such copies shall
not impair or affect the validity of such document.

SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Indenture Supplement

No written request or consent of the Loan Trustee, the Note
Holders or the Owner Participant pursuant to Section 9.01 hereof shall be
required to enable the Owner Trustee to enter into any Lease Supplement
specifically required by the terms of the Lease or to execute and deliver a
Trust Indenture Supplement specifically required by the terms hereof.
885
88

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Termination of Trust Indenture

Upon (or at any time after) payment in full of the Original
Amount of, Make-Whole Amount, if any, and interest on and all other amounts due
under all Equipment Notes and provided that there shall then be no other
Secured Obligations due to the Indenture Indemnitees, the Note Holders and the
Loan Trustee hereunder or under the Participation Agreement or other Operative
Agreement, the Owner Trustee shall direct the Loan Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing the Aircraft and the Engines from the Lien of this Trust
Indenture and releasing the Lease, the Purchase Agreement, the Purchase
Agreement Assignment with the Consent and Agreement and the Engine Consent and
Agreement attached thereto from the assignment and pledge thereof hereunder and
the Loan Trustee shall execute and deliver such instrument as aforesaid and
give written notice thereof to Lessee; provided, however, that this Trust
Indenture and the trusts created hereby shall earlier terminate and this Trust
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Loan Trustee of all property constituting part of the Trust
Indenture Estate and the final distribution by the Loan Trustee of all monies
or other property or proceeds constituting part of the Trust Indenture Estate
in accordance with the terms hereof. Except as aforesaid otherwise provided,
this Trust Indenture and the trusts created hereby shall continue in full force
and effect in accordance with the terms hereof.

SECTION 10.02. No Legal Title to Trust Indenture Estate
in Note Holders

SECTION 10.03. Sale of Aircraft by Loan Trustee Is Binding

Any sale or other conveyance of the Trust Indenture Estate, or
any part thereof (including any part thereof or interest therein), by the Loan
Trustee made pursuant to the terms of this Trust Indenture shall bind the Note
Holders and shall be effective to transfer or convey all right, title and
interest of the Loan Trustee, the Owner Trustee, the Owner Participant and such
holders in and to such Trust Indenture Estate or part thereof. No purchaser or
other grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application of
any sale or other proceeds with respect thereto by the Loan Trustee.

SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Loan Trustee, Owner Participant, Note Holders
and the Other Indenture Indemnitees

Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner Trustee, the Loan
Trustee, the Owner Participant, the Note Holders and the other Indenture
Indemnitees, any legal or equitable right, remedy or claim under or in respect
of this Trust Indenture.
887
90

SECTION 10.05. Notices

Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed
by certified mail, postage prepaid, or by facsimile or confirmed telex, and (i)
if to the Owner Trustee, addressed to it at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ with a copy to the Owner Participant addressed as provided in
clause (iii) below, (ii) if to Loan Trustee, addressed to it at its office at
▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
(iii) if to any Participant, Lessee, any Note Holder or any other Indenture
Indemnitee addressed to such party at such address as such party shall have
furnished by notice to the Owner Trustee and the Loan Trustee, or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on Schedule 1 to the Participation Agreement or in the Equipment Note
Register. Whenever any notice in writing is required to be given by the Owner
Trustee, any Participant or the Loan Trustee or any Note Holder to any of the
other of them, such notice shall be deemed given and such requirement satisfied
when such notice is received, or if such notice is mailed by certified mail,
postage prepaid, three Business Days after being mailed, addressed as provided
above. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this Trust
Indenture.

SECTION 10.06. Severability

SECTION 10.07. No Oral Modification or Continuing Waivers

No term or provision of this Trust Indenture or the Equipment
Notes may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Loan Trustee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.

SECTION 10.08. Successors and Assigns

SECTION 10.09. Headings

The headings of the various Articles and sections herein and
in the table of contents hereto are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
889
92

SECTION 10.10. Normal Commercial Relations

Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner Trustee, Loan Trustee, any Participant or any bank or
other Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee
or any Permitted Sublessee, fully to the same extent as if this Trust Indenture
were not in effect, including without limitation the making of loans or other
extensions of credit to Lessee for any purpose whatsoever, whether related to
any of the transactions contemplated hereby or otherwise.

SECTION 10.11. Governing Law; Counterpart Form

SECTION 10.12. Voting By Note Holders

All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
890
93

SECTION 10.13. Bankruptcy

It is the intention of the parties that the Owner Trustee, as
lessor under the Lease (and the Loan Trustee as assignee of the Owner Trustee
hereunder), shall be entitled to the benefits of Section 1110 with respect to
the right to take possession of the Aircraft, Airframe, Engines and Parts as
provided in the Lease in the event of a case under Chapter 11 of the Bankruptcy
Code in which Lessee is a debtor, and in any instance where more than one
construction is possible of the terms and conditions hereof or any other
pertinent Operative Agreement, each such party agrees that a construction which
would preserve such benefits shall control over any construction which would
not preserve such benefits.
891
94

* * *

FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its
individual capacity, except as
expressly provided herein, but
solely as Owner Trustee, as Owner
Trustee

By
----------------------------------
Name:
Title:

WILMINGTON TRUST COMPANY, not in
its individual capacity, except as
expressly provided herein, but
solely as Loan Trustee

By
----------------------------------
Name:
Title:
892

EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE

TRUST INDENTURE AND MORTGAGE ____ SUPPLEMENT NO. 1

This TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT NO. 1, dated
__________ __, ____ (herein called this "Trust Indenture Supplement") of FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee (herein called the "Owner Trustee") under that certain Trust
Agreement ___ dated as of _________, 199_ (the "Trust Agreement"), between the
Owner Trustee and the Owner Participant named therein.

W I T N E S S E T H:

WHEREAS, the Trust Indenture and Mortgage ___, dated as of
___________, 199_ (as amended and supplemented to the date hereof, the "Trust
Indenture") between the Owner Trustee and Wilmington Trust Company, as Loan
Trustee (the "Loan Trustee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall particularly
describe the Aircraft, and shall specifically mortgage such Aircraft to the
Loan Trustee; and

AIRFRAME

One airframe identified as follows:
893
2

FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ --------------
The Boeing
Company

together with all of the Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereinafter acquired and
which are from time to time incorporated or installed in or attached to said
airframe.

AIRCRAFT ENGINES

Two aircraft engines, each such engine having 750 or more rated take-off
horsepower or the equivalent thereof, identified as follows:

Manufacturer Manufacturer's Model Serial Number
------------ -------------------- -------------

Together with all of Owner Trustee's right, title and interest
in and to (a) all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts) and (b)
all Aircraft Documents.

grant, bargain, sell, assign, transfer, convey, mortgage, pledge and confirm,
unto the Loan Trustee, its successors and assigns, for the security and benefit
of the Loan Participants, the Note Holders and the Indenture Indemnitees, in
the trust created by the Trust Indenture, all of the right, title and interest
of the Owner Trustee in, to and under the Lease Supplement of even date
herewith covering the property described above.

Notwithstanding any provision hereof, no Excluded Payment
shall constitute security for any of the aforementioned obligations.

TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Loan Trustee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participants, the Note Holders
and the Indenture Indemnitees, except as provided in Section 2.14 and Article
III of the Trust Indenture without any preference, distinction or priority of
any one Equipment Note over any other by reason of priority of time of issue,
sale, negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and subject to the terms and
provisions set forth in the Trust Indenture.

* * *

IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
895
4

FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Owner Trustee, Owner Trustee

By
----------------------------------
Name:
Title:
896
5

SCHEDULE I

Original Amount Interest Rate
--------------- -------------

Series A . . .
Series B . . .
Series C . . .
Series D . . .

897
6

Equipment Note Amortization

SERIES A

Percentage of Original
Payment Date Amount to be Paid
------------ ----------------------

898
7

SERIES B

Percentage of Original
Payment Date Amount to be Paid
------------ ----------------------

899
8

SERIES C

Percentage of Original
Payment Date Amount to be Paid
------------ ----------------------

900
9

SERIES D

Percentage of Original
Payment Date Amount to be Paid
------------ ----------------------

901

EXHIBIT D-4 to
Note Purchase Agreement

FORM OF SPECIAL TRUST AGREEMENT

902
================================================================================

TRUST AGREEMENT ____

Dated as of ______________

Between

[_________________________]

and

FIRST SECURITY BANK, NATIONAL
ASSOCIATION

One Boeing Model _____________Aircraft
Bearing Manufacturer's Serial No. ___________

================================================================================

TRUST AGREEMENT SPECIAL
903
CONTENTS

SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2. DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3.2 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST ESTATE . . . . . . . . . . . . 4
4.1 Payments from Trust Estate Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Distribution of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.3 Method of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 5. DUTIES OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.1 Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.2 Action upon Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Limitations on Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 No Duties except as Specified; No Action except as Specified . . . . . . . . . . . . . . . 8
5.5 Satisfaction of Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.6 Fixed Investment Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 6. OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Absence of Certain Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 No Representations or Warranties as to Certain Matters . . . . . . . . . . . . . . . . . . 12
6.4 No Segregation of Monies; Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Reliance upon Certificates, Counsel and Agents . . . . . . . . . . . . . . . . . . . . . . 13
6.6 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Fees; Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.8 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT . . . . . . . . . . . . . . . . . . . 15

SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Transfer of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Actions of Owner Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

TRUST AGREEMENT SPECIAL
904

SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Resignation of Owner Trustee; Appointment of Successor . . . . . . . . . . . . . . . . . . 18
9.2 Co-Trustees and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER DOCUMENTS . . . . . . . . . . . . . 22
10.1 Supplements and Amendments and Delivery Thereof . . . . . . . . . . . . . . . . . . . . . 23
10.2 Discretion as to Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.3 Absence of Requirements as to Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.4 Distribution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.5 No Request Needed as to Lease Supplement and Trust Indenture Supplement . . . . . . . . . 24

SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.1 Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.2 Termination at Option of the Owner Participant . . . . . . . . . . . . . . . . . . . . . . 25
11.3 Owner Participant Has No Legal Title in Trust Estate . . . . . . . . . . . . . . . . . . . 26
11.4 Assignment, Sale, etc. of Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.5 Trust Agreement for Benefit of Certain Parties Only . . . . . . . . . . . . . . . . . . . 26
11.6 Citizenship of Owner Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.9 Waivers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.11 Binding Effect, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.12 Headings; References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

TRUST AGREEMENT SPECIAL
905
TRUST AGREEMENT _______

This TRUST AGREEMENT ______, dated as of ________________, between
[_________], a New York corporation ("Owner Participant"), and FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "First Security" and otherwise not in its individual capacity but
solely as trustee hereunder, "Owner Trustee").

WITNESSETH:

SECTION 1. DEFINITIONS

SECTION 2. DECLARATION OF TRUST

SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT

3.1 AUTHORIZATION

(b) subject to the terms of this Trust Agreement, exercise (i) its
rights and perform its duties under the Participation Agreement, (ii) the
rights and perform the duties of Lessor under

TRUST AGREEMENT SPECIAL
906
2

the Lease and (iii) its rights and perform its duties under the Trust Indenture
and the other Owner Trustee Agreements;

(d) purchase the Aircraft pursuant to the Purchase Agreement as
assigned to Owner Trustee pursuant to the Purchase Agreement Assignment;

(g) execute and deliver the Financing Statements referred to in
Section 5.1.2 (xxii) of the Participation Agreement, together with all other
agreements, documents and instruments referred to in Section 5 of the
Participation Agreement to which Owner Trustee is to be a party;

(i) execute and deliver Lease Supplement No. 1 covering the
Aircraft;

(j) execute and deliver a Trust Indenture Supplement covering the
Aircraft; and

TRUST AGREEMENT SPECIAL
907
3

the transactions contemplated by this Trust Agreement and the other Operative
Agreements.

3.2 CONDITIONS PRECEDENT

The rights and obligations of Owner Trustee to take the actions
required by Section 3.1 shall be subject to the following conditions precedent:

(a) Owner Trustee shall have received the notice described in
Section 5.1.1 of the Participation Agreement, when and as required thereby, or
shall have waived such notice in accordance with Section 5.1.1 of the
Participation Agreement;

SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
TRUST ESTATE

4.1 PAYMENTS FROM TRUST ESTATE ONLY

Except as provided in Section 7, all payments to be made by Owner
Trustee under this Trust Agreement shall be made only from (a) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, the Commitments (except as otherwise provided in Section 15 of the
Participation Agreement) and (b) in the case of all other payments, the income
from and proceeds of the Trust Estate to the extent that Owner Trustee shall
have received sufficient income or proceeds from the Trust Estate to make such
payments. Owner Participant agrees that it will look solely (y) in the case of
funds made available

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in accordance with Section 4 of the Participation Agreement, to the Commitments
and any income therefrom (except as otherwise provided in Section 15 of the
Participation Agreement) and (z) in the case of all other payments, to the
income from and proceeds of the Trust Estate to the extent available for
distribution to Owner Participant as provided in this Trust Agreement. Except
as provided in Section 7, Owner Participant agrees that First Security is
neither personally liable to Owner Participant for any amounts payable nor
subject to any other liability under this Trust Agreement.

4.2 DISTRIBUTION OF PAYMENTS

4.2.1 PAYMENTS TO MORTGAGEE

4.2.2 PAYMENTS TO OWNER TRUSTEE, OTHER
PARTIES

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provision as to the application thereof is contained in the Lease or any of the
other Operative Agreements shall be applied and distributed in accordance with
the terms of the Lease or such other Operative Agreement; and third, the
balance, if any, shall be paid to Owner Participant.

4.2.3 CERTAIN DISTRIBUTIONS TO OWNER
PARTICIPANT

4.2.4 EXCLUDED PAYMENTS

4.3 METHOD OF PAYMENTS

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distributed shall not have been received by Owner Trustee by 12:30 P.M., New
York City time, and which funds Owner Trustee shall not have been reasonably
able to distribute to Owner Participant on the day received) to Owner
Participant's account set forth in Schedule 1 to the Participation Agreement or
to such other account or accounts of Owner Participant as Owner Participant may
designate from time to time in writing to Owner Trustee; provided, that Owner
Trustee shall use reasonable efforts to invest overnight, in investments that
would be permitted under Section 4.5 of the Lease, all funds received by it at
or later than 12:30 P.M., New York City time, and which funds Owner Trustee
shall not have been reasonably able to distribute to Owner Participant on the
day received).

SECTION 5. DUTIES OF OWNER TRUSTEE

5.1 NOTICE OF EVENT OF DEFAULT

(b) Subject to the terms of Section 5.3, Owner Trustee shall take
such action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default, Lease
Event of Default, Indenture Default or Indenture Event of Default or other
event as Owner Trustee shall be directed in writing by Owner Participant. For
all purposes of this Trust Agreement, the Lease and the other Operative
Agreements, in the absence of Actual Knowledge of Owner Trustee, Owner Trustee
shall not be deemed to have knowledge of a

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Lease Default, Lease Event of Default, Indenture Default or Indenture Event of
Default unless notified in writing by Mortgagee, Owner Participant or Lessee.

5.2 ACTION UPON INSTRUCTIONS

5.3 LIMITATIONS ON DUTIES

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the Lease or of the Participation Agreement, to pay the reasonable compensation
of Owner Trustee for the services performed or to be performed by it pursuant
to such direction and any reasonable fees and disbursements of counsel or
agents employed by Owner Trustee in connection therewith. Owner Trustee shall
not be required to take any action under Section 5.1 or 5.2 (other than the
giving of the notices referred to therein) if Owner Trustee shall have been
advised by counsel that such action is contrary to the terms of any of the
Owner Trustee Agreements or is otherwise contrary to Law and Owner Trustee has
delivered to Owner Participant written notice of the basis for its refusal to
act.

5.4 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS
SPECIFIED

5.4.1 NO DUTIES EXCEPT AS SPECIFIED

5.4.2 NO ACTION EXCEPT AS SPECIFIED

Owner Trustee shall have no power, right or authority to, and agrees
that it will not, manage, control, use, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Estate except (a) as expressly
required by the terms of any

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of the Owner Trustee Agreements, (b) as expressly provided by the terms hereof
or (c) as expressly provided in written instructions from Owner Participant
pursuant to Section 5.1 or 5.2.

5.5 SATISFACTION OF CONDITIONS PRECEDENT

5.6 FIXED INVESTMENT TRUST

SECTION 6. OWNER TRUSTEE

6.1 ACCEPTANCE OF TRUSTS AND DUTIES

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or compensation received by First Security in connection with the transactions
contemplated by this Trust Agreement and the other Operative Agreements to
which it (in its individual capacity or as Owner Trustee) is a party, (f) for
its or Owner Trustee's failure to use ordinary care in receiving or disbursing
funds or in connection with its obligation to invest funds pursuant to Section
4.5 of the Lease or Section 4.3 hereof, (g) for any liability on the part of
Owner Trustee arising out of its negligence or willful or negligent misconduct
in connection with its obligations under Section 5.1 (other than the first
sentence thereof), 6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture.
First Security shall have no obligation to advance its individual funds for any
purpose, and Owner Trustee shall have no obligation to distribute to Owner
Participant, Lessee or any third party any amounts to be paid to Owner Trustee
until such amounts are collected by Owner Trustee.

6.2 ABSENCE OF CERTAIN DUTIES

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assessment or other governmental charge or any lien or encumbrance of any kind
owing with respect to or assessed or levied against any part of the Trust
Indenture Estate or the Trust Estate, except as provided in Section 6.3.9 of
the Participation Agreement or (iv) to inspect Lessee's books and records with
respect to the Aircraft at any time permitted pursuant to the Lease.

6.3 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN
MATTERS

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that it has all corporate power and authority to execute, deliver and perform
this Trust Agreement and that this Trust Agreement has been, and (assuming due
authorization, execution and delivery by Owner Participant of this Trust
Agreement) the other Operative Agreements to which it or Owner Trustee is a
party have been (or at the time of execution and delivery of any such
instrument by it or Owner Trustee under this Trust Agreement or pursuant to the
terms of the Participation Agreement that such an instrument will be) duly
executed and delivered by one of its officers who is or will be, as the case
may be, duly authorized to execute and deliver such instruments on behalf of
itself or Owner Trustee, as the case may be, and that this Trust Agreement
constitutes the legal, valid and binding obligation of First Security or Owner
Trustee, as the case may be, enforceable against First Security or Owner
Trustee, as the case may be, in accordance with its terms.

6.4 NO SEGREGATION OF MONIES; INTEREST

6.5 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS

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Directors or Executive Committee and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically described in this Trust Agreement, Owner Trustee may, absent
Actual Knowledge to the contrary, for all purposes rely on a certificate signed
by the Chairman of the Board, the President, any Vice President or any other
officer of Lessee, and the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of Lessee, as to such fact or matter, and such
certificate shall constitute full protection to Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon and in
accordance therewith. In the administration of trusts under this Trust
Agreement, Owner Trustee may execute any of the trusts or powers and perform
its powers and duties under this Trust Agreement directly or through agents or
attorneys and may, at the expense of the Trust Estate, consult with counsel,
accountants and other skilled persons to be selected and employed by it. Owner
Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons.

6.6 NOT ACTING IN INDIVIDUAL CAPACITY

6.7 FEES; COMPENSATION

Lessee shall pay the Transaction Expenses of Owner Trustee. Neither
Owner Participant nor the Trust Estate shall have any liability for any such
fees and expenses; provided, that the foregoing shall not limit the obligations
of Owner Participant under Sections 5.3 and 7; provided, that Owner Trustee
shall have a Lien upon the Trust Estate for any such fee not paid by Lessee

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as contemplated by Section 9.2 of the Participation Agreement and such Lien
shall entitle Owner Trustee to priority as to payment thereof over payment to
any other Person under this Trust Agreement; provided, that such Lien shall be
subject and subordinate in all events to the Lien of the Trust Indenture; and
provided, further, that Owner Trustee shall have no right to exercise, and
shall not exercise, any rights or remedies Owner Trustee may have with respect
to such Lien unless and until the Secured Obligations have been paid and
performed in full.

6.8 TAX RETURNS

SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT

Owner Participant hereby agrees, whether or not any of the
transactions contemplated hereby shall be consummated, to assume liability for,
and hereby indemnifies, protects, saves and keeps harmless, First Security and
its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any
Taxes which are not required to be indemnified by Lessee pursuant to Section
9.1 or 9.3 of the Participation Agreement and excluding any taxes payable by
First Security on or measured by any compensation

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received by First Security for its services under this Trust Agreement),
claims, actions, suits, costs, expenses or disbursements (including, without
limitation, reasonable legal fees and expenses, but excluding internal costs
and expenses such as salaries and overhead, and including, without limitation,
any liability of an owner, any strict liability and any liability without
fault) of any kind and nature whatsoever which may be imposed on, incurred by
or asserted against First Security (whether or not also indemnified against by
Lessee under the Lease or under the Participation Agreement or also indemnified
against by any other Person; provided, that Owner Participant shall be
subrogated to the rights of Owner Trustee against Lessee or any other
indemnitor) in any way relating to or arising out of this Trust Agreement or
any of the other Operative Agreements or the enforcement of any of the terms of
any thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, nonacceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of the
Aircraft (including, without limitation, latent and other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration
of the Trust Estate or the action or inaction of Owner Trustee, under this
Trust Agreement, except (a) in the case of gross negligence or willful
misconduct on the part of First Security, in its individual capacity or as
Owner Trustee, in the performance or nonperformance of its duties under this
Trust Agreement or under any of the other Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its
covenants) in Section 6.3 hereof, in Section 6.03 of the Trust Indenture, in
Section 4 of the Lease, in Section 6.3 of the Participation Agreement or
elsewhere in any of the other Operative Agreements or (c) as may result from a
breach by First Security of its covenant in the last sentence of Section 5.4.1
or (d) in the case of the failure to use ordinary care on the part of First
Security, in its individual capacity or as Owner Trustee, in the receipt or
disbursement of funds or in connection with its obligation to invest funds
pursuant to Section 4.5 of the Lease or Section 4.3 hereof or in compliance
with the provisions of the first sentence of Section 6.8 hereof or (e) any
liability on the part of Owner Trustee arising out of its negligence or willful
or negligent misconduct in connection with its obligations under Section 5.1,
6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture, or (f) those claims
arising

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under any circumstances or upon any terms where Lessee would not have been
required to indemnify First Security pursuant to Section 9.1 or 9.3 of the
Participation Agreement; provided, that before asserting its right to
indemnification, if any, pursuant to this Section 7, First Security shall first
demand its corresponding right to indemnification pursuant to Section 9 of the
Participation Agreement (but need not exhaust any or all remedies available
thereunder). The indemnities contained in this Section 7 extend to First
Security only in its individual capacity and shall not be construed as
indemnities of the Trust Indenture Estate or the Trust Estate (except to the
extent, if any, that First Security has been reimbursed by the Trust Indenture
Estate or the Trust Estate for amounts covered by the indemnities contained in
this Section 7). The indemnities contained in this Section 7 shall survive the
termination of this Trust Agreement. In addition, if necessary, First Security
shall be entitled to indemnification from the Trust Estate, subject to the Lien
of the Trust Indenture, for any liability, obligation, loss, damage, penalty,
tax, claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7 to the extent not reimbursed by Lessee, Owner
Participant or others, but without releasing any of them from their respective
agreements of reimbursement; and, to secure the same First Security shall have
a lien on the Trust Estate, subject to the lien of the Trust Indenture and
subject further to the provisions of Section 6.7, which shall be prior to any
interest therein of Owner Participant. The payor of any indemnity under this
Section 7 shall be subrogated to any right of the person indemnified in respect
of the matter as to which such indemnity was paid.

SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST

8.1 TRANSFER OF INTEREST

All provisions of Section 10 of the Participation Agreement applicable
to a transfer by the Owner Participant shall (with the same force and effect as
if set forth in full in this Section 8.1) be applicable to any assignment,
conveyance or other transfer by Owner Participant of any of its right, title or
interest in and to the Participation Agreement, the Trust Estate or this Trust
Agreement. If there is more than one Owner Participant, no assignment,
conveyance or other transfer by an Owner Participant of any of its right, title
or interest in and to this Trust Agreement or the Trust Estate shall be valid
unless

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each other Owner Participant's prior written consent (which consent may be
withheld in the sole discretion of such other Owner Participant) is given to
such assignment, conveyance or other transfer.

8.2 ACTIONS OF OWNER PARTICIPANTS

SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES

9.1 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF
SUCCESSOR

9.1.1 RESIGNATION OR REMOVAL

Owner Trustee or any successor Owner Trustee (a) shall resign if
required to do so pursuant to Section 14.3 of the Participation Agreement or
upon obtaining Actual Knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and (b) may resign at any
time without cause by giving at least 60 days' prior written notice to Owner
Participant, Mortgagee and Lessee, such resignation to be effective upon the
assumption of the trusts hereunder by the successor Owner Trustee under Section
9.1.2. In addition, Owner Participant may at any time remove Owner Trustee,
with or without cause by a notice in writing delivered to Owner Trustee,
Mortgagee and Lessee, such removal to be effective upon the assumption of the
trusts hereunder by the successor Owner Trustee under Section 9.1.2, provided,
that, in the case of a removal without cause, unless a Lease Event of Default
shall have occurred and be continuing, such removal shall be subject to the
consent of Lessee (which consent shall not be unreasonably withheld). In the
case of the resignation or removal of Owner Trustee, Owner Participant may
appoint a successor Owner Trustee by an instrument signed by Owner Participant,
with, unless a Lease Event of Default shall have occurred and be continuing,
the

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consent of Lessee (which consent shall not be unreasonably withheld). If a
successor Owner Trustee shall not have been appointed within 30 days after such
notice of resignation or removal, Owner Trustee, any Owner Participant, Lessee
or Mortgagee may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor shall
have been appointed as above provided. Any successor Owner Trustee so
appointed by such court shall immediately and without further act be superseded
by any successor Owner Trustee appointed as above provided within one year from
the date of the appointment by such court.

9.1.2 EXECUTION AND DELIVERY OF DOCUMENTS,
ETC.

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9.1.3 QUALIFICATIONS

9.1.4 MERGER, ETC.

9.2 CO-TRUSTEES AND SEPARATE TRUSTEES

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20

(iv) No trustee under this Trust Agreement shall be
personally liable by reason of any action or omission of any other
trustee under this Trust Agreement;

(v) Owner Participant, at any time, by an instrument in
writing may remove any such additional trustee. In the event that
Owner Participant shall not have joined in the

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SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER
DOCUMENTS

10.1 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF

10.1.1 SUPPLEMENTS AND AMENDMENTS

Subject to Section 7.2.2 of the Participation Agreement, this Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Owner Participant. Subject
to Section 10.2, Section 9.01 of the Trust Indenture and Section 7.6.8 of the
Participation Agreement, Owner Trustee will execute any amendment, supplement
or other modification of this Trust Agreement or of any other Owner Trustee
Agreement which it is requested in writing to execute by Owner Participant,
except that Owner Trustee shall not execute any such amendment, supplement or
other modification which, by the express provisions of any of the above
documents, requires the consent of any other party unless such consent shall
have been obtained; and provided, that, without the prior written consent of
Owner Participant, (a) no such supplement, amendment or modification shall (i)
modify any of the provisions of Section 4 or this Section 10.1, (ii) reduce,
modify or amend any indemnities in favor of Owner Participant as set forth in
Section 9 of the Participation Agreement or in the

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10.1.2 DELIVERY OF AMENDMENTS AND
SUPPLEMENTS TO CERTAIN PARTIES

10.2 DISCRETION AS TO EXECUTION OF DOCUMENTS

10.3 ABSENCE OF REQUIREMENTS AS TO FORM

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10.4 DISTRIBUTION OF DOCUMENTS

10.5 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST
INDENTURE SUPPLEMENT

SECTION 11. MISCELLANEOUS

11.1 TERMINATION OF TRUST AGREEMENT

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11.2 TERMINATION AT OPTION OF THE OWNER PARTICIPANT

11.3 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST
ESTATE

11.4 ASSIGNMENT, SALE, ETC. OF AIRCRAFT

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11.5 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES
ONLY

11.6 CITIZENSHIP OF OWNER PARTICIPANT

11.7 NOTICES

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26

11.8 SEVERABILITY

11.9 WAIVERS, ETC.

11.10 COUNTERPARTS

11.11 BINDING EFFECT, ETC.

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waiver or other instrument or action by Owner Participant shall bind its
successors and assigns.

11.12 HEADINGS; REFERENCES

11.13 GOVERNING LAW

[This space intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.

-----------------------------------------

By
---------------------------------------
Name:
Title:

FIRST SECURITY BANK, NATIONAL ASSOCIATION

By
---------------------------------------
Name:
Title:

TRUST AGREEMENT SPECIAL

EXHIBIT 4.27 NOTE PURCHASE AGREEMENT Dated as of March 21, 1997

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