NORTHWEST AIRLINES CORP, 8-K, 1996-06-06

NORTHWEST AIRLINES CORP
8-K, 1996-06-06
AIR TRANSPORTATION, SCHEDULED

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
---------------------

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of earliest event
reported May 29, 1996

NORTHWEST AIRLINES CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State of Incorporation)

95-4205287
(I.R.S. Employer Identification No.)

0-23642
(Commission File Number)

2700 Lone Oak Parkway, Eagan, Minnesota 55121
(Address of principal executive offices)

(612) 726-2111
(Registrant's telephone number)
<PAGE> 2
2

Item 7 Exhibits. The documents listed below are filed as
Exhibits with reference to the Registration Statement on Form S-3 (Registration
No. 333-2516) and the Registration Statement on Form S-3 (Registration No.
33-74772) (collectively, the "Registration Statements") of Northwest Airlines
Corporation and Northwest Airlines, Inc. The Registration Statements and the
Preliminary Prospectus Supplement, dated May 29, 1996, to the Prospectus, dated
May 3, 1996, relate to the offering of Northwest Airlines, Inc.'s Pass Through
Certificates, Series 1996-1.

4(f)(1) Form of Trust Agreement [NW 1996 B] between the Owner
Participant and First Security Bank of Utah, National
Association, Owner Trustee

4(f)(2) Form of Amended and Restated Trust Indenture and
Security Agreement [NW 1996 B] between First Security
Bank of Utah, National Association, Owner Trustee, and
State Street Bank and Trust Company, Indenture Trustee

4(f)(3) Form of Lease Agreement [NW 1996 B] between First
Security Bank of Utah, National Association, Lessor,
and Northwest Airlines, Inc., Lessee

4(f)(4) Form of First Amendment to Lease Agreement [NW 1996 B]
between First Security Bank of Utah, National
Association, Lessor, and Northwest Airlines, Inc.,
Lessee

4(f)(5) Form of Guarantee [NW 1996 B] from Northwest Airlines
Corporation

4(f)(6) Form of Participation Agreement [NW 1996 B] among Northwest
Airlines, Inc., Lessee, the Owner Participant, the Loan
Participants Named Therein, Loan Participants, First Security
Bank of Utah, National Association, Owner Trustee, and State
Street Bank and Trust Company, Indenture Trustee

4(f)(7) Form of First Amendment to Participation Agreement [NW
1996 B] among Northwest Airlines, Inc., Lessee, First
Security Bank of Utah, National Association, Owner
Trustee, State Street Bank and Trust Company, Pass
Through Trustee under each of the Pass Through Trust
Agreements, the Owner Participant, State Street Bank
and Trust Company of Connecticut, National Association,
Subordination Agent, and State Street Bank and Trust
Company, Indenture Trustee

Company, Pass Through Trustee under each of the Pass Through
Trust Agreements, the Owner Participant, State Street Bank and
Trust Company of Connecticut, National Association,
Subordination Agent, and State Street Bank and Trust Company,
Indenture Trustee

4(m)(1) Form of Trust Supplement No. 1996-1A among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(2) Form of Trust Supplement No. 1996-1B among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(3) Form of Trust Supplement No. 1996-1C among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(4) Form of Trust Supplement No. 1996-1D among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(n)(1) Form of Irrevocable Revolving Credit Agreement between
State Street Bank and Trust Company of Connecticut,
National Association, Borrower, and Westdeutsche
Landesbank Girozentrale, New York Branch, Liquidity
Provider

4(n)(2) Form of Intercreditor Agreement among State Street Bank
and Trust Company, Trustee, Westdeutsche Landesbank
Girozentrale, New York Branch, Liquidity Provider, and
State Street Bank and Trust Company of Connecticut,
National Association, Subordination Agent and Trustee

23(a)(1) Consent of Aircraft Information Services, Inc.

23(a)(2) Consent of BK Associates, Inc.

23(a)(3) Consent of Simat, Helliesen & Eichner, Inc.

23(a)(4) Consent of Bingham, Dana & Gould, LLP
<PAGE> 4
4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

NORTHWEST AIRLINES CORPORATION

Dated: June 5, 1996 By: /s/ THOMAS SCHREIER, JR.
------------------------------
Thomas Schreier, Jr.
Vice President,
Finance and
Assistant Treasurer

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5

Exhibit Exhibit Index
- ------- -------------

4(f)(1) Form of Trust Agreement [NW 1996 B] between the Owner
Participant and First Security Bank of Utah, National
Association, Owner Trustee

4(f)(3) Form of Lease Agreement [NW 1996 B] between First
Security Bank of Utah, National Association, Lessor,
and Northwest Airlines, Inc., Lessee

4(f)(4) Form of First Amendment to Lease Agreement [NW 1996 B]
between First Security Bank of Utah, National
Association, Lessor, and Northwest Airlines, Inc.,
Lessee

4(f)(5) Form of Guarantee [NW 1996 B] from Northwest Airlines
Corporation

4(f)(8) Form of Refunding Agreement [NW 1996 B] among Northwest
Airlines, Inc., Lessee, Northwest Airlines Corporation,
Guarantor, First Security Bank of Utah, National
Association, Owner Trustee, State Street Bank and Trust
Company, Pass Through Trustee under each of the Pass
Through Trust Agreements, the Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association,
Subordination Agent, and State Street Bank and Trust Company,
Indenture Trustee
<PAGE> 6
6

4(m)(1) Form of Trust Supplement No. 1996-1A among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(2) Form of Trust Supplement No. 1996-1B among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(3) Form of Trust Supplement No. 1996-1C among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

4(m)(4) Form of Trust Supplement No. 1996-1D among Northwest
Airlines Corporation, Guarantor, Northwest Airlines,
Inc., and State Street Bank and Trust Company, Trustee

23(a)(1) Consent of Aircraft Information Services, Inc.

23(a)(2) Consent of BK Associates, Inc.

23(a)(3) Consent of Simat, Helliesen & Eichner, Inc.

23(a)(4) Consent of Bingham, Dane & Gould LLP

<PAGE> 1
Exhibit 4(f)(1)

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

TRUST AGREEMENT

[NW 1996 B]

DATED AS OF APRIL 24, 1996

BETWEEN

[ ],

OWNER PARTICIPANT

AND

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,

OWNER TRUSTEE

ONE BOEING 757-251

AIRCRAFT

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

<PAGE> 2

TRUST AGREEMENT

[NW 1996 B]

This TRUST AGREEMENT [NW 1996 B] dated as of April 24, 1996 between
[ ] , a [ ] corporation (the "ORIGINAL OWNER
PARTICIPANT"), and FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a
national banking association (in its individual capacity, "FSBU") and otherwise
not in its individual capacity but solely as trustee hereunder (herein in such
capacity with its permitted successors and assigns called the "OWNER TRUSTEE");

W I T N E S S E T H:

ARTICLE I

DEFINITIONS AND TERMS

SECTION 1.01. CERTAIN DEFINITIONS. Unless the context shall otherwise
require and except as contained in this Section 1.01, the capitalized terms
used herein shall have the respective meanings assigned thereto in the Lease
(as hereinafter defined) for all purposes hereof. All definitions contained in
this Section 1.01 shall be equally applicable to both the singular and plural
forms of the terms defined. For all purposes of this Trust Agreement the
following terms shall have the following meanings:

"Excluded Payments" has the meaning ascribed to such term in the Trust
Indenture.

"Indenture Event of Default" has the meaning which the term "Event of
Default" has in the Trust Indenture.

"Lease" means that certain Lease Agreement [NW 1996 B], to be dated as of
the date hereof, and to be entered into by the Owner Trustee and Lessee
concurrently with the execution and delivery of this Trust Agreement, as said
Lease Agreement may from time to time be supplemented or amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance with,
the terms of this Trust Agreement. The term "Lease" shall also include each
Lease Supplement from time to time entered into pursuant to the terms of the
Lease.

"Lease Event of Default" has the meaning which the term "Event of Default"
has in the Lease.

"Lessee" means Northwest Airlines, Inc., a Minnesota corporation, and its
permitted successors and assigns.

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"Owner Participant" means the Original Owner Participant and each
Subsequent Owner Participant to the extent that the same shall, at the relevant
time, have an Ownership Interest.

"Ownership Interest" means, in the case of each Owner Participant, the
percentage of its undivided beneficial interest in the Trust Estate created by
this Trust Agreement, which percentage shall be 100%.

"Participation Agreement" has the meaning ascribed to such term in the
Lease.

"Replacement Airframe" has the meaning ascribed to such term in the Trust
Indenture.

"Replacement Engine" has the meaning ascribed to such term in the Trust
Indenture.

"Subsequent Owner Participant" means any Person to which the Original
Owner Participant or any transferee from the Original Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest originally held by
the Original Owner Participant in this Trust Agreement, the Trust Estate and
the Participation Agreement in accordance with, so long as the Lease is in
effect or any Secured Certificates remain outstanding, Section 8 of the
Participation Agreement.

"Trust Estate" means all estate, right, title and interest of the Owner
Trustee in and to the Aircraft, the Lease, any Lease Supplement, the Purchase
Agreement, the Purchase Agreement Assignment, the Bill of Sale and the FAA Bill
of Sale, 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 the Owner Trustee, for its
own account or in its individual capacity, the Owner Participant, the Loan
Participants or the Indenture Trustee) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee, in
its individual capacity, or to the Loan Participants or any other holder of a
Secured Certificate, or to any of their respective directors, officers,
employees, servants and agents, pursuant to Section 7 of the Participation
Agreement). Notwithstanding the foregoing, "Trust Estate" shall not include
any Excluded Payments.

"Trust Indenture Estate" has the meaning ascribed to such term in the
Trust Indenture.

"Trust Office" shall mean the principal corporate trust office of the
Owner Trustee at 79 South Main Street, Salt Lake City, Utah 84111, Attention:
Corporate Trust Department, or the principal corporate trust office of any
successor Owner Trustee.

"Trust Supplement" means a supplement to the Trust Indenture and to this
Trust Agreement in substantially the form of Exhibit A to the Trust Indenture
which shall

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particularly describe the Aircraft, and any Replacement Airframe and
Replacement Engine included in the property of the Owner Trustee covered by
this Trust Agreement.

ARTICLE II

AUTHORITY TO EXECUTE CERTAIN OPERATIVE DOCUMENTS;

DECLARATION OF TRUST

SECTION 2.01. AUTHORITY TO EXECUTE DOCUMENTS. Subject to the satisfaction
of the conditions set forth in Section 4 of the Participation Agreement, the
Owner Participant hereby authorizes and directs the Owner Trustee to execute
and deliver the Operative Documents and any other agreements, instruments or
documents to which the Owner Trustee is a party in the respective forms thereof
in which delivered from time to time by the Owner Participant to the Owner
Trustee for execution and delivery and, subject to the terms hereof, to perform
its duties and, upon instructions from the Owner Participant, exercise its
rights under said Operative Documents in accordance with the terms thereof and
to execute and deliver all such other instruments, documents or certificates
and take all such other actions in accordance with the directions of the Owner
Participant, as the Owner Participant may deem necessary or advisable in
connection with the transactions contemplated hereby, the taking of any such
action by the Owner Trustee in the presence of the Owner Participant or its
counsel to evidence, conclusively, the direction of the Owner Participant.

SECTION 2.02. DECLARATION OF TRUST. FSBU hereby declares that it will
hold the Trust Estate upon the trusts hereinafter set forth for the use and
benefit of the Owner Participant, subject, however, to the provisions of and
the Lien created by the Trust Indenture.

ARTICLE III

ACCEPTANCE AND DELIVERY OF AIRCRAFT;
ISSUANCE OF SECURED CERTIFICATES

SECTION 3.01. ACCEPTANCE OF AIRCRAFT. The Original Owner Participant
hereby authorizes and directs the Owner Trustee to, and the Owner Trustee
agrees for the benefit of the Owner Participant that it will, on the Delivery
Date, subject to due compliance with the terms of Section 3.02 hereof:

(a) purchase the Aircraft pursuant to the Participation Agreement
and the Bill of Sale;

(b) accept from Lessee the delivery of the Bill of Sale and the FAA
Bill of Sale;

(c) cause the Aircraft to be leased to Lessee under the Lease, and
in furtherance thereof execute and deliver a Lease Supplement covering
the Aircraft;

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(d) execute and deliver the Trust Supplement covering the Aircraft;

(e) issue to the Loan Participants Secured Certificates in the
amounts and otherwise as provided in Section 1(a) of the Participation
Agreement;

(f) execute and deliver the financing statements referred to in
Section 4(a)(vi) of the Participation Agreement, together with all other
agreements, documents and instruments referred to in Section 4 of the
Participation Agreement to which the Owner Trustee is a party; and

(g) effect the registration of the Aircraft in the name of the Owner
Trustee by filing or causing to be filed with the FAA: (i) the FAA Bill
of Sale; (ii) an application for registration of the Aircraft in the name
of the Owner Trustee (including without limitation an affidavit from the
Owner Trustee in compliance with the provisions of 14 C.F.R. Section
47.7(c)(2)(ii) (1979)); and (iii) the Trust Agreement.

SECTION 3.02. CONDITIONS PRECEDENT. The right and obligation of the Owner
Trustee to take the action required by Section 3.01 hereof with respect to the
Aircraft shall be subject to the following conditions precedent:

(a) the Original Owner Participant shall have made the full amount
of its Commitment set forth in Schedule II of the Participation Agreement
available to the Owner Trustee, in immediately available funds, in
accordance with Section 1 of the Participation Agreement; and

(b) the terms and conditions of Section 4 of the Participation
Agreement, insofar as they relate to the Aircraft, shall have been
complied with in a manner satisfactory to the Original Owner Participant
and the Owner Trustee.

ARTICLE IV

RECEIPT, DISTRIBUTION AND APPLICATION

OF INCOME FROM THE TRUST ESTATE

SECTION 4.01. DISTRIBUTION OF PAYMENTS. (a) Payments to Indenture
Trustee. Until the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, all Basic Rent, Supplemental Rent, insurance proceeds
and requisition or other payments of any kind included in the Trust Estate
(other than Excluded Payments) payable to the Owner Trustee shall be payable
directly to the Indenture Trustee (and if any of the same are received by the
Owner Trustee shall upon receipt be paid over to the Indenture Trustee without
deduction, set-off or adjustment of any kind) for distribution in accordance
with the provisions of Article III of the Trust Indenture.

(b) 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

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to in Section 4.01(a) hereof (other than Excluded Payments) received by the
Owner Trustee, any payments received from the Indenture Trustee other than as
specified in Section 4.01(d) hereof and any other amount received as part of
the Trust Estate and for the application or distribution of which no provision
is made herein, shall be distributed forthwith upon receipt by the Owner
Trustee in the following order of priority: first, so much of such payment as
shall be required to reimburse the Owner Trustee for any expenses not otherwise
reimbursed as to which the Owner Trustee is entitled to be so reimbursed
pursuant to the provisions hereof shall be retained by the 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 Documents shall
be applied and distributed in accordance with the terms of the Lease or such
other Operative Document; and third, the balance, if any, shall be paid to the
Owner Participant.

(c) Certain Distributions to Owner Participant. All amounts from time to
time distributable by the Indenture Trustee to the Owner Participant pursuant
to the Trust Indenture shall, if paid to the Owner Trustee, be distributed by
the Owner Trustee to the Owner Participant in accordance with the provisions of
Article III of the Trust Indenture.

(d) Excluded Payments. Any Excluded Payments received by the Owner
Trustee shall be paid by the 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.

SECTION 4.02. METHOD OF PAYMENTS. The Owner Trustee shall make
distributions or cause distributions to be made to (i) the Owner Participant
pursuant to this Article IV by transferring by wire transfer the amount to be
distributed to such account or accounts of the Owner Participant as the Owner
Participant may designate from time to time in writing to the Owner Trustee
(and the Owner Trustee shall use best efforts to cause such funds to be
transferred by wire transfer on the same day as received, but in any case not
later than the next succeeding Business Day), and (ii) the Indenture Trustee
pursuant to this Article IV by paying the amount to be distributed to the
Indenture Trustee in the manner specified in the Indenture; provided that the
Owner Trustee shall invest overnight, for the benefit of the Owner Participant,
in investments that would be permitted by Section 22 of the Lease (but only to
the extent funds are received on or prior to 1:00 P.M. (Eastern Time) and such
investments are available and, if such investments are not available to the
Owner Trustee in investments which, after consultation with the Owner
Participant, the Owner Participant shall direct) all funds not transferred by
wire transfer on the same day as they were received. Notwithstanding the
foregoing but subject always to the provisions of, and the Lien created by the
Indenture, the Owner Trustee will, if so requested by the Owner Participant by
written notice, pay in immediately available funds any and all amounts payable
by the Owner Trustee hereunder to the Owner Participant as directed by the
Owner Participant. Notwithstanding the foregoing, the Owner Trustee will, if
so requested by the Owner Participant in writing, pay any or all amounts
payable to the Owner Participant pursuant to this Article IV either (i) by
crediting such amount or amounts to an account or accounts maintained by the
Owner Participant with the Owner Trustee in its individual capacity in
immediately available funds, (ii) by payment at the Trust Office of the Owner
Trustee, in immediately available funds, or

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(iii) by mailing an official bank check or checks in such amount or amounts
payable to the Owner Participant at such address as the Owner Participant shall
have designated in writing to the Owner Trustee.

ARTICLE V

DUTIES OF THE OWNER TRUSTEE

SECTION 5.01. NOTICE OF EVENT OF DEFAULT. If the Owner Trustee shall have
knowledge of a Lease Event of Default or Indenture Event of Default (or an
event which with the passage of time or the giving of notice or both would
constitute a Lease Event of Default or an Indenture Event of Default) the Owner
Trustee shall give to the Owner Participant prompt telephonic or telecopy
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 referred to in
paragraph (c) of Section 4.02 of the Trust Indenture, such notice shall in no
event be furnished later than ten (10) days after the Owner Trustee shall first
have knowledge of such event and (ii) in the case of a misrepresentation by the
Owner Trustee which with the passage of time would constitute an Indenture
Event of Default referred to in paragraph (d) of Section 4.02 of the Trust
Indenture, such notice shall in no event be furnished later than ten (10) days
after the Owner Trustee shall first have knowledge of such event. Subject to
the terms of Section 5.03 hereof, the 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 Event of Default, Indenture
Event of Default or other event as the Owner Trustee shall be directed in
writing by the Owner Participant, provided that the Owner Trustee shall have no
duty to take any (and shall take no) action whatsoever in the absence of
written instructions from the Owner Participant. For all purposes of this
Trust Agreement, the Lease and the other Operative Documents, in the absence of
actual knowledge by an officer of FSBU in the Corporate Trust Department, the
Owner Trustee shall not be deemed to have knowledge of a Lease Event of
Default, Indenture Event of Default or other event referred to in this Section
5.01 unless notified in writing by the Indenture Trustee, the Owner Participant
or Lessee.

SECTION 5.02. ACTION UPON INSTRUCTIONS. Subject to the terms of Section
5.03 hereof, upon the written instructions at any time and from time to time of
the Owner Participant, the Owner Trustee will take or refrain from taking such
action, not inconsistent with the provisions of the Trust Indenture, as may be
specified in such instructions:

SECTION 5.03. INDEMNIFICATION. The Owner Trustee shall not be required to
take any action under Section 5.01 (other than the giving of the notices
referred to therein) or 5.02 hereof unless the Owner Trustee shall have been
indemnified by the Owner Participant, in manner and form satisfactory to the
Owner Trustee, against any liability, cost or expense (including reasonable
counsel fees and disbursements) which may be incurred in connection therewith;
and, if the Owner Participant shall have directed the Owner Trustee to

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take any such action or refrain from taking any action, the Owner Participant
agrees to furnish such indemnity as shall be required and, in addition, to the
extent not otherwise paid or payable pursuant to the provisions of the Lease or
of the Participation Agreement, to pay the reasonable compensation of the Owner
Trustee for the services performed or to be performed by it pursuant to such
direction and any fees and disbursements of counsel or agents employed by the
Owner Trustee in connection therewith. The Owner Trustee shall not be required
to take any action under Section 5.01 or 5.02 hereof if the Owner Trustee shall
reasonably determine, or shall have been advised by counsel, that such action
is contrary to the terms of any of the Operative Documents to which the Owner
Trustee is a party, or is otherwise contrary to law.

SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST AGREEMENT OR
INSTRUCTIONS. The 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 Operative Documents to which
the Owner Trustee is a party, except as expressly required by the terms of any
of the Operative Documents to which the Owner Trustee is a party, or (to the
extent not inconsistent with the provisions of the Trust Indenture) as
expressly provided by the terms hereof or in written instructions from the
Owner Participant received pursuant to the terms of Section 5.01 or 5.02, and
no implied duties or obligations shall be read into this Trust Agreement
against the Owner Trustee. FSBU 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 under Section 7.01 hereof) promptly take
such action as may be necessary to duly discharge and satisfy in full all
Lessor Liens which it is required to discharge pursuant to Section 8(h) of the
Participation Agreement and otherwise comply with the terms of said Section
binding on it. FSBU agrees to indemnify, protect, save and keep harmless the
Owner Participant from and against any loss, cost or expense (including the
legal fees and expenses) incurred by the Owner Participant, as a result of the
imposition or enforcement of any such Lessor's Lien against the Aircraft, any
interest therein or on the Trust Estate or the Trust Indenture Estate resulting
from Lessor's Liens attributable to FSBU.

Notwithstanding anything herein to the contrary, the Owner Trustee shall
not be authorized and shall have no power to "vary the investment" of the Owner
Participant within the meaning of Treasury Regulations Sections
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 4.02 hereof and
Section 22 of the Lease.

SECTION 5.05. SATISFACTION OF CONDITIONS PRECEDENT. Anything herein to
the contrary notwithstanding, the Owner Trustee shall comply with the
provisions of Section 3.01 hereof upon the satisfaction, to the satisfaction of
special counsel for the Owner Trustee, of all the applicable conditions
precedent specified in Section 3.02 hereof and in Section 4 of the
Participation Agreement.

SECTION 5.06. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS.
The Owner Trustee shall not have any power, right or authority to, and the

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Owner Trustee 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 (i) as expressly required by the terms of any of the Operative Documents
to which the Owner Trustee is a party, (ii) as expressly provided by the terms
hereof, or (iii) as expressly provided in written instructions from the Owner
Participant pursuant to Section 5.01 or 5.02 hereof.

ARTICLE VI

THE OWNER TRUSTEE

SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES. FSBU accepts the trusts
hereby created and agrees to perform the same but only upon the terms hereof
applicable to it. The Owner Trustee also agrees to receive and disburse all
monies received by it constituting part of the Trust Estate upon the terms
hereof. FSBU shall not be answerable or accountable under any circumstances,
except (a) for its own willful misconduct or gross negligence (in its
individual capacity or as trustee), (b) for performance of the terms of the
last sentence of Section 5.04 hereof, (c) for its or the Owner Trustee's
failure to use ordinary care to receive, handle or disburse funds and (d) for
liabilities that may result from the inaccuracy of any representation or
warranty of it (or from the failure by it to perform any covenant) in Section
6.03 hereof, in Section 6.03 of the Trust Indenture, in Section 4 of the Lease
or in Section 8(c), 8(d) and 8(v) of the Participation Agreement.

SECTION 6.02. ABSENCE OF CERTAIN DUTIES. Except in accordance with
written instructions furnished pursuant to Section 5.02 hereof and except as
provided in, and without limiting the generality of, Section 5.04 hereof and
the last sentence of Section 9.01(b) hereof, neither the Owner Trustee nor FSBU
shall have any duty (i) to see to any recording or filing of any Operative
Document 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 Federal
Aviation Administration or other governmental agencies, except that FSBU, in
its individual capacity, shall comply with the reporting requirements set forth
in 14 C.F.R. Section 47.45 or any successor provision and the Owner Trustee
shall, to the extent that information for that purpose is supplied by Lessee
pursuant to any of the Operative Documents, complete and timely submit (and
furnish the Owner Participant with a copy of) any and all reports relating to
the Aircraft which may from time to time be required by the Federal Aviation
Administration 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 the Owner Participant copies of all reports and other
written information which the Owner Trustee receives from Lessee pursuant to
Section 11(c) of the Lease, (iii) 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, assessed or levied against any part of the Trust
Indenture Estate or the Trust Estate, except as provided in Section 8 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.
Notwithstanding the foregoing, the Owner Trustee will furnish to the Indenture
Trustee and

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<PAGE> 10

the Owner Participant, promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Owner Trustee under the Lease or any other
Operative Document.

SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS.
NEITHER THE OWNER TRUSTEE NOR FSBU MAKES OR SHALL BE DEEMED TO HAVE MADE (A)
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE
AIRCRAFT OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH
RESPECT TO THE AIRCRAFT WHATSOEVER, except that FSBU in its individual capacity
warrants that on the Delivery Date the Owner Trustee shall have received
whatever title was conveyed to it by Lessee and that the Aircraft shall during
the Term be free of Lessor Liens attributable to it and that the Owner Trustee
shall comply with the last sentence of Section 5.04, or (b) any representation
or warranty as to the validity, legality or enforceability of this Trust
Agreement or any Operative Document to which the 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 therein as a representation by FSBU in its individual
capacity or by the Owner Trustee and except that FSBU in its individual
capacity hereby represents and warrants that this Trust Agreement has been, and
(assuming due authorization, execution and delivery by the Original Owner
Participant of this Trust Agreement) the Operative Documents to which it or the
Owner Trustee is a party have been (or at the time of execution and delivery of
any such instrument by it or the Owner Trustee hereunder 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 the Owner Trustee, as the case may be.

SECTION 6.04. NO SEGREGATION OF MONIES REQUIRED; NO INTEREST. Except as
provided in Section 22 of the Lease, monies received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law, and may be deposited under such general conditions as may be prescribed by
law, and the Owner Trustee shall not be liable for any interest thereon.

SECTION 6.05. RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS. In the
absence of bad faith on its part the Owner Trustee shall incur no liability to
anyone in acting in reliance upon 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 herein, any request,
direction, order or demand of the Owner Participant, Lessee or the Indenture
Trustee mentioned herein or in any of the Operative Documents to which the
Owner Trustee is a party shall be sufficiently evidenced by written instruments
signed by a person purporting to be the chairman of the board, the president,
any executive vice president, any senior vice president or any vice president
or a managing director and in the name of the Owner Participant or Lessee, as
the case may be.

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The Owner Trustee may accept a copy of a resolution of the Board of Directors
or Executive Committee of Lessee, certified by the secretary or any assistant
secretary of such party as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted by said Board or
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
herein, the Owner Trustee may for all purposes hereof rely on a certificate
signed by a person purporting to be the chairman of the board, the president,
any executive vice president, any senior vice president or any vice president
or a managing director of such party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.
Whenever in the administration of this Agreement the Owner Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder or under any of the other Operative
Agreements, the Owner Trustee (unless other evidence be herein or therein
specifically prescribed), absent actual knowledge of an officer of the Owner
Trustee to the contrary, may rely in good faith upon a certificate in writing,
delivered to the Owner Trustee and signed by any of the Chairman of the Board,
the President, any Vice President, the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary of Lessee, the Owner Participant, or the
Indenture Trustee and notice of such need for such proof or establishment shall
be delivered to the Owner Participant, who may advise the Owner Trustee in
respect of such matter and the Owner Trustee shall act in conformity with such
advice. In the administration of trusts hereunder, the Owner Trustee 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 Estate, consult with counsel, accountants and other skilled persons
to be selected and employed by it. The 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 and
the Owner Trustee shall not be liable for the negligence of any such agent,
attorney, counsel, accountant or other skilled person appointed by it with due
care hereunder.

SECTION 6.06. NOT ACTING IN INDIVIDUAL CAPACITY. In acting hereunder, the
Owner Trustee acts solely as trustee and not in its individual capacity except
as otherwise expressly provided herein; and, subject to the terms of the
Participation Agreement and the Trust Indenture, all persons, other than the
Owner Participant, as provided herein, having any claim against the 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 the last sentence of Section 6.01.

SECTION 6.07. FEES; COMPENSATION. Except as provided in Section 5.03 or
7.01 hereof, the Owner Trustee agrees that it shall have no right against the
Owner Participant or (subject to the provisions of the Trust Indenture) the
Trust Estate for any fee as compensation for its services hereunder.

SECTION 6.08. TAX RETURNS. The 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. The Owner

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Participant shall be responsible for causing to be prepared and filed all
income tax returns required to be filed by the Owner Participant. The Owner
Trustee, upon request, will furnish the Owner Participant with all such
information as may be reasonably required or necessary from the Owner Trustee
in connection with the preparation of such tax returns and in connection with
any other filing or audit and related litigation obligations. The Owner
Trustee shall be responsible for causing to be prepared, at the request and
expense of the Owner Participant, all income tax returns required to be filed
with respect to the trust created hereby and shall execute and file such
returns; provided, however, that the Owner Trustee shall send a completed copy
of each such return to the Owner Participant not more than 60 nor less than 30
days prior to the due date of such return; provided that the Owner Trustee
shall have timely received all necessary information to complete and deliver to
the Owner Participant such return. The Owner Participant or the Owner Trustee,
as the case may be, upon request, will furnish the Owner Trustee or the Owner
Participant, as the case may be, with all such information as may be reasonably
required from the Owner Participant or the Owner Trustee, as the case may be,
in connection with the preparation of such income tax returns.

ARTICLE VII

INDEMNIFICATION OF OWNER TRUSTEE BY OWNER PARTICIPANT

SECTION 7.01. OWNER PARTICIPANT TO INDEMNIFY OWNER TRUSTEE. The Owner
Participant hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, to assume liability for, and hereby indemnify,
protect, save and keep harmless FSBU in its individual capacity and its
successors, assigns, legal representatives, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties, taxes
(excluding any taxes payable by FSBU in its individual capacity on or measured
by any compensation received by FSBU in its individual capacity for its
services hereunder or in connection with the transactions contemplated by the
Operative Documents), claims, actions, suits, costs, expenses or disbursements
(including, without limitation, reasonable ongoing fees of the Owner Trustee,
reasonable legal fees and expenses, 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 FSBU in its individual capacity in any way relating to or arising out
of this Trust Agreement or any of the Operative Documents 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 the Owner
Trustee or FSBU in its individual capacity hereunder, except (a) in the case of
willful misconduct or gross negligence on the part of the Owner Trustee or FSBU
in its individual capacity in the performance or non-performance of its duties
hereunder or (b) those resulting from the inaccuracy of any representation or
warranty of FSBU in its individual capacity (or from the failure of FSBU in its
individual capacity to

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perform any covenant) hereunder, in Sections 4.01 and 6.03 of the Trust
Indenture or, with respect to representations or warranties of FSBU in its
individual capacity only, in Section 4 of the Lease, in Section 8(c), Section
8(d) or Section 8(v) of the Participation Agreement or in any of the other
Operative Documents or (c) as may result from a breach by FSBU in its
individual capacity of its covenants in the second sentence of Section 5.04
hereof or (d) in the case of the failure to use ordinary care on the part of
the Owner Trustee or FSBU in its individual capacity in the receiving,
handling, investing and disbursing of funds or (e) Taxes, fees, or other
charges on, based on, or measured by, any fees, commissions or compensation
received by FSBU in connection with the transactions contemplated by the Lease,
the Indenture and this Agreement or (f) Taxes excluded from indemnification
pursuant to Section 7(b)(ii) of the Participation Agreement (disregarding for
the purposes of this Section 7.01, subsection 8 of Section 7(b)(ii) of the
Participation Agreement) or (g) Expenses excluded from indemnification pursuant
to the proviso in Section 7(c) of the Participation Agreement (disregarding for
the purposes of this Section 7.01, subsections I and J with respect to Section
7(c) of the Participation Agreement) or (h) any liability on the part of the
Owner Trustee arising out of its negligence or willful or negligent misconduct
in connection with its obligations under Sections 5.01, 5.02 and 9.02 hereof or
Section 4.01(c) of the Indenture; provided that, before asserting any right to
payment or indemnification hereunder, FSBU shall first demand (but need not
exhaust or pursue any further its remedies with respect to) its corresponding
right to payment or indemnification from the Lessee pursuant to the
Participation Agreement. The indemnities contained in this Section 7.01 extend
to FSBU 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 FSBU in its individual capacity has been reimbursed by the
Trust Indenture Estate or the Trust Estate for amounts covered by the
indemnities contained in this Section 7.01). The indemnities contained in this
Section 7.01 shall survive the termination of this Trust Agreement. In
addition, if necessary, FSBU in its individual capacity shall have a lien on
the Trust Estate, subject to the Lien of the Trust Indenture, to secure the
payment of any liability, obligation, loss, damage, penalty, tax, claim,
action, suit, cost, fee, expense or disbursement indemnified against pursuant
to this Section 7.01, which shall be prior to any interest therein of the Owner
Participant. Except with respect to Transaction Costs referred to in Section
16 of the Participation Agreement, each of FSBU and the Owner Trustee (in its
individual capacity or as trustee, as the case may be) agrees that it shall
have no right against (except as provided in this Section 7.01) the Owner
Participant or (subject to the provisions of the Indenture) the Trust Indenture
Estate for any fee as compensation for its services hereunder. The payor of
any indemnity under this Article VII shall be subrogated to any right of the
person indemnified in respect of the matter as to which such indemnity was
paid.

ARTICLE VIII

TRANSFER OF THE OWNER PARTICIPANT'S INTEREST

SECTION 8.01. TRANSFER OF INTERESTS. All provisions of Section 8(n) of
the Participation Agreement shall (with the same force and effect as if set
forth in full, mutatis

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mutandis, in this Section 8.01) be applicable to any assignment, conveyance or
other transfer by any Owner Participant of its right, title or interest in and
to the Participation Agreement, the Trust Estate or this Trust Agreement.

ARTICLE IX

SUCCESSOR OWNER TRUSTEES: CO-TRUSTEES

SECTION 9.01. RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR. (a)
Resignation or Removal. The Owner Trustee or any successor Owner Trustee (i)
shall resign if required to do so pursuant to Section 8(c) of the Participation
Agreement and (ii) may resign at any time without cause by giving at least
sixty (60) days' prior written notice to the Owner Participant, the Indenture
Trustee (so long as the Lien of the Trust Indenture has not been fully
discharged) and Lessee (so long as the Lease is in effect), such resignation to
be effective upon the acceptance of appointment by the successor Owner Trustee
under Section 9.01(b) hereof. In addition, the Owner Participant may at any
time remove the Owner Trustee without cause by a notice in writing delivered to
the Owner Trustee, the Indenture Trustee (so long as the Lien of the Trust
Indenture has not been fully discharged) and Lessee (so long as the Lease is in
effect), such removal to be effective upon the acceptance of appointment by the
successor Owner Trustee under Section 9.01(b) hereof. In the case of the
resignation or removal of the Owner Trustee, the Owner Participant may appoint
a successor Owner Trustee by an instrument signed by the Owner Participant. If
a successor Owner Trustee shall not have been appointed within thirty (30) days
after such notice of resignation or removal, the Owner Trustee, the Owner
Participant, Lessee or the Indenture Trustee 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.

(b) Execution and Delivery of Documents, etc. Any successor Owner
Trustee, however appointed, shall execute and deliver to the predecessor Owner
Trustee and the Owner Participant an instrument accepting such appointment in
form and substance acceptable to the Owner Participant, 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 hereunder with like effect as if originally named the
Owner Trustee herein; 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
hereunder, 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

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successor Owner Trustee as are reasonably required to cause registration of the
Aircraft included in the Trust Estate to be transferred upon the records of the
Federal Aviation Administration, or other governmental authority having
jurisdiction, into the name of the successor Owner Trustee.

(c) Qualification. Any successor Owner Trustee, however appointed, shall
be a Citizen of the United States without making use of a voting trust, voting
powers agreement or similar arrangement 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 the Owner Trustee hereunder upon reasonable or customary terms.

(d) Merger, etc. Any corporation into which the Owner 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 Owner
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Owner Trustee may be transferred, shall,
subject to the terms of Section 9.01(c) hereof, be the Owner Trustee hereunder
without further act.

SECTION 9.02. CO-TRUSTEES AND SEPARATE TRUSTEES. 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 the Owner Trustee
being advised by counsel shall determine that it is so necessary or prudent in
the interest of the Owner Participant or the Owner Trustee, or the Owner
Trustee shall have been directed to do so by the Owner Participant, the Owner
Trustee and the 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
and all of which shall be a Citizen of the United States without making use of
a voting trust, voting powers agreement or similar arrangement) approved by the
Owner Trustee and the Owner Participant, either to act as co-trustee, jointly
with the Owner Trustee, or to act as separate trustee hereunder (any such
co-trustee or separate trustee being herein sometimes referred to as an
"ADDITIONAL TRUSTEE").

Every additional trustee hereunder shall, to the extent permitted by law,
be appointed and act, and the Owner Trustee and its successors shall act,
subject to the following provisions and conditions:

(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of
monies, the Aircraft or documents authorized to be delivered hereunder or
under the Participation Agreement shall be exercised solely by the Owner
Trustee;

(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the

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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) the 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;

(C) no power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised hereunder by
such additional trustee, except jointly with, or with the consent in
writing of, the Owner Trustee;

(D) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder;

(E) the Owner Participant, at any time, by an instrument in writing
may remove any such additional trustee; and

(F) no appointment of, or action by, any additional trustee will
relieve the Owner Trustee of any of its obligations under, or otherwise
affect any of the terms of, the Trust Indenture or affect the interests
of the Indenture Trustee or the holders of the Secured Certificates in
the Trust Indenture Estate.

ARTICLE X

SUPPLEMENTS AND AMENDMENTS

TO TRUST AGREEMENT AND OTHER DOCUMENTS

SECTION 10.01. SUPPLEMENTS AND AMENDMENTS. (a) Supplements and
Amendments. This Trust Agreement may not be amended, supplemented or otherwise
modified except by an instrument in writing signed by the Owner Trustee and the
Owner Participant. Subject to Section 10.02 hereof and the first sentence of
Section 10 of the Participation Agreement, the Owner Trustee will execute any
amendment, supplement or other modification of this Trust Agreement or of any
other Operative Document to which the Owner Trustee is a party which it is
requested to execute by the Owner Participant, except that the 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.

(b) Delivery of Amendments and Supplements to Certain Parties. A signed
copy of each amendment or supplement referred to in Section 10.01(a) hereof
shall be delivered by the Owner Trustee to the Owner Participant, Indenture
Trustee and each holder of a Secured Certificate.

SECTION 10.02. DISCRETION AS TO EXECUTION OF DOCUMENTS. Prior to
executing any document required to be executed by it pursuant to the terms of
Section 10.01 hereof, the Owner Trustee shall be entitled to receive an opinion
of its counsel to the effect

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that the execution of such document is authorized hereunder. If in the opinion
of the Owner Trustee any such document adversely affects any right, duty,
immunity or indemnity in favor of the Owner Trustee hereunder or under any
other Operative Document to which the Owner Trustee is a party, the Owner
Trustee may in its discretion decline to execute such document.

SECTION 10.03. ABSENCE OF REQUIREMENTS AS TO FORM. It shall not be
necessary for any written request furnished pursuant to Section 10.01 hereof to
specify the particular form of the proposed documents to be executed pursuant
to such Section, but it shall be sufficient if such request shall indicate the
substance thereof.

SECTION 10.04. DISTRIBUTION OF DOCUMENTS. Promptly after the execution by
the Owner Trustee of any document entered into pursuant to Section 10.01
hereof, the Owner Trustee shall mail, by certified mail, postage prepaid, a
conformed copy thereof to the Owner Participant, but the failure of the Owner
Trustee to mail such conformed copy shall not impair or affect the validity of
such document.

SECTION 10.05. NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST
SUPPLEMENT. No written request pursuant to Section 10.01 hereof shall be
required to enable the Owner Trustee to enter into the Lease Supplement
covering the Aircraft with Lessee pursuant to the terms of the Lease and
Section 3.01 hereof and the Trust Supplement pursuant to the terms of the Trust
Indenture and Section 3.01 hereof.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. 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 the Owner
Trustee of all property constituting part of the Trust Estate and the final
distribution by the Owner Trustee of all monies or other property or proceeds
constituting part of the Trust Estate in accordance with Article IV hereof,
provided that at such time Lessee shall have fully complied with all of the
terms of the Lease and the Participation Agreement or (b) twenty-one years less
one day after the death of the last survivor of all of the descendants of the
grandparents of David Rockefeller living on the date of the earliest execution
of this Trust Agreement by any party hereto; otherwise this Trust Agreement and
the trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.

SECTION 11.02. TERMINATION AT OPTION OF THE OWNER PARTICIPANT.
Notwithstanding Section 11.01 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

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of the Owner Trustee under or contemplated by the Operative Documents 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.

SECTION 11.03 DISTRIBUTION OF TRUST ESTATE UPON TERMINATION. Upon any
termination of this trust pursuant to the provisions of Section 11.01 hereof,
the Owner Trustee shall convey the Trust Estate (subject to all obligations, if
any, of the Owner Trustee then existing under the Operative Documents to which
the Owner Trustee is a party) to such purchaser or purchasers or the Owner
Participant, as the case may be, and for such amount and on such terms as shall
be specified in written instructions from the Owner Participant delivered to
the Owner Trustee prior to the date of termination; provided that in the event
such written instructions are not delivered to the Owner Trustee on or before
the date of termination, the Owner Trustee shall transfer title to the Trust
Estate to the Owner Participant. Upon making such transfer or sale accounting
for all funds which have come into its hands, the Owner Trustee shall be
entitled to receipt of any sums due and owing to the Owner Trustee for expenses
incurred pursuant hereto as set forth in Section 4.01(b) hereof.

SECTION 11.04. OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST ESTATE. The
Owner Participant shall not 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 the Owner Participant in and to the Trust Estate hereunder shall operate to
terminate this Trust Agreement or the trusts hereunder or entitle any
successors or transferees of the Owner Participant to an accounting or to the
transfer of legal title to any part of the Trust Estate.

SECTION 11.05. ASSIGNMENT, SALE, ETC. OF AIRCRAFT. Any assignment, sale,
transfer or other conveyance of its interest in the Aircraft by the Owner
Trustee made pursuant to the terms hereof or of the Lease or the Participation
Agreement shall bind the Owner Participant and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the 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 the Owner
Trustee.

SECTION 11.06. TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES ONLY.
Except for the terms of Section 8(n) of the Participation Agreement
incorporated in Article VIII hereof and except as otherwise provided in
Articles IX and X hereof, nothing herein, whether expressed or implied, shall
be construed to give any Person other than the Owner Trustee and the Owner
Participant any legal or equitable right, remedy or claim under or in respect
of this Trust Agreement; but this Trust Agreement shall be held to be for the
sole and exclusive benefit of the Owner Trustee and the Owner Participant.

SECTION 11.07. NOTICES; CONSENT TO JURISDICTION. (a) All notices,
demands, instructions and other communications required or permitted to be
given to or made upon any party hereto shall be in writing and shall be
personally delivered or sent by

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registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or sent to the intended recipient
thereof in accordance with the provisions of this Section 11.05(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 11.05(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their respective
telecopier numbers) as follows: (A) if to Lessee, the Owner Trustee, the Loan
Participants, the Indenture Trustee or the Owner Participant, to the respective
addresses set forth below the signatures of such parties on the signature page
of the Participation Agreement, or (B) if to a Subsequent Owner Participant,
addressed to such Subsequent Owner Participant at such address as such
Subsequent Owner Participant shall have furnished by notice to the parties
hereto or (C) if to any subsequent Certificate Holder, addressed to such
Certificate Holder at its address set forth in the secured certificate register
maintained pursuant to Section 2.07 of the Trust Indenture.

(b) Each of the parties hereto (A) hereby irrevocably submits itself to
the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, for the purposes of
any suit, action or other proceeding arising out of this Trust Agreement, the
Participation Agreement, the Lease, the Tax Indemnity Agreement or any other
Operative Document, the subject matter of any thereof or any of the
transactions contemplated hereby or thereby brought by any party or parties
thereto, or their successors or assigns, and (B) hereby waives, and agrees not
to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, to the extent permitted by applicable law, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper, or that the Participation Agreement,
the Lease, the Tax Indemnity Agreement or any other Operative Document or the
subject matter of any thereof or any of the transactions contemplated hereby or
thereby may not be enforced in or by such courts.

SECTION 11.08. SEVERABILITY. Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

SECTION 11.09. 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 Article X hereof; and any waiver
of the terms hereof shall be effective only in the specific instance and for
the specific purpose given.

SECTION 11.10. COUNTERPARTS. This Trust Agreement 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.

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SECTION 11.11. BINDING EFFECT, ETC. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee and its successors and assigns, and the Owner Participant, its
successors and, to the extent permitted by Article VIII hereof, its assigns.
Any request, notice, direction, consent, waiver or other instrument or action
by the Owner Participant shall bind its successors and assigns. Any Owner
Participant which shall cease to have any Ownership Interest shall thereupon
cease to be a party hereto or an Owner Participant for any reason and shall
have no further obligations hereunder.

SECTION 11.12. HEADINGS; REFERENCES. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.

SECTION 11.13. GOVERNING LAW. THIS TRUST AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

-19-

<PAGE> 21

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.

[OWNER PARTICIPANT]

By ______________________________________
Title:

FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION

By ______________________________________
Title:

-20-

<PAGE> 1
Exhibit 4(f)(2)

DRAFT 5/31/96

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

AMENDED AND RESTATED TRUST INDENTURE

AND SECURITY AGREEMENT

[NW 1996 B]

Dated as of [__________] __, 1996

Between

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

Owner Trustee

and

STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,

Indenture Trustee

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

SECURED CERTIFICATES COVERING
ONE BOEING 757-251 AIRCRAFT
BEARING U.S. REGISTRATION MARK N538US
LEASED BY NORTHWEST AIRLINES, INC.

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

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
GRANTING CLAUSE3

<S> <C> <C>
ARTICLE I DEFINITIONS..................................................... 6

SECTION 1.01. Definitions..................................................... 6
SECTION 1.02. Reference to Other Documents.................................... 11

ARTICLE II THE SECURED CERTIFICATES........................................ 11

SECTION 2.01. Form of Secured Certificates.................................... 11
SECTION 2.02. Issuance and Terms of Secured Certificates...................... 16
SECTION 2.03. Payments from Trust Indenture Estate Only....................... 16
SECTION 2.04. Method of Payment............................................... 18
SECTION 2.05. Application of Payments......................................... 19
SECTION 2.06. Termination of Interest in Trust Indenture Estate............... 20
SECTION 2.07. Registration, Transfer and Exchange of Secured Certificates..... 20
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured Certificates....... 21
SECTION 2.09. Payment of Expenses on Transfer; Cancellation................... 21
SECTION 2.10. Mandatory Redemptions of Secured Certificates................... 21
SECTION 2.11. Voluntary Redemptions of Secured Certificates................... 22
SECTION 2.12. Redemptions; Notice of Redemption............................... 22
SECTION 2.13. Assumption of Secured Certificates by Lessee.................... 22
SECTION 2.14. Option to Purchase Secured Certificates......................... 23
SECTION 2.15. Subordination................................................... 24

ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
TRUST INDENTURE ESTATE.......................................... 24

SECTION 3.01. Basic Rent Distribution......................................... 24
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination; Refinancing.. 25
SECTION 3.03. Payments After Event of Default................................. 26
SECTION 3.04. Certain Payments................................................ 27
SECTION 3.05. Other Payments.................................................. 28
SECTION 3.06. Payments to Owner Trustee....................................... 28
SECTION 3.07. Application of Payments Under Guarantee......................... 28

ARTICLE IV COVENANTS OF OWNER TRUSTEE, EVENTS OF DEFAULT, REMEDIES OF
INDENTURE TRUSTEE............................................... 29

SECTION 4.01. Covenants of Owner Trustee...................................... 29
SECTION 4.02. Event of Default................................................ 29
SECTION 4.03. Certain Rights.................................................. 31
SECTION 4.04. Remedies........................................................ 32
SECTION 4.05. Return of Aircraft, Etc......................................... 33
SECTION 4.06. Remedies Cumulative............................................. 34
SECTION 4.07. Discontinuance of Proceedings................................... 34
SECTION 4.08. Waiver of Past Defaults......................................... 35
SECTION 4.09. Appointment of Receiver......................................... 35

</TABLE>

-i-

<PAGE> 3

SECTION 4.10. Indenture Trustee Authorized to Execute Bills of Sale, Etc....... 35
SECTION 4.11. Rights of Certificate Holders to Receive Payment................. 35

ARTICLE V DUTIES OF THE INDENTURE TRUSTEE.................................. 36

SECTION 5.01. Notice of Event of Default....................................... 36
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations......... 36
SECTION 5.03. Indemnification.................................................. 38
SECTION 5.04. No Duties Except as Specified in Trust Indenture or Instructions. 38
SECTION 5.05. No Action Except Under Lease, Trust Indenture or Instructions.... 39
SECTION 5.06. Replacement Airframes and Replacement Engines.................... 39
SECTION 5.07. Indenture Supplements for Replacements........................... 42
SECTION 5.08. Effect of Replacement............................................ 42
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.................. 43

ARTICLE VI THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE...................... 43

SECTION 6.01. Acceptance of Trusts and Duties.................................. 43
SECTION 6.02. Absence of Duties................................................ 43
SECTION 6.03. No Representations or Warranties as to Aircraft or Documents..... 44
SECTION 6.04. No Segregation of Monies; No Interest............................ 44
SECTION 6.05. Reliance; Agreements; Advice of Counsel.......................... 44
SECTION 6.06. Capacity in Which Acting......................................... 45
SECTION 6.07. Compensation..................................................... 45
SECTION 6.08. Instructions from Certificate Holders............................ 45

ARTICLE VII INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE............ 45

SECTION 7.01. Scope of Indemnification......................................... 45

ARTICLE VIII SUCCESSOR AND SEPARATE TRUSTEES.................................. 46

SECTION 8.01. Notice of Successor Owner Trustee................................ 46
SECTION 8.02. Resignation of Indenture Trustee; Appointment of Successor....... 46
SECTION 8.03. Appointment of Additional and Separate Trustees.................. 47

ARTICLE IX SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE................ 48

SECTION 9.01. Instructions of Majority; Limitations............................ 48
SECTION 9.02. Trustees Protected............................................... 50
SECTION 9.03. Documents Mailed to Certificate Holders.......................... 50
SECTION 9.04. No Request Necessary for Lease Supplement or Trust Indenture
Supplement....................................................... 50

ARTICLE X MISCELLANEOUS.................................................... 50

SECTION 10.01. Termination of Trust Indenture................................... 50
SECTION 10.02. No Legal Title to Trust Indenture Estate in Certificate Holders.. 50
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding................. 51
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee, Indenture Trustee,
Owner Participant and Certificate Holders........................ 51
SECTION 10.05. Notices.......................................................... 51
SECTION 10.06. Severability..................................................... 51
SECTION 10.07. No Oral Modification or Continuing Waivers....................... 51
SECTION 10.08. Successors and Assigns........................................... 51

</TABLE>

-ii-

SECTION 10.09. Headings..................................................... 52
SECTION 10.10. Normal Commercial Relations.................................. 52
SECTION 10.11. Governing Law; Counterpart Form.............................. 52
SECTION 10.12. Voting By Certificate Holders................................ 52
SECTION 10.13. Bankruptcy................................................... 52
SECTION 10.14. No Action Contrary to Lessee's Rights Under the Lease........ 52

EXHIBIT A Form of Trust Agreement and Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
</TABLE>

-iii-

<PAGE> 5

AMENDED AND RESTATED TRUST INDENTURE
AND SECURITY AGREEMENT
[NW 1996 B]

AMENDED AND RESTATED TRUST INDENTURE AND SECURITY AGREEMENT [NW 1996 B],
dated as of [___________] __, 1996 ("TRUST INDENTURE") between FIRST SECURITY
BANK OF UTAH, 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 STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company, not in its individual
capacity, except as expressly stated herein, but solely as Indenture Trustee
hereunder (together with its successors hereunder, the "INDENTURE 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 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 Secured
Certificates issued hereunder, and (ii) the Owner Trustee has been authorized
and directed to execute and deliver this Trust Indenture;

WHEREAS, (i) the Owner Trustee and the Indenture Trustee entered into the
Trust Indenture and Security Agreement [NW 1996 B] dated as of April 24, 1996
(the "ORIGINAL INDENTURE"), (ii) the Owner Trustee entered into the Trust
Agreement and Indenture Supplement [NW 1996 B] (the "SUPPLEMENT") dated April
30, 1996 to the Original Indenture, (iii) the Original Indenture and the
Supplement were recorded by the Federal Aviation Administration on [_____] __,
1996 and were assigned Conveyance No. _______ and (iv) the Lease Agreement [NW
1996 B] dated as of even date with the Original Indenture between the Owner
Trustee and Lessee and the Lease Supplement No. 1 [NW 1996 B] were recorded by
the Federal Aviation Administration on [_____] __, 1996 and were assigned
Conveyance No. _______ and (v) pursuant to the Original Indenture, the Owner
Trustee issued and sold to the Loan Participants Secured Certificates (as
defined in the Original Indenture);

WHEREAS, the parties have agreed that subject to certain conditions,
Lessee shall have the right to cause the implementation of the Refinancing
Transaction pursuant to which, among other things, the Secured Certificates
issued to the Loan Participant pursuant to the Original Indenture shall be
redeemed and new Secured Certificates (the "REFINANCING SECURED CERTIFICATES")
shall be issued to the Pass Through Trustees (or their designee);

WHEREAS, in light of the foregoing and in anticipation of the Refinancing
Transaction, the parties desire by this Trust Indenture, among other things,
(i) to amend and restate in its entirety the Original Indenture, (ii) to
provide for the issuance by the Owner Trustee of the Refinancing Secured
Certificates and (iii) to provide for the assignment, mortgage and pledge by the
Owner Trustee to the Indenture 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 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 Indenture Trustee, for the
ratable benefit and security of the Certificate Holders, subject to Section 2.15
and Article III hereof;

<PAGE> 6

WHEREAS, all things have been done to make the Secured Certificates, when
executed by the Owner Trustee and authenticated and delivered by the Indenture
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:

-2-

<PAGE> 7

GRANTING CLAUSE

NOW, THEREFORE, THIS AMENDED AND RESTATED TRUST INDENTURE AND SECURITY
AGREEMENT WITNESSETH, that, to secure the prompt payment of the Principal
Amount of, interest on, Make-Whole Amount, if any, and all other amounts due
with respect to, all Secured Certificates from time to time outstanding
hereunder and the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions herein and in the Participation Agreement
and the Secured Certificates contained, for the benefit of the Certificate
Holders and the prompt payment of all amounts from time to time owing under the
Participation Agreement to the Certificate Holders by the Owner Trustee 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 Secured Certificates by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security and
benefit of the Certificate Holders, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to and
under the following described property, rights and privileges, other than
Excluded Payments (which collectively, excluding Excluded Payments but
including all property hereafter specifically subjected to the Lien of this
Trust Indenture by the Trust Agreement and Indenture Supplement or any mortgage
supplemental hereto, are included within the Trust Indenture Estate), to wit:

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

(2) the Lease and any Lease Supplement and all Rent thereunder (including,
without limitation, all amounts of Interim Rent, Basic Rent, Supplemental Rent
and payments of any kind thereunder (excluding any Excluded Payments)), and the
Guarantee;

(3) the Purchase Agreement (to the extent specified in the Purchase
Agreement Assignment), the Purchase Agreement Assignment, the Consent and
Agreement and the Bill of Sale;

(4) all rents, issues, profits, revenues and other income of the property
subjected or required to be subjected to the Lien of this Indenture;

(5) all insurance and requisition proceeds with respect to the Aircraft,
including but not limited to the insurance required under Section 11 of the
Lease, but excluding insurance proceeds described in clauses (ii) and (iii) of
the definition of Excluded Payments;

-3-

<PAGE> 8

(6) all rights of the Owner Trustee to amounts paid or payable by Lessee
to the Owner Trustee under the Participation Agreement and all rights of the
Owner Trustee to enforce payments of any such amounts thereunder, but excluding
amounts described in clauses (i) and (v) of the definition of Excluded
Payments;

(7) all monies and securities from time to time deposited or required to
be deposited with the Indenture Trustee pursuant to any terms of this Indenture
or the Lease or required hereby or by the Lease to be held by the Indenture
Trustee hereunder (other than Excluded Payments); and

(8) all proceeds of the foregoing.

BUT EXCLUDING from the foregoing and from the Trust Indenture Estate all
Excluded Payments, and the right to enforce and collect the same, and SUBJECT
TO all of the terms and conditions of this Trust Indenture and the rights of
the Owner Trustee and the Owner Participant hereunder.

Concurrently with the delivery of the Original Indenture, the Owner
Trustee delivered to the Indenture 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, and
the Purchase Agreement Assignment with the Consent and Agreement attached
thereto.

TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, and its successors and assigns, in trust for the benefit and
security of the Certificate Holders, except as provided in Section 2.15 and
Article III hereof without any preference, distinction or priority of any one
Secured Certificate 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 each of the
Indenture Agreements to which it is a party 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 Indenture
Trustee and the Certificate Holders shall have no obligation or liability under
the Indenture Agreements, by reason of or arising out of the assignment
hereunder, nor shall the Indenture Trustee or the Certificate Holders be
required or obligated in any manner to perform or fulfill any obligations of
the Owner Trustee under or pursuant to any of the Indenture Agreements to which
it is a party, 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 Indenture 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 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 Indenture 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 hereunder, during the
continuance of any Event of Default under this Trust Indenture, the Indenture
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

-4-

<PAGE> 9

and upon such purchase to execute and deliver in the name of and on
behalf of the Owner Trustee an appropriate bill of sale and other instruments
of transfer relating to the Airframe and Engines, when purchased by such
purchaser, and to perform all other necessary or appropriate acts with respect
to any such purchase, and in its discretion to file any claim or take any other
action or proceedings, either in its own name or in the name of the Owner
Trustee or otherwise, which the Indenture Trustee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Indenture Trustee in and to such Rents and other sums and the security intended
to be afforded hereby; provided, however, that no action of the Indenture
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 Documents. 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 Indenture Trustee
at such address or addresses as the Indenture 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 Indenture Trustee any
and all monies from time to time received by it constituting part of the Trust
Indenture Estate, for distribution by the Indenture Trustee 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 Indenture
Trustee under this Trust Indenture.

The Owner Trustee agrees that at any time and from time to time, upon the
written request of the Indenture 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 Indenture 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 Indenture Trustee the full benefits of the assignment
hereunder and of the rights and powers herein granted. The parties hereto
acknowledge that neither the Owner Trustee nor the Owner Participant shall have
any obligation as to any recording, filing, refiling or re-recording of any
documents or instruments in regard to maintaining the perfection of the
security interests created hereunder, in the Trust Indenture Estate or any
security interest that may be claimed to have been created by the Lease or the
ownership interest of the Owner Trustee in the Aircraft.

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
Indenture Trustee and its predecessor(s) in this transaction, 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 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 (other than those relating to an Excluded Payment) 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 Indenture Trustee:

(a) collect or agree to the receipt or collection of
any payment of Rent (other than Excluded Payments), including
Interim Rent, 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 Indenture Trustee hereunder) any payment of
Rent, including Interim Rent, 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

-5-

<PAGE> 10

(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 Indenture 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 Indenture 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 of the other Owner Trustee Documents.

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

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

ARTICLE I

DEFINITIONS

SECTION 1.01. DEFINITIONS. For all purposes of this Indenture the
following terms shall have the following meanings (such definitions to be
equally applicable to both the singular and plural forms of the terms defined):

"Actual Knowledge" shall mean, (i) as it applies to the Owner Trustee or
Indenture Trustee, as the case may be, actual knowledge of a Responsible
Officer in the Trust Office of the Owner Trustee or in the Corporate Trust
Office of the Indenture Trustee, as the case may be, and (ii) as it applies to
the Owner Participant, actual knowledge of a vice president or other higher
officer of the Owner Participant having responsibility for the transactions
contemplated by the Operative Documents.

"Amortization Amount" shall mean, with respect to any Principal Amount
Repayment Date, the amount set forth opposite such Date on the Amortization
Schedule.

"Amortization Schedule" shall mean the amortization schedule for the
Secured Certificates delivered pursuant to Section 2.02 hereof.

"Average Life Date" for each Secured Certificate to be redeemed shall be
the date which follows the redemption date by a period equal to the Remaining
Weighted Average Life at the redemption date of such Secured Certificate.
"REMAINING WEIGHTED AVERAGE LIFE" of such Secured Certificate, at the
redemption date of such Secured Certificate, shall be the number of days equal
to the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Secured Certificate, by
(ii) the number of days from and including the redemption date to but excluding
the scheduled payment date of such principal installment; by (b) the then
unpaid principal amount of such Secured Certificate.

"Cash Equivalents" shall mean the investments specified in Section 22(a)
of the Lease.

-6-

<PAGE> 11

"Certificate Holder" shall mean any holder from time to time of one or
more Secured Certificates.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Continuous Stay Period" shall have the meaning specified in Section
4.04(a) hereof.

"Corporate Trust Department" or "Trust Office" means the principal
corporate trust office of the Owner Trustee located at 79 South Main Street,
Salt Lake City, Utah 84111, Attention: Corporate Trust Department, or such
other office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in writing
to Lessee, the Indenture Trustee, the Owner Participant and each Certificate
Holder.

"Corporate Trust Office" shall mean the principal office of the Indenture
Trustee located at Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department, or such other office at which the
Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to Lessee, the
Owner Trustee and each Certificate Holder.

"Debt" shall mean any liability for borrowed money, or any liability for
the payment of money in connection with any letter of credit transaction, or
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments or for the deferred purchase price of property, goods
or services.

"Debt Rate" shall mean, with respect to any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to
the Trust Indenture.

"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 or Lease Event of
Default.

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

"Enforcement Date" shall have meaning specified in Section 4.03 hereof.

"Event of Default" shall have the meaning specified in Section 4.02
hereof.

"Excess Amount" shall have the meaning specified in Section 2.03(b)
hereof.

"Excluded Payments" shall mean (i) indemnity payments paid or payable by
Lessee to or in respect of the Owner Participant or the Owner Trustee in its
individual capacity, their respective Affiliates, successors and permitted
assigns and their directors, officers, employees, servants and agents
(collectively, the "OWNER INDEMNITEES") pursuant to Sections 7(b), 7(c), 16 and
17 of the Participation Agreement, (ii) proceeds of public liability insurance
in respect of the Aircraft payable as a result of insurance claims made, or
losses suffered, by the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by any of the Owner Indemnitees, (iii)
proceeds of insurance maintained with respect to the Aircraft by the Owner
Participant (whether directly or through the Owner Trustee) or any other Owner
Indemnitee and permitted under Section 11(e) of the Lease, (iv) all payments
required to be made under the Tax Indemnity Agreement by Lessee and all
payments of Supplemental Rent by Lessee in respect of any amounts payable under
the Tax Indemnity Agreement, (v) fees payable to the Owner Trustee or the
Indenture Trustee pursuant to the last sentence of Section 7(c) of the
Participation Agreement, (vi) provided that the Secured Certificates shall have
been duly assumed by Lessee pursuant to Section 2.13 hereof, the amounts
payable to the Owner Trustee pursuant to the third sentence of Section 19(d) of
the Lease plus all reasonable expenses incurred by the Owner Trustee and the
Owner Participant in connection with such assumption, as applicable, (vii) any
payment of the foregoing under the Guarantee, (viii) interest accrued on any of
the above, and (ix) any right to enforce the payment of any amount described in
clauses (i) through (viii) above and the right to declare an Event of Default
in respect of any of the foregoing amounts.

-7-

<PAGE> 12

"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.

"Guarantor " shall have the meaning specified in the Lease.

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

"Indenture Trustee Event" means either (i) the Secured Certificates shall
have become due and payable pursuant to Section 4.04(b) of the Trust Indenture
or (ii) the Indenture Trustee 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 under the Trust
Indenture or the Lease.

"Law" shall mean (a) any constitution, treaty, statute, law, 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" shall mean that certain Lease Agreement [NW 1996 B], dated as of
April 24, 1996, entered into by the Owner Trustee and Lessee concurrently with
the execution and delivery of the Original Trust Indenture, as said Lease
Agreement has been, or may from time to time be, supplemented or amended, or
the terms thereof waived or modified, to the extent permitted by, and in
accordance with, the terms of this Indenture. The term "Lease" shall also
include each Lease Supplement from time to time entered into pursuant to the
terms of the Lease.

"Lease Default" shall mean any event or condition that with the giving of
notice or the lapse of time or both would become a Lease Event of Default.

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

"Lessee" shall mean Northwest Airlines, Inc., a Minnesota corporation.

"Lessee Operative Documents" means the Participation Agreement, the Lease,
Lease Supplement No. 1, the Tax Indemnity Agreement, 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.

"Majority in Interest of Certificate Holders" as of a particular date of
determination shall mean the holders of more than a majority in aggregate
unpaid Principal Amount of all Secured Certificates outstanding as of such date
(excluding any Secured Certificates held by the Owner Trustee or the Owner
Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 hereof (unless all Secured Certificates
then outstanding shall be held by the Owner Trustee or the Owner Participant)
or Lessee or any affiliate of any thereof).

"Make-Whole Amount" means, with respect to any Secured Certificate, the
amount (as determined by an independent investment banker selected by Lessee
and reasonably acceptable to the Indenture Trustee and the Owner Participant)
by which (a) the present value of the remaining scheduled payments of principal
and interest from the redemption date to maturity of such Secured Certificate
computed by discounting each such payment on a semiannual basis from its
respective Payment Date (assuming a 360-day year of twelve 30-day months) using
a discount rate equal to the Treasury Yield exceeds (b) the outstanding
principal amount of such Secured Certificate

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<PAGE> 13

plus accrued interest. For purposes of determining the Make-Whole Amount,
"TREASURY YIELD" at the time of determination with respect to any Secured
Certificate means the interest rate (expressed as a semiannual equivalent and 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 semiannual
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Secured Certificate and trading in the public securities
market 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 Secured Certificate and (B)
the other maturing as close as possible to, but later than, the Average Life
Date of such Secured Certificate, 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 Secured Certificate 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
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
redemption date.

"Mortgaged Property" shall have the meaning specified in Section 3.03
hereof.

"Owner Indemnitee" shall have the meaning specified in the definition of
Excluded Payments herein.

"Owner Participant" shall mean [________________________], a [__________]
corporation, so long as such party shall have any interest in the Trust Estate,
and transferees thereof as permitted by Section 8 of the Participation
Agreement.

"PA Amendment No. 1" shall mean the First Amendment to Participation
Agreement [NW 1996 B], dated as of the Refinancing Date, among Lessee, the
Owner Trustee, the Pass Through Trustee, the Owner Participant, the
Subordination Agent and State Street Bank and Trust Company, in its individual
capacity and as Indenture Trustee.

"Participants" shall mean and include the Loan Participants and the Owner
Participant.

"Participation Agreement" shall mean that certain Participation Agreement
[NW 1996 B], dated as of April 24, 1996, among the Owner Trustee, the Indenture
Trustee, Lessee and the Participants, as amended by the PA Amendment No. 1, as
the same may from time to time be supplemented or further amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance with,
the terms thereof.

"Past Due Rate" shall mean, with respect to the Secured Certificates, the
rate per annum equal to 2% over the Debt Rate as in effect from time to time.

"Payment Date" shall mean each January 2 and July 2, commencing on January
2, 1997 (or, if any such day is not a Business Day, the immediately succeeding
Business Day) until the Secured Certificates have been paid in full.

"Principal Amount" with respect to a Secured Certificate means the stated
original principal amount of such Secured Certificate and, with respect to all
Secured Certificates, means the aggregate stated original principal amounts of
all Secured Certificates.

"Principal Amount Repayment Date" shall mean each Payment Date on which
any portion of the Principal Amount is due and payable in accordance with the
Amortization Schedule.

"QIB" shall have the meaning specified in Section 2.08 hereof.

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<PAGE> 14

"Replacement Airframe" shall mean any airframe substituted for the
Airframe pursuant to Section 5.06 hereof.

"Replacement Engine" shall mean any engine substituted for an Engine
pursuant to Section 5.06 hereof.

"Responsible Officer" means with respect to the Owner Trustee, a
responsible officer in the Trust Office of the Owner Trustee (including,
without limitation, any authorized officer in the Trust Office of the Owner
Trustee), and with respect to the Indenture Trustee, a responsible officer in
the Corporate Trust Office of the Indenture Trustee.

"Section 1110 Period" shall have the meaning specified in Section 4.04(a)
hereof.

"Secured Certificates" shall mean and include any Secured Certificates
issued hereunder, and issued in exchange therefor or replacement thereof.

"Secured Obligations" shall have the meaning specified in Section 2.06
hereof.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Senior Holder" shall have the meaning specified in Section 2.15(c)
hereof.

"Series A" or "Series A Secured Certificates" means Secured Certificates
issued and designated as "Series A" hereunder, in the Principal 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 Secured Certificates" means Secured Certificates
issued and designated as "Series B" hereunder, in the Principal 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 Secured Certificates" means Secured Certificates
issued and designated as "Series C" hereunder, in the Principal Amount and
maturities and bearing interest as specified in Schedule I to the Trust
Indenture under the heading "Series C."

"State Street" means State Street Bank and Trust Company, a Massachusetts
trust company, not in its capacity as Indenture Trustee under the Trust
Indenture, but in its individual capacity.

"Transactions" means the transactions contemplated by the Participation
Agreement and the other Operative Documents.

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

"Trust Indenture", "this Trust Indenture", "the Trust Indenture",
"Indenture", "this Indenture", and "the Indenture" shall mean this Amended and
Restated Trust Indenture and Security Agreement [NW 1996 B] as it may from time
to time be supplemented or amended as herein provided, including supplementing
by the Trust Agreement and Indenture Supplement pursuant hereto.

"Trust Indenture Estate" shall mean all estate, right, title and interest
of the Indenture Trustee in and to the properties referred to in the Granting
Clause of this Trust Indenture, excluding Excluded Payments.

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<PAGE> 15

SECTION 1.02. REFERENCE TO OTHER DOCUMENTS. For all purposes of this
Trust Indenture the terms used but not defined herein are used as defined in
the Lease.

ARTICLE II

THE SECURED CERTIFICATES

SECTION 2.01. FORM OF SECURED CERTIFICATES

The Secured Certificates shall be substantially in the form set forth
below:

THIS SECURED CERTIFICATE 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 SECURED CERTIFICATE 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 OF UTAH, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER TRUST
AGREEMENT [NW 1996 B] DATED AS OF APRIL 24, 1996.

SERIES [___] NON-RECOURSE SECURED CERTIFICATE DUE [___] ISSUED IN CONNECTION
WITH THE BOEING MODEL 757-251 AIRCRAFT BEARING UNITED STATES REGISTRATION
NUMBER N538US.

No.____ Date: [______,__]
$__________________

INTEREST RATE MATURITY DATE

_____________________ ________________________
[________] [________,_______]

FIRST SECURITY BANK OF UTAH, 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 [NW 1996 B], dated as of April 24,
1996, between the Owner Participant named therein and the Owner Trustee (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 "PRINCIPAL
AMOUNT"), together with interest on the amount of the Principal 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 Interest Rate indicated above. The Principal
Amount of this Secured Certificate shall be payable in installments on the
dates set forth in Schedule I hereto equal to the corresponding percentage of
the Principal Amount of this Secured Certificate set forth in Schedule I
hereto. Accrued but unpaid interest shall be due and payable in semi-annual
installments commencing January 2, 1997, and thereafter on July 2 and January 2
of each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Secured Certificate shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued and
unpaid interest on, and any other amounts due under, this Secured Certificate.
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Secured Certificate 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.

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<PAGE> 16

For purposes hereof, the term "TRUST INDENTURE" means the Amended and
Restated Trust Indenture and Security Agreement [NW 1996 B], dated as of the
Refinancing Date, between the Owner Trustee and State Street Bank and Trust
Company (the "INDENTURE TRUSTEE"), as the same may be amended or supplemented
from time to time. All other capitalized terms used in this Secured
Certificate and not defined herein shall have the respective meanings assigned
in the Trust Indenture.

This Secured Certificate shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal 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).

All payments of Principal 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 Indenture 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 Secured Certificate,
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 or
the Indenture 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 Secured Certificate 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 Indenture Trustee, subject always to the terms and provisions of the
Trust Indenture, to accelerate the maturity of this Secured Certificate 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 Secured Certificate 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 a Secured Certificate Register for the purpose
of registering transfers and exchanges of Secured Certificates at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor in the
manner provided in Section 2.07 of the Trust Indenture.

The Principal Amount and interest and other amounts due hereunder shall be
payable in Dollars in immediately available funds at the Corporate Trust Office
of the Indenture Trustee, 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 Secured Certificate, except that in the case
of any final payment with respect to this Secured Certificate, the Secured
Certificate shall be surrendered promptly thereafter by the Indenture Trustee
to the Owner Trustee for cancellation.

The holder hereof, by its acceptance of this Secured Certificate, agrees
that, except as provided in the Trust Indenture, each payment received by it
hereunder shall be applied, first, to the payment of accrued interest on this
Secured Certificate (as well as any interest on any overdue Principal 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 Principal Amount of this Secured Certificate 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 Principal Amount of this Secured
Certificate remaining unpaid in the inverse order of their normal maturity.

This Secured Certificate is one of the Secured Certificates 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

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<PAGE> 17

Indenture Estate is held by the Indenture Trustee as security, in part, for
the Secured Certificates. The provisions of this Secured Certificate are
subject to the Trust Indenture. Reference is hereby made to the Trust Indenture
and the Participation Agreement for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Secured Certificate and the rights and obligations of the holders of, and
the nature and extent of the security for, any other Secured Certificates
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 and the Participation
Agreement each holder hereof agrees by its acceptance of this Secured
Certificate.

As provided in the Trust Indenture and subject to certain limitations
therein set forth, this Secured Certificate is exchangeable for a like
aggregate Principal Amount of Secured Certificates of different authorized
denominations, as requested by the holder surrendering the same.

Prior to due presentment for registration of transfer of this Secured
Certificate, the Owner Trustee and the Indenture Trustee shall treat the person
in whose name this Secured Certificate is registered as the owner hereof for
all purposes whether or not this Secured Certificate be overdue, and neither of
the Owner Trustee nor the Indenture Trustee shall be affected by notice to the
contrary.

This Secured Certificate is subject to redemption as provided in Sections
2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This Secured
Certificate is also subject to assumption by Lessee as provided in Section 2.13
of the Trust Indenture, to exchange and to purchase by the Owner Participant or
the Owner Trustee as provided in Section 2.14 of the Trust Indenture but not
otherwise.

The indebtedness evidenced by this Secured Certificate 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 Secured Certificates]1,
[Series A and Series B Secured Certificates]2 and this Secured Certificate is
issued subject to such provisions. The Certificate Holder of this Secured
Certificate, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Indenture 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 Indenture
Trustee his attorney-in-fact for such purpose.**

Unless the certificate of authentication hereon has been executed by or on
behalf of the Indenture Trustee by manual signature, this Secured Certificate
shall not be entitled to any benefit under the Trust Indenture or be valid or
obligatory for any purpose.

THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

* * *

- -----------------
1 To be inserted in the case of a Series B Secured Certificate.
2 To be inserted in the case of a Series C Secured Certificate.
** To be inserted for each Secured Certificate other than any Series A Secured
Certificate.

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<PAGE> 18

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

FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION,

not in its individual capacity but
solely as
Owner Trustee

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

INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee

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

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<PAGE> 19

SCHEDULE I

SECURED CERTIFICATES AMORTIZATION

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

[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]

* * *
SECTION 2.02. ISSUANCE AND TERMS OF SECURED CERTIFICATES.

The Secured Certificates 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
Refinancing Transaction, (i) each Refinancing Secured Certificate shall be
issued to the Pass Through Trustees (or their designee) under the Pass Through
Agreements as set forth in Schedule II hereto in connection therewith and (ii)
the Secured Certificates issued under the Original Indenture shall be
concurrently redeemed. The Secured Certificates shall be issued in registered
form only. The Secured Certificates shall be issued in denominations of $1,000
and integral multiples thereof, except that one Secured Certificate of each
Series may be in an amount that is not an integral multiple of $1,000.

Each Secured Certificate 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 Principal Amount thereof from time to time outstanding, payable in
arrears on January 2, 1997, and on each July 2 and January 2 thereafter until
maturity. The Principal Amount of each Secured Certificate shall be payable on
the dates and in the installments equal to the corresponding percentage of the
Principal Amount as set forth in Schedule I hereto which shall be attached as
Schedule I to the Secured Certificates. Notwithstanding the foregoing, the
final payment made under each Secured Certificate shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued and
unpaid interest on, and any other amounts due under, such Secured Certificate.
Each Secured Certificate shall bear interest at the Past Due Rate (calculated
on the basis of a year of 360 days comprised of twelve 30-day months) on any
part of the Principal 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 Secured Certificate 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 Indenture Trustee for distribution
in accordance with Section 3.04 hereof (a) any and all indemnity amounts
received by the Owner Trustee which are payable by Lessee to (i) the Indenture
Trustee in its individual capacity, (ii) the Certificate Holders, (iii) the
Subordination Agent, (iv) the Liquidity Provider, or (v) the Pass Through
Trustees, in each case pursuant to Section 7 of the Participation Agreement,
(b) the Owner Trustee's pro rata share of all amounts owed to the Liquidity
Provider by the Subordination Agent under each Liquidity Facility other than
amounts due as (i) repayments of the principal of advances thereunder, and (ii)
interest on Interest Drawings and Final Drawings except to the extent included
in Net

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<PAGE> 20

Interest and Related Charges, and (c) any and all amounts received by
the Owner Trustee which are payable by Lessee under clause (c) or (d) of the
definition of Supplemental Rent. As used in this Section, the Owner Trustee's
pro rata share means as of any time:

(A) with respect to all amounts other than Net Interest and Related
Charges, a fraction the numerator of which is the aggregate principal
balance then outstanding of the Secured Certificates and the denominator
of which is the aggregate principal balance of all Equipment Notes, plus

(B) with respect to all Net Interest and Related Charges (x) if
there exists a Payment Default under any Secured Certificate a fraction,
the numerator of which is the aggregate principal balance then
outstanding of Secured Certificates and the denominator of which is the
aggregate principal balance then outstanding of all Equipment Notes
issued under Indentures under which there exists a Payment Default or (y)
at all other times, zero;

provided, however, neither the numerator nor the denominator of the fractions
in paragraphs (A) or (B) shall include any Series D Secured Certificates or
Series D Equipment Notes. As used in this Section, "Net Interest and Related
Charges" means the sum of (i) the amount, if any, by which interest payable to
the Liquidity Provider on any Interest Drawing and/or Final Drawing exceeds the
amount which would be payable if such drawings bore interest at the weighted
average Past Due Rate (as defined in the applicable Indentures) applicable to
amounts in default on all Equipment Notes plus (ii) any amounts payable under
Section 3.1, Section 3.2, Section 3.3 or Section 7.7 of each Liquidity Facility
(or similar provisions of any succeeding Liquidity Facility) which result from
any Interest Drawing or Final Drawing. As used in this Section, a Payment
Default when used in connection with a Secured Certificate or Equipment Note
means a default in the payment of principal thereof or interest thereon which
has not been cured other than solely because of acceleration. The following
terms are used as defined in the Intercreditor Agreement: Equipment Notes,
Final Drawing, Indentures, Interest Drawing and Series D Equipment Notes.

The Secured Certificates 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. Secured Certificates
bearing the signatures of individuals who were at any time the proper officers
of the Owner Trustee shall bind the Owner Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Secured Certificates or did not hold such
offices at the respective dates of such Secured Certificates. The Owner
Trustee may from time to time execute and deliver Secured Certificates with
respect to the Aircraft to the Indenture Trustee for authentication upon
original issue and such Secured Certificates shall thereupon be authenticated
and delivered by the Indenture 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 Principal Amount of all Secured
Certificates to be authenticated hereunder on original issue with respect to
the Aircraft. No Secured Certificate shall be secured by or entitled to any
benefit under this Trust Indenture or be valid or obligatory
for any purposes, unless there appears on such Secured Certificate a
certificate of authentication in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized officers and
such certificate upon any Secured Certificates shall be conclusive evidence,
and the only evidence, that such Secured Certificate has been duly
authenticated and delivered hereunder.

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 Certificate Holders under this
Trust Indenture, each Certificate Holder, by its acceptance of a Secured
Certificate, agrees that as between it and the Owner Trustee, except as
expressly provided in this Trust Indenture, the Participation Agreement or any
other Operative Document, (i) the obligation to make all payments of the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Secured Certificates, 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
Documents, shall be payable only from the income and proceeds from the Trust
Estate to the extent

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<PAGE> 21

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 Indenture 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 Indenture 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, or other
obligation owed, hereunder, under the Participation Agreement or any of the
other Operative Documents or under the Secured Certificates except as expressly
provided herein 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 Estate. These
provisions are not intended as any release or discharge of the indebtedness
represented by the Secured Certificates and the Trust Indenture, but are
intended only as a covenant not to sue the Owner Participant, the Owner Trustee
or the Indenture Trustee in their individual capacities, except as expressly
provided herein or in the Participation Agreement, for a deficiency with respect
to such indebtedness, the indebtedness represented by this Trust Indenture and
the Secured Certificates to remain in full force and effect as fully as though
these provisions were not contained in this Trust Indenture. The Owner Trustee
hereby acknowledges that the Certificate Holders have expressly reserved all
their rights and remedies against the Trust Indenture Estate, including the
right, in the event of a default in the payment of all or part of the Principal
Amount of, interest on, Make-Whole Amount, if any, or any other amount due
with respect to any Secured Certificate within the periods provided for in
Section 4.02(b) hereof, or upon the occurrence and continuation of any other
Event of Default under this Trust Indenture, to foreclose upon this Trust
Indenture, and/or to receive the proceeds from the Trust Indenture Estate and
otherwise to enforce any other right under this Trust Indenture. Nothing in
this Section 2.03(a) shall (x) release the Owner Participant from personal
liability, or constitute a covenant not to sue the Owner Participant, for any
breach by it of any of its covenants, representations or warranties contained in
the Participation Agreement or for any of the payments it has agreed to make
pursuant to the Participation Agreement or (y) release the Owner Trustee or
constitute a covenant not to sue the Owner Trustee for any breach by it of any
representations, warranties or covenants of the Owner Trustee contained in the
Operative Documents or (z) release the Owner Trustee in its individual capacity
from personal liability, or constitute a covenant not to sue the Owner Trustee
in its individual capacity for any breach by it of any representations,
warranties or covenants of the Owner Trustee made in its individual capacity in
the Operative Documents.

(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 Certificate
Holder or the Indenture Trustee, directly or indirectly (other than the
recourse liability of the Owner Trustee (in its individual capacity), to make
payment on account of any amount payable as principal, Make-Whole Amount, if
any, interest or other amounts on the Secured Certificates or under this
Indenture and (iii) any Certificate Holder or the Indenture 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 Certificate Holder or the Indenture
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
Certificate Holder or the Indenture Trustee if the Owner Trustee (in its
individual capacity) or the Owner Participant had not become subject to the
recourse liability

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<PAGE> 22

referred to in clause (ii) above. Nothing contained in this
Section 2.03(b) shall prevent a Certificate Holder or the Indenture 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 2.14 or 4.03
hereof.

SECTION 2.04. METHOD OF PAYMENT.

(a) The Principal Amount of, interest on, Make-Whole Amount, if any, and
other amounts due under each Secured Certificate 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 Indenture Trustee at
the Corporate Trust Office for distribution among the Certificate Holders in the
manner provided herein. The Owner Trustee shall not have any responsibility for
the distribution of such payment to any Certificate Holder. Notwithstanding the
foregoing or any provision in any Secured Certificate to the contrary, the
Indenture Trustee will use reasonable efforts to pay or cause to be paid, if so
directed in writing by any Certificate Holder (with a copy to the Owner
Trustee), all amounts paid by the Owner Trustee hereunder and under such
holder's Secured Certificate or Secured Certificates 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 Indenture Trustee shall fail to make any such payment as provided in the
immediately preceding sentence after its receipt of funds at the place and prior
to the time specified above, the Indenture 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 Indenture 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
Secured Certificate, except that, in the case of the final payment in respect of
any Secured Certificate, such Secured Certificate shall be surrendered to the
Indenture Trustee for cancellation promptly after such payment. Notwithstanding
any other provision of this Trust Indenture to the contrary, the Indenture
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
Indenture 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 Secured Certificate, the Owner Trustee and the
Indenture Trustee shall deem and treat the Person in whose name any Secured
Certificate is registered on the Secured Certificate Register as the absolute
owner and holder of such Secured Certificate for the purpose of receiving
payment of all amounts payable with respect to such Secured Certificate and for
all other purposes, and none of the Owner Trustee or the Indenture 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 Certificate
Holder, all payments to it shall be made to the account of such Certificate
Holder specified in Schedule I thereto and otherwise in the manner provided in
or pursuant to the Participation Agreement (or, upon consummation of the
Refinancing Transaction, the Refunding Agreement) unless it shall have specified
some other account or manner of payment by notice to the Indenture Trustee
consistent with this Section 2.04.

(b) The Indenture Trustee, as agent for the Owner Trustee, shall exclude
and withhold at the appropriate rate from each payment of Principal Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or
under each Secured Certificate (and such exclusion and withholding shall
constitute payment in respect of such Secured Certificate) any and all United
States withholding taxes applicable thereto as required by Law. The Indenture
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 Secured Certificates, to withhold such amounts (and such
withholding shall constitute payment in respect of such Secured Certificate)
and timely pay the same to the appropriate authority in the name of and on
behalf of the Certificate 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 Certificate
Holder (with a copy to the Owner Trustee and Lessee) appropriate receipts
showing

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<PAGE> 23

the payment thereof, together with such additional documentary evidence
as any such Certificate Holder may reasonably request from time to time.

If a Certificate Holder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed 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 Secured Certificate(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 Indenture Trustee of the
withdrawal or inaccuracy of such form prior to the date of such payment (and
the Indenture Trustee has no reason to know that any information set forth in
such form is inaccurate), the Indenture Trustee shall withhold only the amount,
if any, required by Law (after taking into account any applicable exemptions
claimed by the Certificate Holder) to be withheld from payments hereunder or
under the Secured Certificates held by such holder in respect of United States
federal income tax (and such withholding shall constitute payment in respect of
such Secured Certificate). If a Certificate Holder (x) which is a Non-U.S.
Person has furnished to the Indenture Trustee a properly completed 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 avoid withholding of United
States federal income tax), during the calendar year in which the payment is
made (but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or form
prior to the date of such payment (and the Indenture Trustee has no reason to
know that any information set forth in such form is inaccurate) or (y) which is
a U.S. Person has furnished to the Indenture Trustee a properly completed and
currently effective U.S. Internal Revenue Service Form W-9, if applicable,
prior to a payment hereunder or under the Secured Certificates held by such
holder, no amount shall be withheld from payments in respect of United States
federal income tax. If any Certificate Holder has notified the Indenture
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 are at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Secured Certificates held by such holder, the Indenture
Trustee agrees to withhold from each payment due to the relevant Certificate
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 applicable law.

SECTION 2.05. APPLICATION OF PAYMENTS.

In the case of each Secured Certificate, each payment of Principal Amount,
Make-Whole Amount, if any, and interest or other amounts due thereon shall be
applied:

First: to the payment of accrued interest on such Secured
Certificate (as well as any interest on any overdue Principal 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 Principal Amount of such Secured
Certificate (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 Secured Certificate; and

Fourth: the balance, if any, remaining thereafter, to the payment of
the Principal Amount of such Secured Certificate remaining unpaid
(provided that such Secured Certificate shall not be subject to
redemption except as provided in Sections 2.10, 2.11 and 2.12 hereof).

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<PAGE> 24

The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.

SECTION 2.06. TERMINATION OF INTEREST IN TRUST INDENTURE ESTATE.

A Certificate Holder shall not, as such, have any further interest in, or
other right with respect to, the Trust Indenture Estate when and if the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Secured Certificates held by such Certificate Holder and
all other sums then payable to such Certificate Holder hereunder and under the
other Operative Documents by the Owner Trustee (collectively, the "SECURED
OBLIGATIONS") shall have been paid in full.

SECTION 2.07. REGISTRATION, TRANSFER AND EXCHANGE OF SECURED CERTIFICATES.

The Indenture Trustee shall keep a register (the "SECURED CERTIFICATE
REGISTER") in which the Indenture Trustee shall provide for the registration of
Secured Certificates and the registration of transfers of Secured Certificates.
No such transfer shall be given effect unless and until registration hereunder
shall have occurred. The Secured Certificate Register shall be kept at the
Corporate Trust Office of the Indenture Trustee. The Indenture Trustee is
hereby appointed "Secured Certificate Registrar" for the purpose of registering
Secured Certificates and transfers of Secured Certificates as herein provided.
A holder of any Secured Certificate intending to exchange such Secured
Certificate shall surrender such Secured Certificate to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Secured Certificate,
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
Secured Certificate, the Owner Trustee shall execute, and the Indenture Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Secured Certificates of a like aggregate Principal
Amount and of the same series. At the option of the Certificate Holder,
Secured Certificates may be exchanged for other Secured Certificates of any
authorized denominations of a like aggregate Principal Amount, upon surrender
of the Secured Certificates to be exchanged to the Indenture Trustee at the
Corporate Trust Office. Whenever any Secured Certificates are so surrendered
for exchange, the Owner Trustee shall execute, and the Indenture Trustee shall
authenticate and deliver, the Secured Certificates which the Certificate Holder
making the exchange is entitled to receive. All Secured Certificates issued
upon any registration of transfer or exchange of Secured Certificates (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 Secured Certificates surrendered upon such
registration of transfer or exchange. Every Secured Certificate presented or
surrendered for registration of transfer, shall (if so required by the Indenture
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Indenture Trustee duly executed by the Certificate
Holder or such holder's attorney duly authorized in writing, and the Indenture
Trustee 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 Indenture Trustee shall make a notation on each new Secured
Certificate of the amount of all payments of Principal Amount previously made on
the old Secured Certificate or Secured Certificates with respect to which such
new Secured Certificate is issued and the date to which interest on such old
Secured Certificate or Secured Certificates has been paid. Interest shall be
deemed to have been paid on such new Secured Certificate to the date on which
interest shall have been paid on such old Secured Certificate, and all payments
of the Principal Amount marked on such new Secured Certificate, as provided
above, shall be deemed to have been made thereon. The Owner Trustee shall not
be required to exchange any surrendered Secured Certificates as provided above
during the ten-day period preceding the due date of any payment on such Secured
Certificate. The Owner Trustee shall in all cases deem the Person in whose name
any Secured Certificate shall have been issued and registered as the absolute
owner and holder of such Secured Certificate for the purpose of receiving
payment of all amounts payable by the Owner Trustee with respect to such Secured
Certificate and for all purposes until a notice stating otherwise is received
from the Indenture Trustee and such change is reflected on the Secured
Certificate Register. The Indenture Trustee will promptly notify the Owner
Trustee, the Owner Participant and Lessee of each registration of a transfer of
a Secured Certificate. Any such transferee of a Secured Certificate, by its
acceptance of a Secured Certificate, agrees to the provisions of the
Participation Agreement applicable to Certificate Holders, including Sections 6,
8(c), 8(e), 8(j), 8(k), 8(k), 8(l), 8(q)(A), 8(r), 8(t), 8(ff), 13(b), 13(c),
15(b), 15(c) and 16, and

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<PAGE> 25

shall be deemed to have represented and warranted (except as provided
above), and covenanted, to the parties to the Participation Agreement as to the
matters represented, warranted and covenanted by the original Loan Participant
in the Participation Agreement. Subject to compliance by the Certificate Holder
and its transferee (if any) of the requirements set forth in this Section 2.07,
the Indenture Trustee and the Owner Trustee shall use all reasonable efforts to
issue new Secured Certificates upon transfer or exchange within 10 Business Days
of the date a Secured Certificate is surrendered for transfer or exchange.

SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN SECURED CERTIFICATES.

If any Secured Certificate shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Secured Certificate, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Secured Certificate, payable in the same
Principal Amount dated the same date and captioned as issued in connection with
the Aircraft. If the Secured Certificate being replaced has become mutilated,
such Secured Certificate shall be surrendered to the Indenture Trustee and a
photocopy thereof shall be furnished to the Owner Trustee. If the Secured
Certificate being replaced has been destroyed, lost or stolen, the holder of
such Secured Certificate shall furnish to the Owner Trustee, the Owner
Participant and the Indenture Trustee such security or indemnity as may be
required by them to save the Owner Trustee, the Owner Participant and the
Indenture Trustee harmless and evidence satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee of the destruction, loss or theft
of such Secured Certificate and of the ownership thereof. If a
"qualified institutional buyer" of the type referred to in paragraph
(a)(l)(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 Secured Certificate, 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, the Owner
Participant, the Owner Trustee and the Indenture 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 Secured
Certificate. Subject to compliance by the Certificate Holder of the
requirements set forth in this Section 2.08, the Indenture Trustee and the Owner
Trustee shall use all reasonable efforts to issue new Secured Certificates
within 10 Business Days of the date of the written request therefor from the
Certificate Holder.

SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.

(a) No service charge shall be made to a Certificate Holder for any
registration of transfer or exchange of Secured Certificates, but the Indenture
Trustee, as Secured Certificate 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 Secured
Certificates; provided, however, that neither the Owner Trustee nor the Owner
Participant shall bear costs of registration, transfer or exchange in
connection with the consummation of the Refinancing Transaction.

(b) The Indenture Trustee shall cancel all Secured Certificates
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Secured Certificates.

SECTION 2.10. MANDATORY REDEMPTIONS OF SECURED CERTIFICATES.

(a) On the date on which Lessee is required pursuant to Section 10(a)(i)
of the Lease to make payment for an Event of Loss with respect to the Aircraft,
all of the Secured Certificates shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Principal Amount thereof, together with all
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement to the Certificate
Holders but without Make-Whole Amount.

(b) If the Lease is terminated with respect to the Aircraft by Lessee
pursuant to Section 9 or Section 19(d) thereof and Lessee shall not have
assumed all of the obligations of the Owner Trustee hereunder pursuant to
Section 2.13 and to Section 8(x) of the Participation Agreement, on the date
the Lease is so terminated all the Secured Certificates shall be redeemed in
whole at a redemption price equal to 100% of the unpaid Principal

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<PAGE> 26

Amount thereof, together with accrued interest thereon to the date of
redemption and all other amounts payable hereunder or under the Participation
Agreement to the Certificate Holders plus Make-Whole Amount, if any.

SECTION 2.11. VOLUNTARY REDEMPTIONS OF SECURED CERTIFICATES.

Any or all of the Secured Certificates may be redeemed by the Owner
Trustee in connection with a transaction described in, and subject to the terms
and conditions of, Section 17 of the Participation Agreement upon at least 30
days' revocable prior written notice to the Indenture Trustee and the
Certificate Holders, and the Secured Certificates shall, as provided in Section
17 of the Participation Agreement, be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement to the Certificate Holders plus
Make-Whole Amount, if any.

SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION.

(a) Neither any redemption of any Secured Certificate nor any purchase by
the Owner Trustee of any Secured Certificate may be made except to the extent
and in the manner expressly permitted by this Trust Indenture. No purchase of
any Secured Certificate may be made by the Indenture Trustee.

(b) Notice of redemption or purchase with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed or purchased, at such Certificate Holder's address
appearing in the Secured Certificate 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 Secured
Certificates and the Indenture Trustee receives written notice of such
revocation from 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 Secured Certificate, and that, if any such Secured
Certificates are then outstanding, interest on such Secured Certificates shall
cease to accrue on and after such redemption date, and (4) the place or places
where such Secured Certificates 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 Secured Certificates 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 Indenture Trustee by 12:00 noon on
the redemption date in immediately available funds the redemption price of the
Secured Certificates 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
Secured Certificates to be redeemed or purchased shall, on the redemption date,
become due and payable at the Corporate Trust Office of the Indenture 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 Secured Certificates then outstanding
shall cease to bear interest. Upon surrender of any such Secured Certificate
for redemption or purchase in accordance with said notice, such Secured
Certificate shall be redeemed at the redemption price. If any Secured
Certificate 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 Secured Certificate as of such redemption date.

SECTION 2.13. ASSUMPTION OF SECURED CERTIFICATES BY LESSEE.

If, in accordance with Section 8(x) of the Participation Agreement, and
subject to the provisions of Section 8(o) thereof, Lessee shall assume (on a
full recourse basis) all of the obligations of the Owner Trustee

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hereunder, under the Secured Certificates and all other Operative Documents
by supplemental indenture satisfactory to the Indenture Trustee (which shall
contain (i) the provisions substantially similar to Sections 6, 7, 8, 10, 11 and
12 of the Lease and (ii) other provisions necessary or advisable to effectuate
such assumption), then upon delivery of such supplemental indenture, payment by
Lessee of all expenses (including reasonable fees and expenses of counsel) for
the Owner Trustee and the Owner Participant, delivery by the Guarantor of a
guarantee of the Secured Certificates and other amounts owing to the Certificate
Holders substantially in the form of the Guarantee, and delivery of an opinion
of counsel for Lessee that such assumption has been duly and validly effected,
the Owner Trustee shall be released and discharged from any further obligations
hereunder and under the Secured Certificates and all other Operative Documents
and the Owner Participant shall be released and discharged from any further
obligations under the Participation Agreement and any other Operative Document
to which it is a party, except with respect to any such obligations that accrued
prior thereto.

SECTION 2.14. OPTION TO PURCHASE SECURED CERTIFICATES.

Either the Owner Trustee or the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.14, purchase all but not less than all of the Secured Certificates
outstanding hereunder, and each Certificate 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 as to its title to the Secured
Certificates and except against Liens on such Secured Certificates arising by,
through or under such holder), all of the right, title and interest of such
Certificate Holder in and to the Trust Indenture Estate, this Trust Indenture
and the Secured Certificates 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 Secured Certificates may be exercised by the
Owner Trustee or the Owner Participant upon any of the following events, and,
in any such event, the purchase price thereof shall equal for each Secured
Certificate the aggregate unpaid Principal Amount thereof, plus
accrued and unpaid interest thereon to the date of purchase and all other
amounts (other than the Make-Whole Amount, except as provided in the next
sentence) then payable hereunder or under the Participation Agreement to the
holder thereof. Such option to purchase the Secured Certificates may be
exercised: (i) upon an Indenture Trustee Event or (ii) in the event there
shall have occurred and be continuing a Lease Event of Default, provided that
if such option is exercised pursuant to this clause (ii) 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 Secured Certificates may be exercised by the
Owner Trustee or the Owner Participant giving written notice of its election of
such option to the Indenture Trustee, which notice shall specify a date for
such purchase not more than 30 days or less than 15 days after the date of such
notice. The Indenture 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
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 Secured Certificates shall become
irrevocable upon the sixteenth day preceding the date specified in the written
notice described in the first sentence of this paragraph.

If the Owner Trustee or the Owner Participant on or before the date of
such purchase shall so request, the Certificate Holders will comply with all
the provisions of Section 2.07 to enable new Secured Certificates 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 Secured Certificate shall be borne by the Owner
Participant.

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SECTION 2.15. SUBORDINATION.

(a) The Owner Trustee and, by acceptance of its Secured Certificates of
any Series, each Certificate 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 Certificate 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 Secured Certificates of any Series (other
than Series A), each Certificate Holder of such Series agrees that in the event
that such Certificate Holder, in its capacity as a Certificate 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 2.15 or
Article III hereof, it will hold any amount so received in trust for the Senior
Holder (as defined in Section 2.15(c) hereof) and will forthwith turn over such
payment to the Indenture Trustee in the form received to be applied as provided
in Article III hereof.

(c) As used in this Section 2.15, the term "SENIOR HOLDER" shall mean, (i)
the Certificate Holders of Series A until the Secured Obligations in respect of
Series A Secured Certificates have been paid in full and (ii) after the Secured
Obligations in respect of Series A Secured Certificates have been paid in full,
the Certificate Holders of Series B until the Secured Obligations in respect of
Series B Secured Certificates 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 or Interim Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Indenture 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 payment as shall be required to pay
in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any
interest on any overdue Principal Amount and, to the extent
permitted by applicable law, on any overdue interest and any other
overdue amounts) then due under all Series A Secured Certificates
shall be distributed to the Certificate 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 Secured Certificate bears to the aggregate amount of the
payments then due under all Series A Secured Certificates;

(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
Principal Amount and interest and other amounts (as well as any
interest on any overdue Principal Amount and, to the extent
permitted by applicable law, on any overdue interest and any other
overdue amounts) then due under all Series B Secured Certificates
shall be distributed to the Certificate 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 Secured Certificate bears to the aggregate amount of the
payments then due under all Series B Secured Certificates; and

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(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 Principal Amount and
interest and other amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by applicable law, on
any overdue interest and any other overdue amounts) then due under
all Series C Secured Certificates shall be distributed to the
Certificate 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 Secured Certificate bears
to the aggregate amount of the payments then due under all Series C
Secured Certificates; 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 Indenture 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" without reference to this proviso, (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" without reference to this proviso.

SECTION 3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION;
REFINANCING.

Except as otherwise provided in Section 3.03 hereof, any payments received
by the Indenture Trustee (i) with respect to the Aircraft as the result of an
Event of Loss, (ii) pursuant to a voluntary termination of the Lease pursuant
to Section 9 or 19(d) thereof, or (iii) in connection with a refinancing of the
Secured Certificates pursuant to Section 17 of the Participation Agreement
shall be applied to redemption of the Secured Certificates and to all other
amounts payable hereunder or to the Indenture Trustee or any Certificate Holder
under the Participation Agreement by applying such funds in the following order
of priority:

FIRST, (a) to reimburse the Indenture Trustee and the Certificate 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 Documents and then (b)
to pay any other amounts then due to the Indenture Trustee and
the Certificate Holders under this Trust Indenture, the
Participation Agreement or the Secured Certificates;

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 Secured Certificates;

(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 Secured Certificates;
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 Secured Certificates; and

THIRD, as provided in clause "Fourth" of Section 3.03 hereof;

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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 Indenture Trustee shall be held by the Indenture
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 Documents and, unless
otherwise applied pursuant to the Lease, such proceeds (and such investment
earnings) shall be released to Lessee at 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 Indenture Trustee (including any amounts
realized by the Indenture Trustee from the exercise of any remedies pursuant to
Section 15 of the Lease or Article IV hereof) after both an Event of Default
shall have occurred and be continuing and the Secured Certificates shall have
become due and payable pursuant to Section 4.04(b) hereof, as well as all
payments or amounts then held by the Indenture Trustee as part of the Trust
Indenture Estate, shall be promptly distributed by the Indenture Trustee in the
following order of priority:

FIRST, so much of such payments or amounts as shall be required to reimburse
the Indenture Trustee 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 Indenture Trustee
(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 Indenture Trustee or the Certificate Holders in
the protection, exercise or enforcement of any right, power or remedy
or any damages sustained by the Indenture Trustee or any Certificate
Holder, liquidated or otherwise, upon such Event of Default shall be
applied by the Indenture Trustee as between itself and the Certificate
Holders in reimbursement of such expenses and any other expenses for
which the Indenture Trustee or the Certificate Holders are entitled to
reimbursement under any Operative Document and in the case the
aggregate amount to be so distributed is insufficient to pay as
aforesaid, 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
Certificate 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
Certificate 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
Certificate Holder pursuant to said Section 5.03 hereof;

THIRD, (i) so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series A
Secured Certificates, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Secured Certificates to the date of distribution, shall be
distributed to the Certificate 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 Principal Amount of
all Series A Secured Certificates held by each holder plus the accrued
but unpaid interest and other amounts due hereunder or thereunder to
the date of distribution, bears to the aggregate unpaid Principal
Amount of all Series A Secured

<PAGE> 31
Certificates held by all such holders plus
the accrued but unpaid interest and other amounts due thereon 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 Principal Amount of all Series
B Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in
respect of the Series B Secured Certificates to the date of
distribution, shall be distributed to the Certificate 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 Principal Amount of all
Series B Secured Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder
or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Secured Certificates held
by all such holders plus the accrued but unpaid interest and other
amounts due thereon 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 Principal Amount of all Series C
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in
respect of the Series C Secured Certificates to the date of
distribution, shall be distributed to the Certificate 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 Principal Amount of all Series C Secured
Certificates held by each holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder to the date
of distribution, bears to the aggregate unpaid Principal Amount of
all Series C Secured Certificates held by all such holders plus
the accrued but unpaid interest and other amounts due thereon 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 Secured Certificates
as a consequence of the acceleration of the Secured Certificates

SECTION 3.04. CERTAIN PAYMENTS.

(a) Any payments received by the Indenture 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 Document shall be applied forthwith to the purpose for which such
payment was made in accordance with the terms of the Lease, the Participation
Agreement or such other Operative Document, as the case may be.

(b) The Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or Lessee in respect of
(i) the Indenture Trustee in its individual capacity, (ii) any Certificate
Holder, (iii) the Subordination Agent, (iv) the Liquidity Provider, and (v) the
Pass Through Trustees, in each case whether pursuant to Section 7 of the
Participation Agreement or as Supplemental Rent, directly to the Person
entitled thereto. Any payment received by the Indenture Trustee under clause
(b) of 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, and any payment received by the
Indenture Trustee under clause (c) of the third paragraph of Section 2.02 shall
be distributed directly to the Persons entitled thereto.

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

(e) Notwithstanding any provision of this Trust Indenture to the contrary,
any amounts held by the Indenture Trustee that would, but for the provisions of
Section 3.03 hereof, otherwise be distributed to Lessee shall, notwithstanding
the provisions of said Section, be distributed to Lessee unless and until a
Lease Event of Default shall have occurred and be continuing.

SECTION 3.05. OTHER PAYMENTS.

Any payments received by the Indenture 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 Document shall be
distributed by the Indenture Trustee to the extent received or realized at any
time (i) prior to the payment in full of all Secured Obligations due the
Certificate 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 due the Certificate Holders, 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 Documents or for which 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 Indenture 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 Certificate Holders, shall be
distributed by the Indenture Trustee 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 Indenture 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
Indenture 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
Indenture Trustee from time to time. The Owner Trustee hereby notifies the
Indenture Trustee that unless and until the Indenture 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 hereof shall be
distributed by wire transfer of funds of the type received by the Indenture
Trustee to the Owner Participant's account (within the time limits contemplated
by Section 2.04(a)) specified in Schedule I to the Participation Agreement.

SECTION 3.07 APPLICATION OF PAYMENTS UNDER GUARANTEE.

All payments received by the Indenture Trustee pursuant to the Guarantee
shall be distributed forthwith by the Indenture Trustee in the same order of
priority, and in the same manner, as it would have distributed the payment in
respect of which such payment under the Guarantee was received.

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ARTICLE IV

COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE 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:

(a) the Owner Trustee will duly and punctually pay the Principal
Amount of, Make-Whole Amount, if any, and interest on and other amounts
due under the Secured Certificates and hereunder in accordance with the
terms of the Secured Certificates and this Trust Indenture and all
amounts, if any, payable by it to the Certificate Holders under the
Participation Agreement;

(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 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 Indenture Trustee, each Certificate Holder, Lessee and the
Owner Participant;

(d) the Owner Trustee will furnish to the Indenture 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(a) and 11(c) of the Lease to the extent
that the same shall not have been furnished to the Indenture Trustee
pursuant to the Lease;

(e) except pursuant to the Operative Documents or with the consent
of the Indenture Trustee (acting pursuant to instructions given in
accordance with Section 9.01 hereof), the Owner Trustee will not contract
for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect
of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the Debt
of any other person; and

(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Operative Documents.

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):

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<PAGE> 34

(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 Indenture
Trustee that such failure shall constitute an Event of Default); or

(b) the failure of the Owner Trustee to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Secured Certificate or hereunder (other
than any such failure arising by virtue of a tax withheld pursuant to
Section 2.04(b) hereof or 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 Principal 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 Indenture Trustee or any
Certificate Holder; or

(c) any Lien required to be discharged by the Owner Trustee, in its
trust capacity pursuant to Section 8(h) of the Participation Agreement,
or by the Owner Participant pursuant to Section 8(h) of the Participation
Agreement shall remain undischarged for a period of 30 days after the
Owner Trustee and the Owner Participant shall have received written
notice from the Indenture Trustee or any Certificate Holder of such Lien;
or

(d) any representation or warranty made by the Owner Participant or
the Owner Trustee (but not in any manner relating to its individual
capacity) herein, in the Participation Agreement (or, upon consummation
of the Refinancing Transaction, the Refunding Agreement) or in any
certificate furnished by the Owner Participant or the Owner Trustee to
the Indenture Trustee or any Certificate Holder in connection with the
transactions contemplated by the Operative Documents shall prove to have
been false or incorrect when made in any material respect and continues
to be material; 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
representations made in Section 8(c) of the Participation Agreement as to
the citizenship of the Owner Participant as soon as is reasonably
practicable but in any event within 60 days) following notice thereof
from the Indenture Trustee or any Certificate 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 Indenture Trustee or the Certificate
Holders contained in the Participation Agreement, the Secured
Certificates 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, 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

(g) at any time either (i) the commencement of an involuntary case
or other proceeding in respect of the Owner Participant, the Owner
Trustee 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

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Trustee 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 90 consecutive days; or (ii) the commencement by the Owner
Participant, the Owner Trustee 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 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 or the Trust Estate or for all or
substantially all of its property, or the making by the Owner Participant,
the Owner Trustee 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 Indenture Trustee shall give the Certificate Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of Default
of which the Indenture Trustee has Actual Knowledge and, if any such Event of
Default results from a Lease Event of Default, shall give the Certificate
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 Indenture 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. 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 Interim Rent or Basic Rent due under the Lease, the
Indenture Trustee shall have insufficient funds to make any payment of
Principal Amount and interest on any Secured Certificate on the day it becomes
due and payable, the Owner Trustee or the Owner Participant may, but shall not
be obligated to, pay the Indenture 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 Principal Amount and
interest (including interest, if any, on any overdue payments of such portion
of Principal Amount and interest) then due and payable on the Secured
Certificates, 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 on the Commencement Date and each of the two
immediately succeeding Basic Rent payment dates in respect of payment of
Interim Rent, or the Owner Trustee has cured six previous Events of Default in
respect of payments of Interim Rent and/or 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 Interim Rent or 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
Interim Rent or Basic Rent by Lessee) which can be cured has occurred, the
Owner Trustee or the Owner Participant may, but shall not be obligated to, cure
such Event of Default prior to the Enforcement Date as is necessary to
accomplish the observance or performance of the defaulted covenant, condition
or agreement.

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

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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 Indenture Trustee in and to the Mortgaged Property.
Upon any payment by the Owner Trustee or the Owner Participant pursuant to the
first or second preceding paragraphs of this Section 4.03, the Owner Trustee or
the Owner Participant, as the case may be, shall be subrogated to the rights of
the Indenture Trustee and the Certificate Holders in respect of the Interim
Rent or Basic Rent which was overdue at the time of such payment and interest
payable by 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 or the Owner
Participant, as the case may be, shall be entitled to receive such overdue
Interim Rent or Basic Rent or Supplemental Rent, as the case may be, and
interest thereon upon receipt thereof by the Indenture Trustee (and shall be
entitled to bring an action against Lessee to enforce such payment); provided,
however, that (i) if the Principal Amount and interest on the Secured
Certificates shall have become due and payable pursuant to Section 4.04(b)
hereof, such subrogation shall, until the Principal Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to all
Secured Certificates shall have been paid in full, be subordinate to the rights
of the Indenture Trustee and the Certificate Holders in respect of such payment
of overdue Interim Rent, Basic Rent, Supplemental Rent and such interest and
(ii) the Owner Trustee shall not be entitled to seek to recover any such
payment (or any payment in lieu thereof) except pursuant to the foregoing right
of subrogation by demand or suit for damages.

SECTION 4.04. REMEDIES.

(a) Subject to the provisions of Section 2.14 hereof, 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 Indenture Trustee may,
subject to the second paragraph of this Section 4.04(a), on and after the
Enforcement Date if such Event of Default results from a Lease Event of
Default, 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 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 Indenture Trustee shall
give the Owner Trustee and the Owner Participant twenty days' prior written
notice of its intention to sell the Aircraft or to foreclose the Lien of this
Indenture. Without limiting any of the foregoing, it is understood and agreed
that the Indenture 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
Indenture 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
Indenture Trustee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the remedies provided
for in Section 15 of the Lease to terminate the Lease or take possession and/or
sell 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 Indenture Trustee 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 "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 Section 1110 Period to the extent that the
continuation of such Continuous Stay Period subsequent to the expiration of the
Section 1110 Period (A) results from an agreement by the trustee or the
debtor-in-possession in such proceeding during the Section 1110 Period with the
approval of the relevant court to perform the Lease in accordance with Section
1110(a)(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
Section 1110 Period with the consent of the Indenture Trustee pursuant to
Section 1110(b) of the Bankruptcy Code or (C) results from Lessee's assumption
during the Section 1110 Period with the approval of the relevant court of the

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Lease pursuant to Section 365 of the Bankruptcy Code or (D) is the consequence
of the Indenture 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 Indenture 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 Indenture Trustee hereunder) to participate in such proceedings.

It is expressly understood and agreed that, subject only to the
immediately preceding paragraph, the inability, described in such paragraphs,
of the Indenture Trustee to exercise any right or remedy under the Lease shall
in no event and under no circumstances prevent the Indenture 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 Indenture Trustee may (and shall, upon receipt of a
written demand therefor from a Majority in Interest of Certificate 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 Secured
Certificates to be due and payable, whereupon the unpaid Principal Amount of
all Secured Certificates 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.

This Section 4.04(b), however, is subject to the condition that, if at any
time after the Principal Amount of the Secured Certificates 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 Secured Certificates and all other amounts payable under the
Secured Certificates (except the Principal Amount of the Secured Certificates
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 Certificate Holders may (but shall not be
obligated to), by written instrument filed with the Indenture Trustee, rescind
and annul the Indenture Trustee's declaration 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) Any Certificate Holder 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 Certificate Holder and secured by the Lien of this Trust
Indenture (but only to the extent that such purchase price would have been paid
to such Certificate 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 Principal Amount of all Secured Certificates then outstanding,
together with accrued interest thereon, 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 the Subordination Agent on
its behalf is a Certificate Holder, the Indenture 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.

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 Indenture Trustee, the
Owner Trustee shall promptly execute and deliver to the Indenture Trustee such
instruments of title and other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such

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<PAGE> 38

time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Mortgaged Property included in
the Trust Indenture Estate to which the Indenture 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 Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner
Trustee to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner Trustee hereby specifically
consents to the fullest extent permitted by applicable 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 Indenture 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 Indenture
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
Indenture 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, modification or
alteration of the Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture 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
Indenture Trustee under any provision of this Trust Indenture to collect and
receive all cash held by, or required to be deposited with, the Indenture
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
Indenture 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 Indenture 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 Indenture
Trustee, and of all persons properly engaged and employed by the Indenture
Trustee with respect hereto.

SECTION 4.06. REMEDIES CUMULATIVE.

Each and every right, power and remedy given to the Indenture 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 Indenture 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 Indenture 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.

SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS.

In case the Indenture 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
Indenture Trustee, then and in every such case the Owner Trustee, the Indenture
Trustee and Lessee shall, subject to any determination in

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<PAGE> 39

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 Indenture 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 Certificate
Holders, the Indenture 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 Certificate Holders,
the Indenture Trustee shall not waive any Default (i) in the payment of the
Principal Amount, Make-Whole Amount, if any, and interest and other amounts due
under any Secured Certificate 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 Certificate Holder.

SECTION 4.09. APPOINTMENT OF RECEIVER.

The Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture 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
Indenture Trustee with respect to the Mortgaged Property.

SECTION 4.10. INDENTURE TRUSTEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC..

The Owner Trustee irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of the Owner Trustee 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 Indenture Trustee or any purchaser, the
Owner Trustee shall ratify and confirm any such sale, assignment, transfer or
delivery, by executing and delivering to the Indenture 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.

SECTION 4.11. RIGHTS OF CERTIFICATE HOLDERS TO RECEIVE PAYMENT.

Notwithstanding any other provision of this Trust Indenture, the right of
any Certificate Holder to receive payment of principal of, and premium, if any,
and interest on a Secured Certificate on or after the respective due dates
expressed in such Secured Certificate, 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
Certificate Holder.

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<PAGE> 40

ARTICLE V

DUTIES OF THE INDENTURE TRUSTEE

SECTION 5.01. NOTICE OF EVENT OF DEFAULT.

If the Indenture Trustee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay Rent, the Indenture
Trustee shall give prompt written notice thereof to the Owner Trustee, the
Owner Participant, Lessee, and each Certificate Holder. Subject to the terms
of Sections 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the Indenture 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 Indenture Trustee shall be instructed in
writing by a Majority in Interest of Certificate Holders. Subject to the
provisions of Section 5.03, if the Indenture Trustee shall not have received
instructions as above provided within 20 days after mailing notice of such
Event of Default to the Certificate Holders, the Indenture 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 Certificate Holders. If the Indenture 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 Indenture
Trustee shall forthwith notify the Owner Participant, the Certificate Holders,
the Owner Trustee and Lessee. For all purposes of this Trust Indenture, in the
absence of Actual Knowledge on the part of the Indenture Trustee, the Owner
Trustee or the Owner Participant, the Indenture 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
Indenture Trustee, the failure of Lessee to pay any installment of Interim Rent
or 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 Indenture
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
Certificate Holders.

SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND LIMITATIONS.

(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a), 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 Certificate Holders, the Indenture 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,
or any other part of the Trust Indenture Estate as shall be specified in such
instructions; and (iii) after the occurrence and during the continuance of an
Event of Default, approve as satisfactory to the Indenture 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 Certificate Holders, the Indenture Trustee shall not approve any
such matter as satisfactory to the Indenture Trustee; provided,
that anything contained in this Trust Indenture, the Lease or the other
Operative Documents to the contrary notwithstanding:

(1) the Owner Trustee or the Owner Participant may, without the
consent of the Indenture Trustee, demand, collect, sue for or otherwise
obtain all amounts included in Excluded Payments from Lessee or the
Guarantor, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or equitable
remedies to require Lessee or the Guarantor to maintain the insurance
coverage referred to in Section 11 of the Lease; 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 or the Guarantor of such amounts
included in Excluded Payments or performance by Lessee or the Guarantor
of

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<PAGE> 41

such insurance covenant, or to recover damages for the breach thereof
or for specific performance of any covenant of Lessee or the Guarantor;

(2) unless an Event of Default and an Indenture Trustee Event shall
have occurred and be continuing and except as provided in clause (4)
below, the Indenture 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 and deliver amendments,
modifications, 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 Documents; provided that, subject
to the Indenture Trustee's right to exercise remedies under Section 15 of
the Lease without the consent of the Owner Trustee whether or not an
Event of Default shall have occurred and be continuing, no amendment,
modification, waiver or consent in respect of the Lease shall materially
adversely affect the Owner Participant or the Owner Trustee;

(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 Indenture Trustee,
(i) to receive from Lessee all notices, certificates, reports, filings,
opinions of counsel and other documents and all information which any
thereof is permitted or required to give or furnish to the Owner Trustee
or Lessor pursuant to any Operative Document (including pursuant to
Section 7(b) of the Participation Agreement), (ii) to exercise inspection
rights pursuant to Section 12 of the Lease, (iii) to retain all rights
with respect to insurance maintained for its own account which Section
11(e) of the Lease specifically confers on Lessor or the Owner
Participant, (iv) to exercise, to the extent necessary to enable it to
exercise its rights under Section 4.03 hereof, the rights of Lessor under
Section 21 of the Lease and (v) to give notices of default under Section
14 of the Lease;

(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 the exclusion of the Indenture Trustee to adjust Rent,
Stipulated Loss Values and Termination Values as provided in Section 3(d)
of the Lease and to select counsel with respect to any opinion relating
to tax matters to be delivered solely to the Owner Participant;

(5) 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 Indenture 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 19 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 Section 9(c) of the
Lease; and

(6) so long as no Event of Default shall have occurred and be
continuing, except as provided in clauses (2) and (3) above, all rights
of the "Lessor" under the Lease shall be exercised by the Owner Trustee
to the exclusion of the Indenture 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 Lessor, and (ii) consent to and
approve any assignment pursuant to Section 13 of the Lease; provided that
the foregoing shall not limit (A) any rights separately granted to the
Indenture Trustee under the Operative Documents or (B) the right of the
Indenture 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.

Notwithstanding anything to the contrary contained herein, the Indenture
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 and (B) subject only to the provisions of Sections 4.03, 4.04(a) and
2.14 hereof, exercise

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<PAGE> 42

the remedies set forth in such Section 15 (other than in connection with
Excluded Payments) at any time that a Lease Event of Default shall have
occurred and be continuing.

The Indenture 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 specified by Lessee pursuant to Section 8(e) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Certificate Holders (which
instructions may, by their terms, be operative only at a future date and which
shall be accompanied by the form of such continuation statement so to be
filed). The Indenture Trustee will furnish to each Certificate Holder (and,
during the continuation of an Indenture Trustee 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 Indenture 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 Sections 9(a) and
11(c) of the Lease, respectively, to the extent that the same shall not
have been furnished to such Certificate 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 Certificate Holders, the Indenture Trustee shall declare the Lease
to be in default pursuant to Section 15 thereof and exercise those remedies
specified by such Certificate Holders. The Indenture Trustee agrees to provide
to the Certificate Holders, the Owner Trustee, the Owner Participant and Lessee
concurrently with such declaration by the Indenture Trustee, notice of such
declaration by the Indenture Trustee.

SECTION 5.03. INDEMNIFICATION.

The Indenture Trustee shall not be under any obligation to take any action
under this Trust Indenture and nothing herein or therein shall require the
Indenture 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 Certificate Holder who is a QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Indenture Trustee shall be accepted as reasonable assurance of
adequate indemnity). The Indenture 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 Document be deemed to impose a duty on the Indenture Trustee to
take any action, if the Indenture 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 Indenture 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 expressly provided in
written instructions from Certificate Holders as provided in this Trust
Indenture; and no implied duties or obligations shall be read into this Trust
Indenture against the Indenture Trustee. The Indenture 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.

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<PAGE> 43

SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, TRUST INDENTURE OR
INSTRUCTIONS.

The Owner Trustee and the Indenture 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
Indenture 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
Indenture 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 Indenture 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 and upon receipt by or deposit
with the Indenture Trustee of the following:

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

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

A. With respect to the Replacement of
any Airframe:

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

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

(iii) that on the date of the Trust Agreement and Indenture
Supplement relating to the
Replacement Airframe the Owner Trustee will be the legal
owner of such Replacement Airframe free and clear of all
Liens except as are permitted by Section 6 of the Lease,
that such Replacement Airframe will on such date be in
good working order and condition, and that such
Replacement Airframe has been or, substantially
concurrently with such withdrawal, will be duly
registered in the name of the Owner Trustee under the
Federal Aviation Act or under the law then applicable to
the registration of the Airframe and that an
airworthiness certificate has been duly issued under the
Federal Aviation Act (or such other applicable law) with
respect to such Replacement Airframe, and that such
registration and certificate

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<PAGE> 44

is in full force and effect, and that Lessee will have
the full right and authority to use such Replacement
Airframe;

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

(v) that the Replacement Airframe is of
the same or an improved model as the Airframe requested
to be released from this Indenture;

(vi) the fair market value of the
Replacement Airframe as of the date of such certificate
(which in the judgment of Lessee shall be not less than
the then fair market value of the Airframe requested to
be released (assuming such Airframe was in the condition
and repair required to be maintained under the Lease));

(vii) the fair market value of the Airframe
immediately prior to the date the Airframe suffered an
Event of Loss (assuming such Airframe was in the
condition and repair required to be maintained under the
Lease);

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

(ix) that the release of the Airframe so to
be released will not be in contravention of any of the
provisions of this Indenture; or

B. with respect to the replacement of
any Engine:

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

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

(iii) that on the date of the Trust Agreement and Indenture
Supplement relating to the Replacement Engine the Owner
Trustee will be the legal owner of such Replacement
Engine free and clear of all Liens except as are
permitted by Section 6 of the

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<PAGE> 45

Lease, that such Replacement Engine will on such date
be in good working order and condition and that such
Replacement Engine is substantially the same as the
Engine to be released (or as improved model);

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

(v) the fair market value of the Engine to be released
(immediately prior to any Event of Loss suffered by
such Engine and assuming that such Engine was in the
condition and repair required to be maintained under the
Lease);

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

(vii) that, with respect to the replacement of an Engine
pursuant to Section 9(d) of the Lease, no Lease Event
of Default and no Lease Default has occurred which has
not been remedied or waived; and

(viii) that the release of the Engine so to be released will
not be in contravention of any of the provisions of this
Indenture.

(3) (a) The appropriate instruments (i) transferring to the Owner Trustee
title to the Replacement Airframe or Replacement Engine to be received as
consideration for the Airframe or Engine to be released and (ii) assigning to
the Owner Trustee the benefit of all manufacturer's and vendor's warranties
generally available with respect to such Replacement Airframe or Replacement
Engine, and a Trust Agreement and Indenture Supplement subjecting such
Replacement Airframe or Replacement Engine and any related warranty rights to
the Lien of this Indenture.

(b) With respect to the replacement of any Engine, such Uniform Commercial
Code financing statements covering the lien created by this Indenture as deemed
necessary or desirable by counsel for the Indenture Trustee to protect the lien
under the Indenture in the Replacement Engine.

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<PAGE> 46

(4) A certificate from either an aircraft engineer (who may be an employee
of Lessee) or a firm of independent aircraft appraisers selected by Lessee
confirming the accuracy of the information set forth in clause (2)A(vi) of this
section 5.06.

(5) The opinion of in-house counsel to Lessee, or other counsel
satisfactory to the Indenture Trustee, stating that:

(i) the certificates, opinions and other
instruments and/or property which have been or are
therewith delivered to and deposited with the Indenture
Trustee conform to the requirements of this Indenture
and the Lease and, upon the basis of such application,
the property so sold or disposed of may be lawfully
released from the Lien of this Indenture and all
conditions precedent herein provided for relating to
such release have been complied with; and

(ii) the Replacement Airframe or Replacement Engine has been
validly subjected to the Lien of this Indenture and
covered by the Lease, the instruments subjecting such
Replacement Airframe or Replacement Engine to the Lease
and to the Lien of this Indenture, as the case may be,
have been duly filed for recordation pursuant to the
Federal Aviation Act or any other law then applicable to
the registration of the Aircraft, and no further action,
filing or recording of any document is necessary or
advisable in order to establish and perfect the right,
title, estate and interest of the Owner Trustee to and
the Lien of this Indenture on such Replacement Aircraft
or Replacement Engine.

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 Indenture
Trustee agree for the benefit of the Certificate 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 Agreement and
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, (a) 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, and (b) the
provisions of this Trust Indenture shall no longer be applicable to the
Airframe or Engine or Engines being replaced, which shall be released from the
Lien of this Indenture.

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<PAGE> 47

SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY INDENTURE TRUSTEE.

Any amounts held by the Indenture Trustee as assignee of the Owner
Trustee's rights to hold monies for security pursuant to Section 22(a) of the
Lease shall be held in accordance with the terms of such Section and the
Indenture Trustee agrees, for the benefit of Lessee, to perform the duties of
the Owner Trustee under such Section. Any amounts held by the Indenture
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 Document
providing for amounts to be held by the Indenture Trustee which are not
distributed pursuant to the other provisions of Article III hereof shall be
invested by the Indenture Trustee from time to time in Cash Equivalents as
directed by Lessee so long as the Indenture 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 investment, net of the Indenture
Trustee's reasonable fees and expenses in making such investment, shall be held
and applied by the Indenture 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 Indenture 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 Indenture
Trustee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture.

ARTICLE VI

THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE

SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.

The Indenture 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 Indenture 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 Indenture
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, upon consummation of
the Refinancing Transaction, the Refunding Agreement) or in Section 4.01(b) or
6.03 hereof (or in any certificate furnished to the Indenture Trustee or any
Certificate Holder in connection with the transactions contemplated by the
Operative Documents) or, in the case of the Indenture Trustee (in its
individual capacity), from the inaccuracy of any representation or warranty of
the Indenture Trustee (in its individual capacity) in the Participation
Agreement (or, upon consummation of the Refinancing Transaction, the Refunding
Agreement) or expressly made hereunder. Neither the Owner Trustee nor the
Indenture Trustee 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 Indenture 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 and 5.04
hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Indenture 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

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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 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 INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, NOR THE OWNER PARTICIPANT 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 by Lessee, 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 in 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 Indenture 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 (or, upon
consummation of the Refinancing Transaction, the Refunding Agreement), the
Secured Certificates, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement or the Guarantee, 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 Indenture Trustee, in
each case expressly made in this Trust Indenture or in the Participation
Agreement (or, upon consummation of the Refinancing Transaction, the Refunding
Agreement). The Loan Participants, the Certificate 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 Indenture Trustee pursuant to any
provision hereof and not then required to be distributed to the Certificate
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
10(f) or 11(g) of the Lease and Section 5.09 hereof, and may be deposited under
such general conditions as may be prescribed by Law, and the Indenture Trustee
shall not be liable for any interest thereon (except that the Indenture 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 Certificate Holders) in Cash
Equivalents; provided, however, that any payments received, or applied
hereunder, by the Indenture Trustee shall be accounted for by the Indenture
Trustee 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 Indenture 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 Indenture
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

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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 Principal Amount of Secured
Certificates outstanding as of any date, the Owner Trustee may for all purposes
hereof rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture 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 Indenture 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 Indenture Trustee for any action
taken or omitted to be taken by them in good faith in reliance thereon. The
Indenture 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 Indenture 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 Indenture 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.

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 Indenture 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 Indenture
Trustee agrees that it shall have no right against the Loan Participants, the
Certificate 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 CERTIFICATE HOLDERS.

In the administration of the trusts created hereunder, the Indenture
Trustee shall have the right to seek instructions from a Majority in Interest
of Certificate Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should the Indenture Trustee's
duties or obligations hereunder be unclear, and the Indenture Trustee shall
incur no liability in refraining from acting until it receives such
instructions. The Indenture Trustee shall be fully protected for acting in
accordance with any instructions received under this Section 6.08.

ARTICLE VII

INDEMNIFICATION OF INDENTURE 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, except as otherwise provided in Section 2.03 hereof, to
assume liability for, and does hereby indemnify, protect, save and keep
harmless the Indenture 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

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any taxes payable by the Indenture Trustee on or measured by any
compensation received by the Indenture Trustee for its services under this
Trust Indenture), claims, actions, suits, costs, expenses or disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever, which may be imposed on, incurred by or asserted against the
Indenture 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 Document 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 Indenture Trustee hereunder, to the extent not
reimbursed by Lessee. Without limiting the foregoing, the Indenture Trustee
agrees that, prior to seeking indemnification from the Trust Indenture Estate,
it will demand, and take such action as it may in its discretion determine to
be reasonable to pursue, indemnification available to the Indenture Trustee
under the Lease or the Participation Agreement. Notwithstanding the foregoing,
the Indenture Trustee shall not be entitled to any indemnification for any
Expenses to the extent relating to or arising from the willful misconduct or
gross negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture 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 Sections 7(b) and 7(c) of the Participation
Agreement from Lessee's indemnities under such Sections. In addition, if
necessary, the Indenture 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 the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate.

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 Indenture Trustee, Lessee and
the Certificate Holders.

SECTION 8.02. RESIGNATION OF INDENTURE TRUSTEE; APPOINTMENT OF SUCCESSOR.

(a) The Indenture 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 Certificate Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee. In addition, a Majority in Interest of
Certificate Holders may at any time (but only with the consent of 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 Indenture
Trustee without cause by an instrument in writing delivered to the Owner
Trustee, Lessee, the Owner Participant and the Indenture Trustee, and the
Indenture Trustee shall promptly notify each Certificate Holder thereof in
writing, such removal to be effective upon the acceptance of the trusteeship by
a successor Indenture Trustee. In the case of the resignation or removal of
the Indenture Trustee, a Majority in Interest of Certificate Holders may
appoint a successor Indenture 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 Indenture Trustee shall not have been appointed within 30 days after
such notice of resignation or removal, the Indenture Trustee, the Owner
Trustee, the Owner Participant or any Certificate Holder may apply to any court
of competent jurisdiction to appoint a successor Indenture Trustee to act until
such time, if any, as a successor shall have been appointed as above provided.
The successor Indenture

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Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Indenture Trustee appointed as above
provided.

(b) Any successor Indenture Trustee, however appointed, shall execute and
deliver to the Owner Trustee, the predecessor Indenture Trustee and Lessee an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after the
time of such appointment, and thereupon such successor Indenture Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Indenture Trustee hereunder in the
trust hereunder applicable to it with like effect as if originally named the
Indenture Trustee herein; but nevertheless upon the written request of such
successor Indenture Trustee, such predecessor Indenture Trustee shall execute
and deliver an instrument transferring to such successor Indenture Trustee,
upon the trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee, and such predecessor
Indenture Trustee shall duly assign, transfer, deliver and pay over to such
successor Indenture Trustee all monies or other property then held by such
predecessor Indenture Trustee hereunder.

(c) Any successor Indenture 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; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston, Massachusetts
and having (or whose obligations under the Operative Documents 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 Indenture Trustee hereunder upon
reasonable or customary terms.

(d) Any corporation into which the Indenture 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 Indenture Trustee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Indenture Trustee may be transferred, shall, subject to
the terms of paragraph (c) of this Section 8.02, be a successor Indenture
Trustee and the Indenture Trustee under this Trust Indenture without further
act.

SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.

(a) Whenever (i) the Indenture 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 Secured
Certificates or any of the transactions contemplated by the Participation
Agreement, (ii) the Indenture Trustee shall be advised by counsel satisfactory
to it that it is so necessary or prudent in the interests of the Certificate
Holders (and the Indenture Trustee shall so advise the Owner Trustee and
Lessee), or (iii) the Indenture Trustee shall have been requested to do so by a
Majority in Interest of Certificate Holders, then in any such case, the
Indenture Trustee and, upon the written request of the Indenture 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 Indenture Trustee, either to act jointly with the
Indenture 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 Indenture Trustee or
a Majority in Interest of Certificate 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

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additional and 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 Indenture Trustee so to do, or if an Event of Default shall have occurred
and be continuing, the Indenture 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 Indenture 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 Indenture 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 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 removed, all the assets,
property, rights, powers, trusts, duties and obligations of such additional or
separate trustee shall revert to the Indenture 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 Indenture 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 Document
to the Indenture Trustee shall be promptly paid over by it to the Indenture
Trustee. All other rights, powers, duties and obligations conferred or imposed
upon any additional or separate trustee shall be exercised or performed by the
Indenture 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 Indenture 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 Indenture Trustee or a
Majority in Interest of Certificate Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Indenture Trustee shall be liable for the
consequences of its lack of reasonable care in selecting, and Indenture
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 Indenture 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 Indenture Trustee hereunder.

(c) If at any time the Indenture Trustee shall deem it no longer necessary
or desirable 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 Certificate Holders, or in the event that the Indenture
Trustee shall have been requested to do so in writing by a Majority in Interest
of Certificate Holders, the Indenture Trustee and, upon the written request of
the Indenture 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
Indenture 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.

ARTICLE IX

SUPPLEMENT 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, and except with respect to
Excluded Payments, 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 Guarantee, 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 Guarantee, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Indenture
Trustee and a Majority in Interest of Certificate Holders. Anything to the
contrary contained herein notwithstanding, without the necessity of the consent
of any of the Certificate Holders or the Indenture 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),
Section 9 or Section 19 of the Lease so long as such amendments,

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<PAGE> 53

modifications and changes do not and would not affect the time of, or reduce
the amount of, Rent payments until after the payment in full of all Secured
Obligations or otherwise adversely affect the Certificate Holders.

(b) Without limiting the provisions of Section 9.01(a) hereof and subject
to Section 5.02(a)(2) hereof, the Indenture Trustee agrees with the Certificate
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
Guarantee 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
Certificate Holders, or does not adversely effect the Certificate Holders, but
upon the written request of a Majority in Interest of Certificate Holders, the
Indenture 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 Manufacturer; provided, however, that, without the consent of each holder
of an affected Secured Certificate then outstanding, no such amendment of or
supplement to this Trust Indenture, the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement, the Guarantee 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 Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or
5.06 hereof, Section 14 (except to add an Event of Default) of the Lease, the
definitions of "Event of Default", "Default", "Lease Event of Default", "Lease
Default", "Majority in Interest of Certificate Holders", "Make-Whole
Amount" or "Certificate Holder", or the percentage of Certificate 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 Principal
Amount, Make-Whole Amount, if any, or interest with respect to any Secured
Certificate, or alter or modify the provisions of Article III hereof with
respect to the order of priorities in which distribution thereunder shall be
made as among the Certificate Holders, the Owner Trustee and Lessee, (iii)
reduce, modify or amend any indemnities in favor of the Certificate Holders,
(iv) consent to any change in the Trust Indenture or the Lease which would
permit redemption of Secured Certificates earlier than permitted under Section
2.10 or 2.11 hereof or the purchase of the Secured Certificates other than as
permitted by Section 2.14 hereof, (v) modify any of the provisions of Section
3(d)(v) of 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 Interim Rent, 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 18 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 Certificate 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. So long as no Lease Event of
Default has occurred and is continuing, without the consent of Lessee no
amendment or supplement to this Trust Indenture or waiver or modification of
the terms hereof shall adversely affect Lessee.

(c) At any time after the date of the consummation of the Refinancing
Transaction, the Owner Trustee and the Indenture Trustee may enter into one or
more agreements supplemental hereto without the consent of any Certificate
Holder for any of the following purposes: (i) (a) to cure any defect or
inconsistency herein or in the Secured Certificates, or to make any change not
inconsistent with the provisions hereof (provided that such change does not
adversely affect the interests of any Certificate Holder in its capacity solely
as Certificate 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 Indenture 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 Certificate Holders
in its capacity solely as Certificate 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 Indenture 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
Certificate Holders, or to surrender any rights or power herein conferred upon
the Owner Trustee, the Owner Participant or Lessee; (vi) to

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<PAGE> 54

add to the rights of the Certificate Holders; and (vii) to include on the
Secured Certificates 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 Indenture Trustee hereunder, any
document required to be executed by it pursuant to the terms of Section 9.01
hereof adversely 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 CERTIFICATE HOLDERS.

Promptly after the execution by the Owner Trustee or the Indenture Trustee
of any document entered into pursuant to Section 9.01 hereof, the Indenture
Trustee shall mail, by first class mail, postage prepaid, a copy thereof to
Lessee and to each Certificate Holder at its address last set forth in the
Secured Certificate Register, but the failure of the Indenture 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 AGREEMENT
AND INDENTURE SUPPLEMENT.

No written request or consent of the Indenture Trustee, the Certificate
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 Agreement and Indenture Supplement specifically required by the terms
hereof.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. TERMINATION OF TRUST INDENTURE.

Upon (or at any time after) payment in full of the Principal Amount of,
Make-Whole Amount, if any, and interest on and all other amounts due under all
Secured Certificates and provided that there shall then be no other Secured
Obligations due to the Certificate Holders and the Indenture Trustee hereunder
or under the Participation Agreement, the Owner Trustee shall direct the
Indenture 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 Guarantee,
the Purchase Agreement, the Purchase Agreement Assignment with the Consent and
Agreement attached thereto from the assignment and pledge thereof hereunder and
the Indenture 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 Indenture Trustee of all property constituting part of the
Trust Indenture Estate and the final distribution by the Indenture 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 CERTIFICATE
HOLDERS.

No holder of a Secured Certificate shall have legal title to any part of
the Trust Indenture Estate. No transfer, by operation of law or otherwise, of
any Secured Certificate or other right, title and interest of any Certificate
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.

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<PAGE> 55

SECTION 10.03. SALE OF AIRCRAFT BY INDENTURE 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 Indenture
Trustee made pursuant to the terms of this Trust Indenture shall bind the
Certificate Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture 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 Indenture Trustee.

SECTION 10.04. TRUST INDENTURE FOR BENEFIT OF OWNER TRUSTEE, INDENTURE
TRUSTEE, OWNER PARTICIPANT, LESSEE AND CERTIFICATE HOLDERS.

Nothing in this Trust Indenture, whether express or implied, shall be
construed to give any person other than the Owner Trustee, the Indenture
Trustee, the Owner Participant, Lessee and the Certificate Holders, 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 its office at 79 South Main Street,
Salt Lake City, Utah 84111, Attention: Corporate Trust Department (Telecopy No.
(801) 246-5053), with a copy to the Owner Participant addressed as provided in
clause (iii) below, (ii) if to the Indenture Trustee, addressed to it at its
office at Two International Place, 4th Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Department (Telecopy No. (617) 664-5371), (iii) if
to any Participant, Lessee or any Certificate Holder, addressed to such party
at such address as such party shall have furnished by notice to the Owner
Trustee and the Indenture Trustee, or, until an address is so furnished,
addressed to the address of such party (if any) set forth on the signature
pages to the Refunding Agreement or in the Secured Certificate Register.
Whenever any notice in writing is required to be given by the Owner Trustee,
any Participant or the Indenture Trustee or any Certificate Holder or Lessee to
any of the other of them, such notice shall be deemed given and such
requirement satisfied when such notice is received, or if such notice is mailed
by certified mail, postage prepaid, three Business Days after being mailed,
addressed as provided above. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
parties to this Trust Indenture.

SECTION 10.06. SEVERABILITY.

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

SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS.

No term or provision of this Trust Indenture or the Secured Certificates
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Indenture Trustee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Secured Certificate 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,

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<PAGE> 56

notice, direction, consent, waiver or other instrument or action by any
Certificate 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 Certificate Holder by its
acceptance of a Secured Certificate agrees to be bound by this Trust Indenture
and all provisions of the Participation Agreement applicable to a Loan
Participant or a Certificate 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, the Owner Trustee, the Indenture 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, fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.

SECTION 10.11. GOVERNING LAW; COUNTERPART FORM.

THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST INDENTURE IS
BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may be executed
by the parties hereto in separate counterparts (or upon separate signature
pages bound together into one or more counterparts), each of which 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 CERTIFICATE HOLDERS.

All votes of the Certificate Holders shall be governed by a vote of a
Majority in Interest of Certificate 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 Indenture 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 Document, each such party agrees that a construction which
would preserve such benefits shall control over any construction which would
not preserve such benefits.

SECTION 10.14. NO ACTION CONTRARY TO LESSEE'S RIGHTS UNDER THE LEASE.

Notwithstanding any of the provisions of this Trust Indenture or the Trust
Agreement to the contrary, neither the Indenture Trustee nor the Owner Trustee
will take any action contrary to Lessee's rights under

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<PAGE> 57

the Lease, including the right to possession and use of, and the quiet
enjoyment of, the Aircraft, except in accordance with provisions of the Lease.

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<PAGE> 58

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

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

By: _________________________________
Name: _______________________________
Title:

STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee

By: _________________________________
Name: _______________________________
Title:

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<PAGE> 59

EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE

TRUST AGREEMENT AND INDENTURE SUPPLEMENT

[NW 1996 B]

This TRUST AGREEMENT AND INDENTURE SUPPLEMENT [NW 1996 B], dated _______
__, _____ (herein called this "TRUST INDENTURE SUPPLEMENT") of FIRST SECURITY
BANK OF UTAH, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee (herein called the "OWNER TRUSTEE") under that certain Trust
Agreement [NW 1996 B] dated as of April 24, 1996 (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 AMENDED AND RESTATED TRUST INDENTURE AND SECURITY AGREEMENT
[NW 1996 B], dated as of [________], 1996 (as amended and supplemented to the
date hereof, the "TRUST INDENTURE") between the Owner Trustee and STATE STREET
BANK AND TRUST COMPANY, as Indenture Trustee (the "INDENTURE 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 Indenture Trustee; and

WHEREAS, the 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:

<PAGE> 60

AIRFRAME

One airframe identified as follows:

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

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 any of such
engines.

Together with all of Owner Trustee's right, title and interest in and to
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).

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 Indenture Trustee, its successors and assigns, for the
security and benefit of the Certificate Holders, 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
Indenture Trustee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Certificate Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Secured Certificate over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity

EXHIBIT A-2

<PAGE> 61

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.

This Trust Indenture Supplement is being delivered in the State of New
York.

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 OF UTAH, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as Owner Trustee, Owner Trustee

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

<PAGE> 62

SCHEDULE I

PRINCIPAL AMOUNT INTEREST RATE
---------------- -------------
Series A . . . . . .
Series B . . . . . .
Series C . . . . . .
. . . . . .

[Intentionally omitted from the version of
this document filed with the FAA as
containing confidential financial information.]

<PAGE> 63

SECURED CERTIFICATES AMORTIZATION

SERIES A

PERCENTAGE OF ORIGINAL
PAYMENT DATE AMOUNT TO BE PAID
------------ ----------------------

[Intentionally omitted from the version of
this document filed with the FAA as
containing confidential financial information.]

<PAGE> 64

SERIES B

PERCENTAGE OF ORIGINAL
PAYMENT DATE AMOUNT TO BE PAID
------------ ----------------------

[Intentionally omitted from the version of
this document filed with the FAA as
containing confidential financial information.]

<PAGE> 65

SERIES C

PERCENTAGE OF ORIGINAL
PAYMENT DATE AMOUNT TO BE PAID
------------ ----------------------

[Intentionally omitted from the version of
this document filed with the FAA as
containing confidential financial information.]

<PAGE> 66

SCHEDULE II

PASS THROUGH TRUST AGREEMENTS

1. Northwest Airlines 1996-1 Pass Through Trust Agreement, supplemented by
Trust Supplement No. ___ dated ___________, 1996.

2. Northwest Airlines 1996-1 Pass Through Trust Agreement, supplemented by
Trust Supplement No. ___ dated ___________, 1996.

3. Northwest Airlines 1996-1 Pass Through Trust Agreement, supplemented by
Trust Supplement No. ___ dated ___________, 1996.

<PAGE> 1
Exhibit (f)(3)

EXECUTION COPY

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

LEASE AGREEMENT

[NW 1996 B]

DATED AS OF

APRIL 24, 1996

BETWEEN

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,

NOT IN ITS INDIVIDUAL CAPACITY, EXCEPT AS EXPRESSLY

PROVIDED HEREIN, BUT SOLELY AS OWNER TRUSTEE,

Lessor

AND

NORTHWEST AIRLINES, INC.,

Lessee

ONE BOEING 757-251 AIRCRAFT

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

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

<PAGE> 2

TABLE OF CONTENTS TO LEASE AGREEMENT

Page
----
SECTION 1. DEFINITIONS ................................................ 1

SECTION 2. ACCEPTANCE AND LEASE ....................................... 15

SECTION 3. TERM AND RENT .............................................. 15

(a) Interim Term and Basic Term ........................... 15
(b) Interim Rent .......................................... 16
(c) Basic Rent ............................................ 16
(d) Adjustments to Basic Rent ............................. 17
(e) Supplemental Rent ..................................... 19
(f) Payments in General ................................... 20
(g) Prepayment of Certain Rent Payments ................... 21

SECTION 4. LESSOR'S REPRESENTATIONS AND WARRANTIES .................... 21

SECTION 5. RETURN OF THE AIRCRAFT ..................................... 22
(a) Condition Upon Return ................................. 22
(b) Return of the Engines ................................. 23
(c) Fuel; Manuals ......................................... 24
(d) Storage Upon Return ................................... 24

SECTION 6. LIENS ...................................................... 24

SECTION 7. REGISTRATION, MAINTENANCE AND OPERATION;
POSSESSION AND SUBLEASES; INSIGNIA ......................... 25
(a) Registration and Maintenance ......................... 25
(b) Possession and Subleases .............................. 27
(c) Insignia .............................................. 31

SECTION 8. REPLACEMENT AND POOLING OF PARTS;
ALTERATIONS, MODIFICATIONS AND ADDITIONS ................... 31
(a) Replacement of Parts .................................. 31
(b) Pooling of Parts ...................................... 32
(c) Alterations, Modifications and Additions .............. 32

-i-

<PAGE> 3

Page
----
SECTION 9. VOLUNTARY TERMINATION....................................... 33
(a) Termination Event ..................................... 33
(b) [Intentionally Omitted] ............................... 34
(c) Optional Sale of the Aircraft ......................... 34
(d) Termination as to Engines ............................. 36

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC. ....................... 36

(a) Event of Loss with Respect to the Aircraft ............ 36
(b) Event of Loss with Respect to an Engine ............... 39
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc. ............ 40
(d) Requisition for Use of the Aircraft by the United States
Government or the Government of Registry
of the Aircraft Which is a Member of OECD ............ 40
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft
Which is a Member of OECD ............................. 41
(f) Application of Payments During Existence of Event of
Default ............................................... 42

SECTION 11. INSURANCE .................................................. 42

(a) Public Liability and Property Damage Insurance ........ 42
(b) Insurance Against Loss or Damage to the Aircraft ...... 43
(c) Reports, etc. ......................................... 46
(d) Self-Insurance ........................................ 47
(e) Additional Insurance by Lessor and Lessee ............. 47
(f) Indemnification by Government in Lieu of Insurance .... 47
(g) Application of Payments During Existence of an Event of
Default ............................................... 48

SECTION 12. INSPECTION ................................................. 48

SECTION 13. ASSIGNMENT ................................................. 48

SECTION 14. EVENTS OF DEFAULT .......................................... 49

SECTION 15. REMEDIES ................................................... 51

SECTION 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS ............ 54

SECTION 17. NOTICES .................................................... 55

SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC. ............................. 56

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<PAGE> 4

Page
----
SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION ............... 57

(a)Renewal Options ......................................... 57
(b)Purchase Options ........................................ 58
(c)Valuation ............................................... 58
(d)Special Purchase Option ................................. 59

SECTION 20. SECURITY FOR LESSOR'S OBLIGATION
TO HOLDERS OF SECURED CERTIFICATES ......................... 60

SECTION 21. LESSOR'S RIGHT TO PERFORM FOR LESSEE ....................... 61

SECTION 22. INVESTMENT OF SECURITY FUNDS;
LIABILITY OF LESSOR LIMITED ................................ 61

(a)Investment of Security Funds ............................ 61
(b)Liability of Lessor Limited ............................ 61

SECTION 23. SERVICE OF PROCESS ......................................... 62

SECTION 24. MISCELLANEOUS .............................................. 62

SECTION 25. SUCCESSOR TRUSTEE .......................................... 62

SECTION 26. COVENANT OF QUIET ENJOYMENT ................................ 64

-iii-

<PAGE> 5

EXHIBITS

EXHIBIT A - Form of Lease Supplement
EXHIBIT B - Interim Rent, Basic Rent, Excess Amount, Lessor's Cost,
Special Purchase Price, Initial Installment and Remaining
Installments Schedule
EXHIBIT C - Stipulated Loss Value Schedule
EXHIBIT D - Termination Value Schedule
EXHIBIT E - Rent Recalculation Verification
EXHIBIT F - Return Conditions

-iv-

<PAGE> 6

LEASE AGREEMENT

[NW 1996 B]

This LEASE AGREEMENT [NW 1996 B], dated as of April 24, 1996, between
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided herein, but solely as Owner Trustee
under the Trust Agreement (as defined in Section 1 hereof) (in such capacity,
"LESSOR"), and NORTHWEST AIRLINES, INC., a corporation organized and existing
pursuant to the laws of the State of Minnesota ("LESSEE");

W I T N E S S E T H:

SECTION 1. DEFINITIONS. Unless the context otherwise requires, the
following terms shall have the following meanings for all purposes of this Lease
Agreement [NW 1996 B] and shall be equally applicable to both the singular and
the plural forms of the terms herein defined:

"Administrative Agent" means Bankers Trust Company, a New York
banking corporation, as administrative agent pursuant to the
Participation Agreement, and any successor acting as administrative
agent.

"Affiliate" means, with respect to any person, any other
person directly or indirectly controlling, controlled by or under
common control with such person. For the purposes of this
definition, "control" (including "controlled by" and "under common
control with") shall mean 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.

"After-Tax Basis" means an amount, which, after deduction of
all Federal, state, local and foreign taxes required to be paid by
or on behalf of the recipient in respect of the receipt or
realization of such amount, is equal to the payment required under
the provisions of any Operative Document that requires payments to
be made on an After-Tax Basis.

"Aircraft" means the Airframe to be delivered and leased
hereunder (or any airframe from time to time substituted for such
Airframe pursuant to Section 10(a) hereof) together with the two
Engines initially leased hereunder (or any engine substituted for
either of such Engines pursuant to the terms hereof), whether or
not any of such initial or substituted Engines may from time to
time be installed on such initial or substituted Airframe or may be
installed on any other airframe or on any other aircraft.

<PAGE> 7

"Airframe" means: (i) the Boeing 757-251 aircraft (except
Engines or engines from time to time installed thereon) specified
in the initial Lease Supplement, which aircraft shall be leased by
Lessor to Lessee hereunder and under such Lease Supplement, and any
aircraft (except Engines or engines from time to time installed
thereon) which may from time to time be substituted for such
aircraft (except Engines or engines from time to time installed
thereon) pursuant to clause (ii) of the first paragraph of Section
10(a); and (ii) any and all Parts (A) so long as the same shall be
incorporated or installed in or attached to such aircraft (except
Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance
with the terms of Section 8 after removal from such aircraft
(except Engines or engines from time to time installed thereon);
provided, however, that at such time as an aircraft (except Engines
or engines from time to time installed thereon) shall be deemed
part of the property leased hereunder in substitution for the
Airframe pursuant to the applicable provisions hereof, the replaced
Airframe shall cease to be an Airframe hereunder.

"Applicable Rate" means as of any date the weighted average of
the interest rates borne by the Secured Certificates then
outstanding and, if no Secured Certificates shall be outstanding,
the Base Rate.

"Assumed Interest Rate" has the meaning set forth in Section
3(c) hereof.

"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.

"Base Rate" means the rate of interest announced publicly by
The Bank of New York in New York, New York from time to time as its
prime rate.

"Basic Rent" means, for the Basic Term, the rent payable for
the Aircraft pursuant to Section 3(c) as adjusted as provided in
Section 3(d) but subject always to the provisions of Section
3(d)(v) hereof and, for any Renewal Term, Basic Rent determined
pursuant to Section 19.

"Basic Term" means the term for which the Aircraft is leased
hereunder pursuant to Section 3(a) hereof commencing on the
Commencement Date and ending on January 2, 2019, or such earlier
date as this Lease may be terminated in accordance with the
provisions hereof.

"Bill of Sale" means a full warranty bill of sale covering the
Aircraft, executed by Lessee in favor of the Owner Trustee, dated
the Delivery Date, specifically referring to the Airframe and each
Engine, which Bill of Sale shall contain, among other things, a
statement that such Bill of Sale thereby conveys to the Owner
Trustee good title to the Airframe and each Engine described in

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<PAGE> 8

such Bill of Sale, free and clear of all liens, encumbrances and
rights of others except Liens permitted by clause (v) of Section 6
of the Lease.

"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to
close in New York, New York; Boston, Massachusetts; Salt Lake City,
Utah; or Minneapolis, Minnesota and, in connection with any payment
of Rent and so long as any Secured Certificate is a Eurodollar Loan
(as defined in the Trust Indenture), such day is also a day for
trading by and between banks in the interbank Eurodollar market.

"Certificate Holder" means Certificate Holder as defined in
the Trust Indenture.

"Certificated Air Carrier" means a Citizen of the United
States holding a carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49,
United States Code, for aircraft capable of carrying ten or more
individuals or 6,000 pounds or more of cargo or that otherwise is
certified or registered to the extent required to fall within the
purview of 11 U.S.C. Section 1110 or any analogous successor
provision of the Bankruptcy Code.

"Citizen of the United States" has the meaning specified in
Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in
substitution or replacement therefor.

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

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

"Commencement Date" means January 2, 1997.

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

"Consent and Agreement" means the Consent and Agreement [NW
1996 B], dated as of the date hereof, executed by the Manufacturer,
as the same may be amended, modified or supplemented from time to
time in accordance with the applicable provisions thereof.

"Credit Agreement" means the Credit Agreement, dated as of
November 2, 1995, among Lessee, the banks, financial institutions
and other institutional

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<PAGE> 9

lenders listed on the signature pages thereof, ABN AMRO Bank N.V.,
as documentation agent, Bankers Trust Company, as administrative
agent, and Chemical Securities, Inc., as syndication agent, as the
same may be amended, supplemented or otherwise modified from time
to time.

"Debt Rate" has the meaning set forth in the Trust Indenture.

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

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

"Depreciation Period" means the period commencing on the
Delivery Date and ending on December 31, 2003.

"Documentation Agent" means ABN AMRO Bank N.V., a bank
organized under the laws of the Netherlands, as documentation agent
pursuant to the Participation Agreement, and any successor acting
as documentation agent.

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

"Engine" means (i) each of the two Pratt & Whitney Model
PW2037 engines listed by manufacturer's serial number in the
initial Lease Supplement, whether or not from time to time
thereafter installed on the Airframe or installed on any other
airframe or on any other aircraft; and (ii) any engine which may
from time to time be substituted, pursuant to the terms hereof, for
either of such two engines, together in each case with any and all
Parts incorporated or installed in or attached thereto or any and
all Parts removed therefrom so long as title thereto shall remain
vested in Lessor in accordance with the terms of Section 8 after
removal from such Engine; provided, however, that at such time as
an engine shall be deemed part of the property leased hereunder in
substitution for an Engine pursuant to the applicable provisions
hereof, the replaced Engine shall cease to be an Engine hereunder.
The term "Engines" means, as of any date of determination, all
Engines then leased hereunder.

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

"Event of Loss" with respect to the Aircraft, Airframe or any
Engine means any of the following events with respect to such
property: (i) the loss of such property or of the use thereof due
to the destruction of or damage to such property which renders
repair uneconomic or which renders such property

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<PAGE> 10

permanently unfit for normal use by Lessee for any reason
whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of
a total loss, or a constructive or compromised total loss; (iii)
the theft or disappearance of such property, or the confiscation,
condemnation, or seizure of, or requisition of title to, or use of,
such property (other than a requisition for use by the United
States Government or any other government of registry of the
Aircraft which is a member of OECD, or any agency or
instrumentality of any thereof) which in the case of any event
referred to in this clause (iii) (other than a requisition of
title) shall have resulted in the loss of possession of such
property by Lessee for a period in excess of 180 consecutive days
or, if earlier, 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; (iv) as a result of any
law, rule, regulation, order or other action by the Federal
Aviation Administration or other governmental body of the
government of registry of the Aircraft having jurisdiction, the use
of such property in the normal course of the business of air
transportation shall have been prohibited for a period of 180
consecutive days, unless 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, 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. registered fleet of Boeing Model 757-200
aircraft and Lessee, prior to the expiration of such two-year
period, shall have conformed at least one such aircraft in its
fleet to the requirements of any such law, rule, regulation, order
or other action and commenced regular commercial use of the same in
such jurisdiction and shall be diligently carrying forward, in a
manner which does not discriminate against the Aircraft in so
conforming the Aircraft, all steps which are necessary or desirable
to permit the normal use of the Aircraft by Lessee, 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; (v) the requisition for use by the United States Government
or any other government of registry of the Aircraft which is a
member of OECD or any instrumentality or agency of any thereof,
which shall have occurred during the Basic Term (or the Interim
Term or any Renewal Term) and shall have continued for thirty (30)
days beyond the Term, provided, however, that no Event of Loss
pursuant to this clause (v) shall exist if Lessor shall have
furnished to Lessee the written notice specified in Section 10(d)
hereof; and (vi) any divestiture of title to or interest in an
Engine treated as an Event of Loss pursuant to Section 7(b) hereof.
An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if an Event of Loss occurs with respect to the
Airframe.

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<PAGE> 11

"Excess Amount" for the Transition Date means an amount equal
to the amount determined by multiplying Lessor's Cost by the
percentage set forth in Exhibit B hereto under the heading "Excess
Amount" opposite the Transition Date; provided, however, that, to
the extent that the aggregate amount of interest due and payable on
the Transition Date on the Secured Certificates relating to the
period from and including the Delivery Date to but excluding the
Transition Date is less than the aggregate amount of interest on
the Secured Certificates that would have been due and payable on
the Transition Date if such Secured Certificates had borne interest
at the Assumed Interest Rate for such period, the corresponding
percentage set forth in Exhibit B shall be decreased by the amount
which when multiplied by Lessor's Cost will equal such
differential.

"Expenses" has the meaning specified in Section 7(c) of the
Participation Agreement.

"FAA Bill of Sale" means a bill of sale for the Aircraft on AC
Form 8050-2 or such other form as may be approved by the Federal
Aviation Administration on the Delivery Date for the Aircraft,
executed by Lessee in favor of the Owner Trustee and dated the
Delivery Date.

"Federal Aviation Act" means that portion of the United States
Code comprising those provisions formerly referred to as the
Federal Aviation Act of 1958, as amended, or any subsequent
legislation that amends, supplements or supersedes such provisions.

"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or
instrumentality of the United States government succeeding to their
functions.

"Funding Loss Amount" has the meaning assigned to that term in
the Trust Indenture.

"Guarantee" means the Guarantee [NW 1996 B], dated as of the
date hereof, made by the Guarantor in favor of the Parties, as such
Guarantee may be amended or supplemented from time to time pursuant
to the applicable provisions thereof.

"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation.

"Indemnitee" means the Owner Participant, the Owner Trustee,
in its individual capacity and as trustee under the Trust
Agreement, the Trust Estate, the Indenture Trustee, the
Administrative Agent, the Documentation Agent, the Loan
Participants and each other Certificate Holder, and each of their
respective

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<PAGE> 12

Affiliates, successors, permitted assigns, directors, officers,
employees, servants and agents.

"Indenture Trustee" means the Indenture Trustee under the
Trust Indenture, and any entity which may from time to time be
acting as indenture trustee under the Trust Indenture.

"Indenture Trustee Documents" means the Participation
Agreement and the Trust Indenture.

"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft or the administration of the Trust
Estate pursuant to the Trust Indenture, (B) acts of the Indenture
Trustee not permitted by, or failure of the Indenture Trustee to
take any action required by, the Operative Documents to the extent
such acts arise or such failure arises from or constitutes gross
negligence or willful misconduct, (C) claims against the Indenture
Trustee relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 of the Participation
Agreement pursuant to said Section 7, or (D) claims against the
Indenture Trustee arising out of the transfer by the Indenture
Trustee of all or any portion of its interest in the Aircraft, the
Trust Estate, the Trust Indenture Estate or the Operative Documents
other than a transfer of the Aircraft pursuant to Section 9, 10 or
19 of the Lease or Article IV or V of the Trust Indenture, or a
transfer of the Aircraft pursuant to Section 15 of the Lease while
an Event of Default is continuing and prior to the time that the
Indenture Trustee has received all amounts due pursuant to the
Trust Indenture.

"Initial Installment" has the meaning set forth in Section
19(d) hereof.

"Interest Period" means Interest Period as defined in the
Trust Indenture.

"Interim Rent" means the rent payable for the Aircraft for the
Interim Term pursuant to Section 3(b) hereof.

"Interim Term" means the period commencing on the Delivery
Date and ending on and including the day immediately preceding the
Commencement Date unless earlier terminated in accordance with the
provisions hereof.

"Lease Agreement", "this Lease Agreement", "this Lease", "this
Agreement", "herein", "hereof", "hereunder", "hereby" or other like
words mean this Lease Agreement [NW 1996 B] as originally executed
or as modified, amended or supplemented pursuant to the applicable
provisions hereof and in accordance with the Trust Agreement and
the Trust Indenture, including, without limitation, supplementation
hereof by one or more Lease Supplements entered into pursuant to
the applicable provisions hereof.

- 7 -

<PAGE> 13

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

"Lease Period Date" means July 2, 1997 and each succeeding
January 2 and July 2, to and including the last such date in the
Term.

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

"Lessee Documents" means the Participation Agreement, the
Lease, the Lease Supplement covering the Aircraft, the Purchase
Agreement (insofar as it relates to the Aircraft), the FAA Bill of
Sale, the Bill of Sale, the Purchase Agreement Assignment and the
Tax Indemnity Agreement.

"Lessor Liens" means any Lien or disposition of title or
interest affecting or in respect of the Aircraft, the Airframe, any
Engine, this Lease or the Trust Estate arising as a result of (i)
claims against Lessor, First Security Bank of Utah, National
Association, in its individual capacity, or the Owner Participant
not related to the transactions contemplated by the Operative
Documents, (ii) any act or omission of the Owner Participant,
Lessor, or First Security Bank of Utah, National Association, in
its individual capacity, which is not related to the transactions
contemplated by the Operative Documents or is in violation of any
of the terms of the Operative Documents, (iii) claims against the
Owner Participant, Lessor, or First Security Bank of Utah, National
Association, in its individual capacity, with respect to Taxes or
Expenses against which Lessee is not required to indemnify the
Owner Participant, Lessor or First Security Bank of Utah, National
Association, in its individual capacity, pursuant to Section 7 of
the Participation Agreement or (iv) claims against Lessor or the
Owner Participant arising out of any transfer by Lessor or the
Owner Participant of all or any portion of the respective interests
of Lessor or the Owner Participant in the Aircraft, the Trust
Estate or the Operative Documents other than the transfer of
possession of the Aircraft by Lessor pursuant to this Agreement,
the transfer pursuant to the Trust Indenture or a transfer of the
Aircraft pursuant to Section 9, 10 or 19 hereof or pursuant to the
exercise of the remedies set forth in Section 15 hereof, provided,
however, that any Lien which is attributable solely to First
Security Bank of Utah, National Association or the Owner
Participant and would otherwise constitute a Lessor Lien hereunder
shall not constitute a Lessor Lien hereunder so long as (1) the
existence of such Lien poses no material risk of the sale,
forfeiture or loss of the Aircraft, (2) the existence of such Lien
does not interfere in any way with the use, possession, operation,
or

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<PAGE> 14

quiet enjoyment of the Aircraft by Lessee (or any Sublessee), (3)
the existence of such Lien does not affect the priority or
perfection of, or otherwise jeopardize, the Lien of the Trust
Indenture, (4) First Security Bank of Utah, National Association or
the Owner Participant, as appropriate, is diligently contesting
such Lien and (5) the existence of such Lien does not pose a
material threat of interference with the payment of Rent (other
than Excluded Payments in favor of First Security Bank of Utah,
National Association or the Owner Participant, as appropriate).

"Lessor's Cost" for the Aircraft means the amount denominated
as such in Exhibit B to the Lease.

"Lien" means any mortgage, pledge, lien, charge, claim, lease,
sublease, sub-sublease, security interest, or encumbrance of any
kind.

"Loan Participant" means each institution executing the
Participation Agreement as a Loan Participant, and its respective
successors and assigns, and any Certificate Holder; at any time
when there is only one Certificate Holder, "each Loan Participant"
shall mean such Certificate Holder.

"Loan Participant Liens" means any Lien which arises from acts
or claims against any Loan Participant not related to the
transactions contemplated by the Operative Documents.

"Loss Payment Date" has the meaning specified in Section 10(a)
hereof.

"Majority in Interest of Certificate Holders" has the meaning
assigned to that term in the Trust Indenture.

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

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

"Net Economic Return" shall have the meaning ascribed to such
term in paragraph 2 of Exhibit E to the Lease.

"Net Present Value of Rents" means the net present value, as
of the Delivery Date, of Basic Rent set forth in Exhibit B hereto,
Special Purchase Price and Remaining Installments, discounted at an
annual interest rate of 12.0 percent on a semi-annual basis.

"OECD" means the Organization for Economic Cooperation and
Development.

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<PAGE> 15

"Operative Documents" and "Operative Document" means each of
the Participation Agreement, the Lease, the Trust Indenture, the
Trust Agreement, an acceptance certificate covering the Aircraft in
the form agreed to by the Participants and Lessee, the Tax
Indemnity Agreement, the Lease Supplement covering the Aircraft,
the Trust Supplement covering the Aircraft, the Secured
Certificates, the Bill of Sale, the FAA Bill of Sale, the Purchase
Agreement (insofar as it relates to the Aircraft), the Guarantee,
the Purchase Agreement Assignment and the Consent and Agreement.

"Overall Transaction" means all the transactions contemplated
by the Operative Documents.

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

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

"Owner Trustee" means the entity executing the Participation
Agreement as Owner Trustee and any entity appointed as successor
Owner Trustee pursuant to Section 9.01 of the Trust Agreement, and
references to a predecessor Owner Trustee in its individual
capacity by name in the Operative Documents shall include such
successor Owner Trustee in its individual capacity from and after
such succession.

"Owner Trustee Documents" means the Participation Agreement,
the Trust Agreement, the Trust Supplement covering the Aircraft,
the Lease, the Lease Supplement covering the Aircraft, the Purchase
Agreement Assignment, the Trust Indenture and the Secured
Certificates.

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

"Participation Agreement" means that certain Participation
Agreement [NW 1996 B], dated as of the date hereof, among Lessee,
the Loan Participants, the Indenture Trustee, the Owner Participant
and Owner Trustee, as such Participation Agreement may be amended
or supplemented from time to time pursuant to the applicable
provisions thereof.

"Parties" means the Owner Trustee, the Indenture Trustee and
the Participants.

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<PAGE> 16

"Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of
whatever nature (other than (a) complete Engines or engines, (b)
any items leased by Lessee from a third party (other than Lessor)
and (c) cargo containers) which may from time to time be
incorporated or installed in or attached to the Airframe or any
Engine or so long as title thereto shall remain vested in Lessor in
accordance with Section 8 after removal therefrom.

"Past Due Rate" means (i) with respect to the portion of any
payment of Rent that may be required by the Trust Indenture to be
paid by the Indenture Trustee to the Loan Participants, or the
holders of any outstanding Secured Certificates, the "Past Due
Rate" as defined in the Trust Indenture and (ii) with respect to
the remaining portion of any payment of Rent (and the entire amount
of any payment of Rent after the satisfaction and discharge of the
Trust Indenture), a rate per annum equal to 1% over the Base Rate.

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

"Permitted Sublessee" means any manufacturer of airframes or
aircraft engines, any Affiliate of a manufacturer of airframes or
aircraft engines, or any foreign air carrier domiciled in a country
listed in Exhibit B to the Participation Agreement and regularly
engaged in the transportation of passengers or property by aircraft
or the transportation of mail by aircraft.

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

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

"Purchase Agreement" means the Purchase Agreement No. 1631,
dated December 1, 1989, between the Manufacturer and Lessee
relating to the purchase by Lessee of the Aircraft, as originally
executed or as modified, amended or supplemented in accordance with
the terms thereof, but only insofar as the foregoing relates to the
Aircraft.

"Purchase Agreement Assignment" means the Purchase Agreement
Assignment [NW 1996 B], dated as of the date hereof, between Lessee
and Lessor, as the same may be amended, supplemented or modified
from time to time, with a form of Consent and Agreement to be
executed by the Manufacturer attached thereto.

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

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<PAGE> 17

"Remaining Installments" has the meaning set forth in Section
19(d) hereof.

"Renewal Term" means any Fixed Renewal Term or Fair Market
Renewal Term as those terms are defined in Section 19 hereof.

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

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

"Secured Certificates" has the meaning assigned to that term
in the Trust Indenture.

"Special Purchase Price" shall mean the amount denominated as
such in Exhibit B hereto.

"Stipulated Loss Value" with respect to the Aircraft as of any
date through and including January 2, 2019, means, but subject
always to the provisions of Section 3(d)(v) hereof, the amount
determined by multiplying Lessor's Cost for the Aircraft by the
percentage specified in Exhibit C hereto opposite the Stipulated
Loss Value Date with respect to which the amount is determined (as
such Exhibit C may be adjusted from time to time as provided in
Section 3(d) hereof and in Section 7 of the Tax Indemnity
Agreement). To the extent that the actual amount of interest paid
and to be paid on the Secured Certificates during the Interim Term
or the Lease Period in which such Stipulated Loss Value Date occurs
up to and including such Stipulated Loss Value Date is greater or
less than the amount included in calculating the percentage set
forth in Exhibit C with respect to such Stipulated Loss Value Date
on account of such interest, the corresponding percentage set forth
in Exhibit C shall be adjusted appropriately to compensate for such
differential. "Stipulated Loss Value" as of any date after January
2, 2019 shall be the amount determined as provided in Section 19(a)
hereof.

"Stipulated Loss Value Date" means the 2nd calendar day of
each calendar month during the Interim Term, Basic Term and any
Renewal Term.

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

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

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<PAGE> 18

"Supplemental Rent" means all amounts, liabilities and
obligations (other than Interim Rent and Basic Rent) which Lessee
assumes or agrees to pay to Lessor or others hereunder, under the
Participation Agreement, under the Tax Indemnity Agreement or under
any of the other Operative Documents. The parties acknowledge that
Supplemental Rent is a general category and, accordingly, agree
that any provision of any Operative Document which calls for the
payment of Supplemental Rent and also calls for the payment of
specific items which are includable in Supplemental Rent is not to
be interpreted as requiring any double payment.

"Tax Indemnitee" means the Owner Participant, the Owner
Trustee, in its individual capacity and as trustee under the Trust
Agreement, the Trust Estate, the Indenture Trustee, the Loan
Participants and each other Certificate Holder, and each of their
respective Affiliates, successors and permitted assigns and, in the
case of the Owner Participant, directors, officers, employees,
servants and agents of the Owner Participant.

"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement [NW 1996 B], dated as of the date hereof, between the
Owner Participant and Lessee, as originally executed or as
modified, amended or supplemented pursuant to the applicable
provisions thereof.

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

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

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

"Termination Value" with respect to the Aircraft as of any
date through and including January 2, 2019, means, but subject
always to the provisions of Section 3(d)(v) hereof, the amount
determined by multiplying Lessor's Cost for the Aircraft by the
percentage specified in Exhibit D hereto opposite the Termination
Date with respect to which the amount is determined (as such
Exhibit D may be adjusted from time to time as provided in Section
3(d) hereof and in Section 7 of the Tax Indemnity Agreement). In
the event that the Termination Date with respect to which
Termination Value is determined is a date on which Basic Rent is
payable in advance as indicated on Exhibit B, to the extent that
the actual amount of interest paid and to be paid on the Secured

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<PAGE> 19

Certificates during the Lease Period ending on such Termination
Date is greater or less than the amount included in calculating the
corresponding percentage set forth in Exhibit D with respect to
such Termination Date on account of such interest, the
corresponding percentage set forth in Exhibit D shall be adjusted
appropriately to compensate for such differential.

"Transaction Expenses" means: (i) the reasonable and actual
fees, expenses and disbursements of (1) Bingham, Dana & Gould LLP,
special counsel for the Indenture Trustee, such information to be
furnished by the Indenture Trustee, (2) Ray, Quinney & Nebeker,
special counsel for the Owner Trustee under the Trust Agreement,
such information to be furnished by the Owner Trustee, (3) Vedder,
Price, Kaufman & Kammholz, special counsel to the Loan
Participants, such information to be furnished by the Documentation
Agent, (4) Cadwalader, Wickersham & Taft, special counsel to Lessee
and Guarantor, such information to be furnished by Lessee, and (5)
Crowe & Dunlevy, P.C., 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 the 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 the
Indenture Trustee under the Trust Indenture, such information to be
furnished by the Indenture Trustee, (v) the fee of BK Associates,
Inc. (or of such other appraiser as shall be acceptable to Lessee
and the Owner Participant) with respect to the appraisals of the
Aircraft pursuant to Sections 4(a)(xx) and 4(a)(xxix) of the
Participation Agreement, such information to be furnished by the
Owner Participant, (vi) the reasonable and actual fees, expenses
and disbursements of Fulbright & Jaworski L.L.P., special counsel
to the Owner Participant, such information to be furnished by the
Owner Participant, (vii) the equity placement fee and reasonable
disbursements of Babcock and Brown Financial Corporation, such
information to be furnished by Lessee, and (viii) the fee payable
to the Loan Participants on the Delivery Date.

"Transition Date" means the date designated as such in Exhibit
B hereto.

"Trust Agreement" means that certain Trust Agreement [NW 1996
B], dated as of the date hereof, between the Owner Participant and
First Security Bank of Utah, National Association, in its
individual capacity, as originally executed or as modified, amended
or supplemented pursuant to the applicable provisions thereof,
including, without limitation, supplementation thereof by one or
more Trust Supplements entered into pursuant to the applicable
provisions thereof.

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<PAGE> 20

"Trust Estate" means the Trust Estate as that term is defined
in the Trust Agreement.

"Trust Indenture" means that certain Trust Indenture and
Security Agreement [NW 1996 B], dated as of the date hereof,
between Lessor and the Indenture Trustee, as originally executed or
as modified, amended or supplemented in accordance with the
provisions thereof.

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

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

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

SECTION 2. ACCEPTANCE AND LEASE. Lessor hereby agrees (subject to
satisfaction of the conditions set forth in Section 4(a) of the Participation
Agreemen to accept the transfer of title from and simultaneously to lease to
Lessee henderunder, and Lessee hereby agrees (subject to satisfaction of the
condition set forth in Section 4(b) of the Participation Agreement) to lease
from Lessor hereunder, the Aircraft as evidenced by the execution by Lessor and
Lessee of a Lease Supplement leasing the Aircraft hereunder. Lessee hereby
agrees that such acceptance of the Aircraft by Lessor shall, without further
act, irrevocably constitute acceptance by Lessee of such Aircraft for all
purposes of this Lease.

SECTION 3. TERM AND RENT. (a) Interim Term and Basic Term. The
Interim Term shall commence on the Delivery Date and end on and include the day
immediately preceding the Commencement Date unless earlier terminated pursuant
to the provisions hereof. The Basic Term shall commence on the Commencement
Date and on January 2019, or such earlier date as this Lease may be terminated
in accordance with the provisions hereof.

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<PAGE> 21

(b) Interim Rent. Lessee shall pay Interim Rent on the Commencement
Date in an amount equal to Lessor's Cost multiplied by the percentage specified
in Exhibit B hereto for Interim Rent on the Commencement Date.

Although the Interim Rent percentage set forth in Exhibit B hereto has
been compd on the assumption that the rate of interest on the Secured Certifica
will be the Assumed Interest Rate, Lessor and Lessee recognize that the ual
rate of interest on the Secured Certificates may be a rate from time to t which
may be greater or less than the Assumed Interest Rate and that the ated basis
upon which interest on the Secured Certificates will be computed l be as
provided in the Trust Indenture. Accordingly, the Interim Rent paya on the
Commencement Date shall be increased or decreased (but not below zerby the
difference between (i) the aggregate amount of interest due and payable on the
Secured Certificates on the Commencement Date relating to the period from the
Transition Date to but excluding the Commencement Date and (ii) the aggregate
amount of interest on the Secured Certificates that would have been due and
payable on the Secured Certificates on the Commencement Date relating the
period from the Transition Date to the Commencement Date if such Secured
Certificates had borne interest at the Assumed Interest Rate. If the
amount determined in accordance with clause (i) of the preceding sentence shall
be greater than the amount determined in accordance with clause (ii) of such
sentence, the amount of Interim Rent payable on the Commencement Date shall be
increased by such difference. If the amount determined in accordance with
clause (i) of the preceding sentence shall be less than the amount determined
accordance with clause (ii) of such sentence, the amount of Interim Rent pay-
able on the Commencement Date shall be decreased (but not below zero) by such
difference.

(c) Basic Rent. Lessee shall pay Basic Rent with respect to each Lease
Period during the Basic Term on each Lease Period Date during the Basic Term, in
consecutive installments in the amounts as provided in the next sentence, each
such installment to cover the Lease Period specified in Exhibit B. Each such
installment of Basic Rent shall be equal to Lessor's Cost multiplied by the
percentage for the applicable Lease Period Date specified in Exhibit B hereto.

Although the Basic Rent percentages set forth in Exhibit B hereto have
been computed on the assumption that the rate of interest on the Secured
Certificates throughout the Term will be 6.50% per annum, computed on the basis
of a 360-day year of twelve 30-day months (the "ASSUMED INTEREST RATE"), Lessor
and Lessee recognize that the actual rate of interest on the Secured
Certificates may be a rate from time to time which may be greater or less than
the Assumed Interest Rate and that the related basis upon which interest on the
Secured Certificates will be computed will be as provided in the Trust
Indenture. Accordingly, each installment of Basic Rent shall be increased or
decreased (but not below zero), as the case may be, by the Rent Differential
Amount (as defined herein). For purposes hereof, "RENT DIFFERENTIAL AMOUNT"
shall mean, as of any Lease Period Date with respect to the Basic Term, the
difference between (i) the aggregate amount of interest due and payable on such
Lease Period Date on the Secured Certificates, and (ii) the aggregate amount of
interest on the Secured Certificates that would have been due and payable on
such Lease Period Date if

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<PAGE> 22

such Secured Certificates had borne interest at the Assumed Interest Rate, in
each case for the period from and including the Lease Period Date (or the
Commencement Date in the case of the first Lease Period) next preceding
such Lease Period Date to but excluding such Lease Period Date. If, as of any
Lease Period Date, the amount determined in accordance with clause (i) of the
immediately preceding sentence shall be greater than the amount determined in
accordance with clause (ii) of such sentence, the amount of Basic Rent payable
on such Lease Period Date shall be increased by the Rent Differential Amount.
If, as of any Lease Period Date, the amount determined in accordance with such
clause (ii) shall exceed the amount determined in accordance with such clause
(i), the amount of Basic Rent due on such Lease Period Date shall be decreased
(but not below zero) by the Rent Differential Amount.

(d) Adjustments to Basic Rent.

(i) In the event that (A) the Delivery Date occurs other than
on April 30, 1996, or (B) Transaction Expenses paid by Lessor
pursuant to Section 16(a) 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 Exhibit B and Stipulated Loss Value percentages
set forth in Exhibit C, the Termination Value percentages set forth in
Exhibit D, the Special Purchase Price (subject to clause (vii) below),
the Initial Installment and the Remaining Installments shall be
recalculated by the Owner Participant, on or prior to November 15, 1996
using the same methods and assumptions used to calculate original Basic
Rent, Stipulated Loss Value and Termination Value percentages, the
Special Purchase Price, the Initial Installment and the Remaining
Installments, 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) (A) In the event of a refinancing as contemplated by
Section 17 of the Participation Agreement, then the Basic Rent
percentages set forth in Exhibit B and Stipulated Loss Value
percentages set forth in Exhibit C, the Termination Value percentages
set forth in Exhibit D, the Special Purchase Price, the Initial
Installment and the Remaining Installments shall be recalculated
(upwards or, subject to clause (vii) below, 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 and (B) in the event that Lessee elects to satisfy any
indemnity obligation under the Tax Indemnity Agreement pursuant to
Section 4(e)(ii) of the Tax Indemnity Agreement, then the Basic Rent
percentages set forth in Exhibit B and the Stipulated Loss Value
percentages set forth in Exhibit C, the Termination Value percentages
set forth in Exhibit D, the Special Purchase Price, the Initial
Installment and the Remaining Installments shall be recalculated
(upwards or, subject to clause (vii) below, downwards) by Owner
Participant, using the same methods and assumptions (except to the
extent such assumptions shall be varied

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<PAGE> 23

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,
the Special Purchase Price, the Initial Installment and the Remaining
Installments 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.

(iii) Whenever Basic Rent is recalculated pursuant to this
Section 3(d), the Owner Participant shall redetermine the Excess Amount
set forth in Exhibit B in a manner consistent with such recalculation.
In addition, (X) any recalculation of Basic Rent, Stipulated Loss Value
or Termination Value percentages made pursuant to this Section 3(d)
shall take into account any decrease in the Excess Amount with respect
to the Transition Date required by the proviso to the definition of
"Excess Amount", (Y) after January 2, 1997 but prior to July 2, 1997,
the Basic Rent percentages set forth in Exhibit B, the Stipulated Loss
Value percentages set forth in Exhibit C and the Termination Value
percentages set forth in Exhibit D shall be recalculated to take into
account any decrease in Excess Amount with respect to the Transition
Date that has not theretofore been taken into account in accordance with
clause (X) of this sentence, and (Z) at the time of any payment of
Stipulated Loss Value or Termination Value, the Stipulated Loss Value
percentage set forth in Exhibit C or the Termination Value percentage
set forth in Exhibit D, by reference to which the amount of such payment
is determined shall be recalculated to take into account any decrease in
the Excess Amount with respect to the Transition Date that has not
theretofore been taken into account in accordance with clause (X) or
clause (Y) of this sentence.

(iv) Any recalculation of Basic Rent, Excess Amount,
Stipulated Loss Value and Termination Value percentages, Special
Purchase Price, Initial Installment and Remaining Installments pursuant
to this Section 3(d) shall be determined by the Owner Participant and
shall be subject to the verification procedures set forth in Exhibit E
hereto. Such recalculated Basic Rent, Excess Amount, Stipulated Loss
Value and Termination Value percentages, Special Purchase Price, Initial
Installment and Remaining Installments shall be set forth in a Lease
Supplement or an amendment to this Lease.

(v) Anything contained in the Participation Agreement or this
Lease to the contrary notwithstanding, each installment of Interim Rent
and Basic Rent payable hereunder, whether or not adjusted in accordance
with this Section 3(d), shall, together with the amount of the Excess
Amount in respect of the date on which such installment is payable, and
each payment of Termination Value and Stipulated Loss Value, whether or
not adjusted in accordance with this Section

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<PAGE> 24
3(d), shall, together with all other amounts (including an amount equal
to the premium, if any, payable by Lessor on the Secured Certificates)
payable simultaneously by Lessee pursuant to this Lease, in each case
be, under any circumstances and in any event, in an amount at least
sufficient to pay in full, on the date on which such amount of Rent is
due, any payments then required to be made on account of the principal
of, premium, if any, and interest on the Secured Certificates. It is
agreed that no installment of Interim Rent, Basic Rent or payment of
Termination Value or Stipulated Loss Value shall be increased or
adjusted by reason of (i) any attachment or diversion of Rent on account
of Lessor Liens, (ii) any modification of the payment terms of the
Secured Certificates made without the prior written consent of Lessee or
(iii) the acceleration of any Secured Certificate or Secured
Certificates due to the occurrence of an "Event of Default" (as defined
in the Trust Indenture) which does not constitute an Event of Default
hereunder.

(vi) All adjustments to Basic Rent under this Section 3(d)
shall be (A) in compliance with the tax law as then in effect,
including, without limitation, Rev. Proc. 75-28 as amended and then in
effect (or any successor thereto) and no such adjustment shall cause the
Lease to constitute a "disqualified leaseback or long-term agreement"
within the meaning of Section 467 of the Internal Revenue Code of 1986,
as amended, and any regulations thereunder, except to the extent that on
the Delivery Date the Lease constituted a "disqualified leaseback or
long-term agreement" under Section 467 of the Code on the Delivery Date
or was not in compliance with Rev. Proc. 75-28 and without regard to any
adjustments to Basic Rent occurring after such date and (B) subject
to verification pursuant to Exhibit E.

(vii) Notwithstanding the foregoing, no adjustment effected
pursuant to this Section 3(d) shall result in the Special Purchase
Price being decreased below $27,536,250.00.

(e) Supplemental Rent. Lessee shall pay (or cause to be paid) promptly
to Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental
Rent constituting Stipulated Loss Value, Termination Value or Special Purchase
Price as the same shall become due and owing and all other amounts of
Supplemental Rent within five days after demand or within such other relevant
period as may be provided in any Operative Document, and in the event of any
failure on the part of Lessee to pay any Supplemental Rent when due, Lessor
shall have all rights, powers and remedies provided for herein or in any other
Operative Document or by law or equity or otherwise in the case of nonpayment of
Basic Rent. Lessee shall pay as Supplemental Rent when due any amount of
premium payable when due under the Trust Indenture and shall pay amounts equal
to the amounts payable pursuant to Section 2.16 and Section 11.02 of the Trust
Indenture, as and when the same shall become due and payable. Lessee also will
pay to Lessor, or to whomsoever shall be entitled thereto, on demand, as
Supplemental Rent, to the extent permitted by applicable law, interest at the
Past Due Rate on any part of any installment of Interim Rent and Basic Rent not
paid when due for any period
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<PAGE> 25

for which the same shall be overdue and on any payment of Supplemental Rent not
paid when due for the period until the same shall be paid.

(f) Payments in General. All payments of Rent shall be made directly by
Lessee (whether or not any Sublease shall be in effect) by wire transfer of
immediately available funds prior to 10:30 A.M., New York time, on the date of
payment, to Lessor at its account at First Security Bank of Utah, National
Association, 79 South Main Street, Salt Lake City, Utah 84111, ABA No.
124-000-12, Account No. 051-0922115, Attention: Corporate Trust Department,
Credit Northwest/NW 1996 B (or such other account of Lessor in the continental
United States as Lessor shall direct in a notice to Lessee at least 10 Business
Days prior to the date such payment of Rent is due); provided that so long as
the Trust Indenture shall not have been fully discharged, Lessor hereby
irrevocably directs and Lessee agrees, that, unless the Indenture Trustee shall
otherwise direct, all Rent payable to Lessor and assigned to the Indenture
Trustee pursuant to the Trust Indenture shall be paid prior to 10:30 A.M., New
York time, on the due date thereof in funds of the type specified in this
Section 3(f) directly to the Indenture Trustee at its account at State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, ABA
No. 011-00-0028, Account No. 9903-943-0, Attention: Corporate Trust Department,
Reference: Northwest/NW 1996 B (or such other account of the Indenture Trustee
in the continental United States as the Indenture Trustee shall direct in a
notice to Lessee at least 10 Business Days prior to the date such payment of
Rent is due). All payments of Supplemental Rent owing to the Indenture Trustee
or to a Loan Participant or any other Certificate Holder pursuant to the
Participation Agreement shall be made in Dollars in immediately available funds
prior to 10:30 A.M., New York time, on the due date thereof at the office of the
Indenture Trustee or at such other office of such other financial institution
located in the continental United States as the party entitled thereto may so
direct at least 10 Business Days prior to the due date thereof. All payments of
Supplemental Rent payable to the Owner Participant, to the extent that such
amounts constitute Excluded Payments (as defined in the Trust Indenture), shall
be made in Dollars in immediately available funds prior to 10:30 A.M., New York
time, on the due date thereof, to the account of the Owner Participant specified
in Schedule I to the Participation Agreement (or to such other account as may be
specified in writing by the Owner Participant from time to time).

Notwithstanding anything to the contrary contained herein, if any date
on which a payment of Rent 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 with the same force and effect as if made on such
scheduled date and (provided such payment is made on such next succeeding
Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date.

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<PAGE> 26

so paid (the amount of such Basic Rent to be prepaid by Lessee being herein
called "PREPAID RENT"); provided that Lessee shall, under all circumstances and
whether or not an Event of Default shall be continuing on the Transition Date,
pay as Basic Rent (and not as Prepaid Rent) on the Transition Date an amount
equal to the excess, if any, of the interest on the Secured Certificates
relating to the period from and including the Delivery Date to but excluding the
Transition Date over the Excess Amount payable on the Transition Date; provided,
further, that Lessee will also pay to the Indenture Trustee, on demand, as
Supplemental Rent, to the extent permitted by applicable law, interest at the
Past Due Rate in effect from time to time on any part of any Prepaid Rent and on
the amount, if any, payable pursuant to the immediately preceding proviso not
paid when due for any period for which the same shall be overdue. Lessor agrees
to reimburse Lessee in the manner provided in the following sentence for (x) the
Prepaid Rent so paid by Lessee, plus (y) any Supplemental Rent paid with respect
to Prepaid Rent by Lessee pursuant to this Section 3(g), plus (z) accrued
interest on the unreimbursed portion thereof at a rate equal to the Base Rate as
in effect from time to time plus 5% per annum from the date such amount is paid
by Lessee to but not including the date of each such reimbursement (such amounts
to be reimbursed being herein called the "REIMBURSEMENT AMOUNT"). Lessor shall
pay to Lessee, in funds of the type specified in Section 3(f) hereof, within
five days after Lessor, the Owner Participant and the Indenture Trustee shall
have received written notice from Lessee demanding payment, the Reimbursement
Amount. In addition, if, for any reason, Lessor shall fail to pay to Lessee the
Reimbursement Amount as above provided, Lessee shall be entitled to offsets
(without duplication) against each succeeding payment (other than as limited by
the proviso to this sentence) due from Lessee to Persons other than the Loan
Participants, the Indenture Trustee and the Owner Trustee in its individual
capacity (including, without limitation, Basic Rent, payments due under Section
9, 10, 15 and 19 hereof, payments due under the Tax Indemnity Agreement and
payments due to Persons other than the Loan Participants, the Indenture Trustee
and Lessor in its individual capacity under Section 7 of the Participation
Agreement), until Lessee has been fully reimbursed for the Reimbursement Amount;
provided, however, that in the case of any payment due from Lessee which is
distributable under the terms of the Trust Indenture, Lessee's right of offset
shall be limited to amounts distributable to Lessor thereunder. No such offset
or aggregate combined effect of separate offsets shall reduce the amount of any
installment of Interim Rent or Basic Rent to an amount insufficient, together
with the Excess Amount and all other amounts payable simultaneously by Lessee,
to pay in full the payments then required to be made on account of the principal
of and interest on (and premium, if any, due with respect to) the Secured
Certificates then outstanding.

SECTION 4. LESSOR'S REPRESENTATIONS AND WARRANTIES. LESSOR LEASES AND
LESSEE TAKES THE AIRCRAFT AND EACH PART THEREOF "AS-IS," "WHERE-IS." LESSEE HAS
SELECTED THE AIRCRAFT AND THE MANUFACTURER THEREOF AND NEITHER LESSOR, THE
INDENTURE TRUSTEE NOR ANY PARTICIPANT MAKES, HAS MADE OR SHALL BE DEEMED TO HAVE
MADE, AND EACH HEREBY EXPRESSLY DISCLAIMS AND WILL BE DEEMED TO HAVE EXPRESSLY
DISCLAIMED, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, WORKMANSHIP, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OR

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<PAGE> 27

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, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY
PART THEREOF, except that First Security Bank of Utah, National Association, in
its individual capacity, (i) represents and warrants that on the Delivery Date,
Lessor shall have received whatever title to the Aircraft was conveyed to it by
Lessee, (ii) represents and warrants that on the Delivery Date the Aircraft
shall be free of Lessor Liens (including for this purpose Liens that would be
Lessor Liens but for the proviso in the definition of Lessor Liens) attributable
to it, (iii) covenants that it will not, through its own actions or inactions,
interfere in Lessee's quiet enjoyment of the Aircraft during the Term, (iv)
agrees that it will not directly or indirectly create, incur, assume or suffer
to exist any Lessor Lien attributable to it on or with respect to the Airframe
or any Engine or any portion of the Trust Estate and (v) represents and warrants
that it is a Citizen of the United States without making use of a voting trust,
voting powers agreement or similar arrangement, and agrees that if at any time
it shall cease to be a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement it will promptly
resign as Owner Trustee (if and so long as such citizenship is necessary under
the Federal Aviation Act as in effect at such time or, if it is not necessary,
if and so long as the Owner Trustee's citizenship would have any material
adverse effect on the Loan Participants, the Owner Participant or Lessee),
effective upon the appointment of a successor Owner Trustee in accordance with
Section 9.01 of the Trust Agreement. None of the provisions of this Lease shall
be deemed to amend, modify or otherwise affect the representations, warranties
or other obligations (express or implied) of the Manufacturer, any subcontractor
or supplier of the Manufacturer with respect to the Airframe, the Engines or any
Parts, or to release the Manufacturer, or any such subcontractor or supplier,
from any such representation, warranty or obligation. Lessor covenants that
during the Term (so long as this Lease shall not have been declared (or deemed
to be declared) in default pursuant to Section 15 hereof) it will not, through
its own actions or inactions, interfere in the quiet enjoyment of the Aircraft
in accordance with the terms hereof by Lessee or any Sublessee and agrees that
it will not directly or indirectly create, incur, assume or suffer to exist any
Lessor Lien attributable to it on or with respect to the Airframe or any
Engine.

SECTION 5. RETURN OF THE AIRCRAFT. (a) Condition Upon Return. Unless
purchased by Lessee pursuant to Section 19 hereof, upon the termination of this
Lease at the end of the Basic Term or any Renewal Term or pursuant to Section
9(c) or 15, Lessee, at its own expense, will return the Airframe to Lessor at a
major airport in one of the forty-eight contiguous states of the United States
chosen by Lessee and reasonably acceptable to Lessor, and Lessee will give
Lessor at least fifteen (15) days' prior written notice of the place of such
return; provided, however, that if Lessor shall have made the request for
storage pursuant to Section 5(d) hereof, Lessee shall return the Airframe to
Lessor at the site of the storage at the end of the storage period, provided
that the return conditions shall be satisfied on the date the Aircraft is placed
in storage. At the time of such return, Lessee will, unless otherwise

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<PAGE> 28

requested by Lessor at least ninety (90) days prior to the return hereunder,
cause the Aircraft, if it is not then so registered, to be registered under the
laws of the United States with the Federal Aviation Administration in the name
of the Lessor or its designee, provided that Lessee shall be relieved of its
obligations under this sentence if such registration is prohibited by reason of
the failure of Lessor or its designee to be eligible on such date to own an
aircraft registered with the Federal Aviation Administration; the Airframe will
be fully equipped with the Engines (or other Pratt & Whitney Model PW2037
engines or two engines of the same or another manufacturer of not less than
equivalent utility, value and remaining useful life, and suitable for
installation and use on the Airframe without impairing the value, utility or
remaining useful life of the Aircraft; provided that both engines shall be of
the same make and model) duly installed thereon. Also, at the time of such
return, such Airframe and Engines or engines (i) shall be certified (or, if not
then registered under the Federal Aviation Act, shall be eligible for
certification) as an airworthy aircraft by the Federal Aviation Administration
consistent with use in domestic passenger service in the United States, (ii)
shall be free and clear of all Liens (other than Lessor Liens (including for
this purpose Liens which would be Lessor Liens but for the proviso in the
definition of Lessor Liens)) and rights of third parties under pooling,
interchange, overhaul, repair or other similar agreements or arrangements,
(iii) shall be in as good an operating condition as when delivered to Lessee
hereunder, ordinary wear and tear excepted, or, in the case of any such engines
owned by Lessee, shall have a value, utility and remaining useful life at least
equal to, and shall be in as good an operating condition as required by the
terms hereof with respect to, Engines constituting part of the Aircraft but not
then installed on the Airframe, and (iv) shall be in compliance with the return
conditions, if any, set forth in Exhibit F.

During the last six (6) months of the Term (unless Lessee shall have
elected to purchase the Aircraft or renew this Lease in accordance with the
terms of this Lease), with reasonable notice, Lessee will cooperate, and cause
any Sublessee to cooperate, in all reasonable respects with the efforts of
Lessor to sell or lease the Aircraft, including, without limitation, permitting
prospective purchasers or lessees to inspect fully the Aircraft and the records
relating thereto, provided that such cooperation shall not interfere with the
operation or maintenance of the Aircraft by Lessee or any Sublessee.

(b) Return of the Engines. In the event that any engine not owned by
Lessor shall be delivered with the returned Airframe as set forth in paragraph
(a) of this Section 5, Lessee, concurrently with such delivery, will, at no cost
to Lessor, furnish, or cause to be furnished, to Lessor a full warranty (as to
title) bill of sale including as to the absence of Liens other than Lessor Liens
(including for this purpose Liens that would be Lessor Liens but for the proviso
in the definition of Lessor Liens) with respect to each such engine, in form and
substance satisfactory to Lessor (together with an opinion of counsel to the
effect that such full warranty bill of sale has been duly authorized and
delivered and is enforceable in accordance with its terms and that such engines
are free and clear of Liens other than Lessor Liens (including for this purpose
Liens which would be Lessor Liens but for the proviso in the definition of
Lessor Liens), Loan Participant Liens and Indenture Trustee Liens), against
receipt from Lessor of a bill of sale or other instrument evidencing the
transfer, without recourse or warranty (except as to the absence of Lessor
Liens, including for this purpose

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<PAGE> 29

Liens that would be Lessor Liens but for the proviso in the definition of Lessor
Liens), by Lessor to Lessee or its designee of all of Lessor's right, title and
interest in and to any Engine constituting part of the Aircraft but not
installed on the Airframe at the time of the return of the Airframe.

(c) Fuel; Manuals. Upon the return of the Airframe upon any termination
of this Lease in accordance with paragraph (a) of this Section 5, (i) 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, as the case may be, and (ii) Lessee shall deliver
or cause to be delivered to Lessor all logs, manuals and data and inspection,
modification and overhaul records required to be maintained with respect thereto
under applicable rules and regulations of each country under the laws of which
the Aircraft has been registered during the period of operation thereof.

(d) Storage Upon Return. If, at least thirty (30) days prior to
termination of this Lease at the end of the Basic Term or any Renewal Term or
pursuant to Section 9(c), Lessee receives from Lessor a written request for
storage of the Aircraft upon its return hereunder, Lessee will provide Lessor,
or cause Lessor to be provided, with (i) free parking facilities for the
Aircraft (maintenance costs and other out-of-pocket costs other than parking
fees to be for the account of Lessor) for a period not exceeding thirty (30)
days commencing on the date of such termination and (ii) parking facilities for
the Aircraft (maintenance costs, other out-of-pocket costs and parking fees to
be for the account of Lessor) for a period not exceeding an additional thirty
(30) days commencing at the end of such initial thirty (30) day period, in each
case at a location in the continental United States selected by Lessee used as a
location for the parking or storage of aircraft; provided that Lessee shall have
no obligation to move the Aircraft from such location during the storage
periods. Lessee will maintain insurance for the Aircraft during such period not
exceeding sixty (60) days and be reimbursed by Lessor for the premiums thereon.

SECTION 6. LIENS. Lessee will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to the Aircraft, title
thereto or any interest therein or in this Lease, except (i) the respective
rights of Lessor as owner of the Aircraft and Lessee as herein provided, the
Lien of the Trust Indenture, and any other rights existing pursuant to the
Operative Documents, (ii) the rights of others under agreements or arrangements
to the extent permitted by the terms of Sections 7(b) and 8(b) hereof, (iii)
Lessor Liens (including for this purpose Liens that would be Lessor Liens but
for the proviso in the definition of Lessor Liens), Loan Participant Liens, and
Indenture Trustee's Liens, (iv) Liens for taxes of Lessee (or any Sublessee)
either not yet due or being contested in good faith by appropriate proceedings
so long as such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein or, so
long as any Secured Certificates shall be outstanding, adversely affect the Lien
of the Trust Indenture, (v) materialmen's, mechanics', workmen's, repairmen's,
employees' or other like Liens arising in the ordinary course of Lessee's (or,
if a Sublease is then in effect, the Sublessee's) business (including those
arising under maintenance agreements entered into in the ordinary course of
business) securing obligations that are not overdue for a period of more than

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<PAGE> 30

forty-five (45) days or are being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material risk of the
sale, forfeiture or loss of the Airframe or any Engine or any interest therein
or, so long as any Secured Certificates shall be outstanding, adversely affect
the Lien of the Trust Indenture, (vi) Liens arising out of any judgment or award
against Lessee (or any Sublessee), unless the judgment secured shall not, within
forty-five (45) days after the entry thereof, have been discharged, vacated,
reversed or execution thereof stayed pending appeal or shall not have been
discharged, vacated or reversed within forty-five (45) days after the expiration
of such stay so long as such judgment does not involve any material risk of the
sale, forfeiture or loss of the Aircraft, or any Engine or any interest therein,
and (vii) any other Lien with respect to which Lessee (or any Sublessee) shall
have provided a bond, cash collateral or other security adequate in the
reasonable opinion of Lessor. Lessee will promptly, at its own expense, take (or
cause to be taken) such actions as may be necessary duly to discharge any such
Lien not excepted above if the same shall arise at any time.

SECTION 7. REGISTRATION, MAINTENANCE AND OPERATION; POSSESSION AND
SUBLEASES; INSIGNIA. (a)(I) Registration and Maintenance. Lessee, at its own
cost and expense, shall (or shall cause any Sublessee to): (i) forthwith upon
the delivery thereof hereunder, cause the Aircraft to be duly registered in the
name of Lessor, and, subject to the second paragraph of this Section 7(a) and
Section 8(f) of the Participation Agreement, to remain duly registered in the
name of Lessor under the Federal Aviation Act, provided that Lessor shall
execute and deliver all such documents as Lessee (or any Sublessee) may
reasonably request for the purpose of effecting and continuing such
registration, and shall not register the Aircraft or permit the Aircraft to be
registered under any laws other than the Federal Aviation Act at any time except
as provided in Section 8(f) of the Participation Agreement and Lessee shall
cause the Trust Indenture to be duly recorded and maintained of record as a
first mortgage on the Aircraft; (ii) maintain, service, repair and overhaul (or
cause to be maintained, serviced, repaired and overhauled) the Aircraft so as to
keep the Aircraft in as good an operating condition as delivered to Lessee
hereunder, ordinary wear and tear excepted, and as may be necessary to enable
the applicable airworthiness certification for the Aircraft to be maintained in
good standing at all times (other than during temporary periods of storage in
accordance with applicable regulations or during maintenance or modification
permitted hereunder) under the Federal Aviation Act, except when all Boeing
757-200 aircraft powered by engines of the same type as those with which the
Airframe shall be equipped at the time of such grounding and registered in the
United States have been grounded by the FAA (although such certification need
actually be maintained only during such periods as the Aircraft is registered in
the United States), or the applicable laws of any other jurisdiction in which
the Aircraft may then be registered from time to time in accordance with Section
8(f) of the Participation Agreement, utilizing, except during any period that a
Sublease is in effect, the same manner and standard of maintenance, service,
repair or overhaul used by Lessee with respect to similar aircraft operated by
Lessee in similar circumstances and utilizing, during any period that a Sublease
is in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Sublessee with respect to similar aircraft operated by the
Sublessee in similar circumstances and without in any case discriminating
against the Aircraft by reason of its leased status; provided, however, that in
all circumstances the Aircraft shall be

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<PAGE> 31

maintained by Lessee (or any Sublessee) in accordance with maintenance standards
required by, or substantially equivalent to those required by, the FAA or the
central civil aviation authority of Canada, France, Germany, Japan, the
Netherlands or the United Kingdom; (iii) maintain or cause to be maintained all
records, logs and other materials required to be maintained in respect of the
Aircraft by the FAA or the applicable regulatory agency or body of any other
jurisdiction in which the Aircraft may then be registered (which records, logs
and other materials, as between Lessor and Lessee and all parties claiming
through Lessee, shall be the property of Lessor but shall be maintained by
Lessee during the Term and shall become the property of Lessee upon Lessee's
purchase of the Aircraft pursuant to the terms of this Lease or upon the
occurrence of an Event of Loss and Lessee's compliance with Section 10 hereof);
and (iv) promptly furnish or cause to be furnished to Lessor and the Owner
Participant such information as may be required to enable Lessor to file any
reports required to be filed by Lessor or the Owner Participant with any
governmental authority because of Lessor's ownership of the Aircraft. (II)
Operation. Lessee will not maintain, use, service, repair, overhaul or operate
the Aircraft (or permit any Sublessee to maintain, use, service, repair,
overhaul or operate the Aircraft) in violation of any law or any rule,
regulation, order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction, or in violation of any airworthiness
certificate, license or registration relating to the Aircraft issued by any such
authority, except to the extent Lessee (or, if a Sublease is then in effect, any
Sublessee) is contesting in good faith the validity or application of any such
law, rule, regulation or order in any reasonable manner which does not
materially adversely affect Lessor or its right, title and interest in the
Aircraft or, so long as any Secured Certificates shall be outstanding, the first
priority Lien of the Trust Indenture and does not involve any material risk of
sale, forfeiture or loss of the Aircraft or any material risk of civil liability
or any risk of criminal liability being imposed on Lessor or the Owner
Participant. Lessee will not operate the Aircraft, or permit any Sublessee to
operate the Aircraft, in any area excluded from coverage by any insurance
required by the terms of Section 11; provided, however, that the failure of
Lessee to comply with the provisions of this sentence shall not give rise to an
Event of Default hereunder where such failure is attributable to causes beyond
the reasonable control of Lessee (or any Sublessee) or to extraordinary
circumstances involving an isolated occurrence or series of incidents not in the
ordinary course of the regular operations of Lessee (or any Sublessee) and in
each case Lessee (or such Sublessee, as the case may be) is taking all
reasonable steps to remedy such failure as soon as is reasonably practicable.

At any time after the Depreciation Period, Lessor, upon compliance with
all of the terms of Section 8(f) of the Participation Agreement, shall, at the
request and sole expense of Lessee, cooperate with Lessee to take all actions
required to change the registration of the Aircraft to another country.

(b) Possession and Subleases. Lessee will not, without the prior
written consent of Lessor, sublease or otherwise in any manner deliver, transfer
or relinquish possession of the Airframe or any Engine or install or permit any
Engine to be installed on any airframe other than the Airframe or enter into any
Wet Lease; provided that, so long as no Default of the type referred to in
Section 14(a) or 14(e) or Event of Default shall have occurred and be continuing
at the time of such sublease, delivery, transfer or relinquishment of

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<PAGE> 32

possession or installation or such Wet Lease and no Default of the type
referred to in Section 14(b) shall have occurred and be continuing at the time
of such sublease, and so long as the action to be taken shall not deprive the
Indenture Trustee of the perfected first priority lien of the Trust Indenture
on the Airframe or (subject to the further proviso (B) to clause (i) of this
Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply
with the provisions of Sections 7(a) and 11 hereof, Lessee may, without the
prior written consent of Lessor:

(i) subject the Airframe and the Engines or engines then
installed thereon to normal interchange agreements or any Engine to
normal pooling or similar arrangements, in each case customary in
the airline industry and entered into by Lessee (or any Sublessee)
in the ordinary course of its business; provided that (A) no such
agreement or arrangement contemplates, requires or results in the
transfer of title to the Airframe, (B) if Lessor's title to any
Engine shall be divested under any such agreement or arrangement,
such divestiture shall be deemed to be an Event of Loss with
respect to such Engine and Lessee shall (or shall cause Sublessee
to) comply with Section 10(b) hereof in respect thereof, and (C)
any interchange agreement to which the Airframe may be subject
shall be with a U.S. Air Carrier or a foreign air carrier domiciled
in a country listed on Exhibit B to the Participation Agreement, in
either case not subject to a proceeding or final order under
applicable bankruptcy, insolvency or reorganization laws on the
date such interchange agreement is entered into;

(ii) deliver possession of the Airframe or any Engine to the
manufacturer thereof (or for delivery thereto) or to any
organization (or for delivery thereto) for testing, service,
repair, maintenance or overhaul work on the Airframe or Engine or
any part of any thereof or for alterations or modifications in or
additions to such Airframe or Engine to the extent required or
permitted by the terms of Section 8(c) hereof;

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

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<PAGE> 33

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

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

(vi) to the extent permitted by Section 8(b) hereof, subject
any appliances, Parts or other equipment owned by Lessor and
removed from the Airframe or any Engine to any pooling arrangement
referred to in Section 8(b) hereof;

(vii) subject (or permit any Sublessee to subject) the
Airframe or any Engine to the Civil Reserve Air Fleet Program
and transfer (or permit any Sublessee to transfer) possession of
the Airframe or any Engine to the United States of America or any
instrumentality or agency thereof pursuant to the Civil Reserve Air
Fleet Program, so long as Lessee (or any Sublessee) shall (A)
promptly notify Lessor upon subjecting the Airframe or any Engine
to the Civil Reserve Air Fleet Program in any contract year and
provide Lessor with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United States
Air Force to whom notice must be given pursuant to Section 15
hereof, and (B) promptly notify Lessor upon transferring possession
of the Airframe or any Engine to the United States of America or
any agency or instrumentality thereof pursuant to such program;

(viii) for a period not to extend beyond the end of the Term,
enter into a Wet Lease for the Airframe and Engines or engines then
installed thereon with any third party; provided that if Lessee (or
any Sublessee) shall enter into any Wet Lease for a period of more
than one year (including renewal options) Lessee shall provide
Lessor written notice of such Wet Lease (such notice to be

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<PAGE> 34

given prior to entering into such Wet Lease, if practicable, but in
any event promptly after entering into such Wet Lease);

(ix) for a period not to extend beyond the end of the Term,
transfer possession of the Airframe or any Engine to the United
States of America or any instrumentality or agency thereof pursuant
to a contract, a copy of which shall be provided to Lessor; or

(x) Lessee may, at any time, enter into any sublease with (1)
a U.S. Air Carrier, (2) any Person approved in writing by the Owner
Participant and the Indenture Trustee, in their sole discretion, or
(3) after the Depreciation Period, any Permitted Sublessee if (A)
in any such case, the Sublessee under such sublease is not subject
to a proceeding or final order under applicable bankruptcy,
insolvency or reorganization laws on the date such sublease is
entered into, (B) in the event that the Sublessee under such
sublease is a foreign air carrier or Person based in a country
other than the United States (other than a foreign air carrier
principally based in Taiwan), the United States maintains
diplomatic relations with the country in which such proposed
Sublessee is principally based at the time such sublease is entered
into (or, in the case of a sublease to a proposed Sublessee
principally based in Taiwan, maintains diplomatic relations at
least as good as those in effect on the Delivery Date) and (C) in
the event that the Sublessee under such sublease is a foreign air
carrier or Person based in a country other than the United States,
prior to the effectiveness of such sublease Lessor and the
Indenture Trustee shall have received an opinion (in form and
substance reasonably acceptable to Lessor) of counsel to Lessee
(reasonably acceptable to Lessor) to the effect that (I) the terms
of the proposed sublease will be legal, valid, binding and (subject
to customary exceptions) enforceable against the proposed Sublessee
in the country in which the proposed Sublessee is principally
based, (II) there exist no possessory rights in favor of the
Sublessee under such Sublease under the laws of such Sublessee's
country of domicile that would, upon bankruptcy or insolvency of or
other default by Lessee and assuming at such time such Sublessee is
not insolvent or bankrupt, prevent the return or repossession of
the Aircraft in accordance with the terms of this Lease, (III) the
laws of such Sublessee's country of domicile require fair
compensation by the government of such jurisdiction payable in
currency freely convertible into Dollars for the loss of
use of the Aircraft in the event of the requisition by such
government of such use, (IV) the laws of such Sublessee's country
of domicile would give recognition to Lessor's title to the
Aircraft, to the registry of the Aircraft in the name of Lessor (or
Lessee, as "lessee", or the proposed Sublessee, as "sublessee", as
appropriate) and to the Lien of the Trustee Indenture, and (V) all
filings, if any, required to be made in such jurisdiction in
connection with the execution of such sublease in order to protect
the interest of Lessor in the Aircraft have been made, provided,
however, that no sublease entered into pursuant to this clause (x)
shall extend beyond the expiration of the Basic Term

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<PAGE> 35

or any Renewal Term then in effect unless Lessee shall have
irrevocably committed to purchase the Aircraft.

The rights of any Sublessee or other transferee who receives possession
by reason of a transfer permitted by this paragraph (b) (other than the
transfer of an Engine which is deemed an Event of Loss) shall be effectively
subject and subordinate to, and any Sublease permitted by this paragraph (b)
shall be expressly subject and subordinate to, all the terms of this Lease and
to the Lien of the Trust Indenture, including, without limitation, the
covenants contained in Section 7(a) hereof and Lessor's rights to repossession
pursuant to Section 15 hereof and to avoid such Sublease upon such
repossession, and Lessee shall remain primarily liable hereunder for the
performance of all of the terms of this Lease to the same extent as if such
Sublease or transfer had not occurred, and the terms of any such Sublease shall
not permit any Sublessee to take any action not permitted to be taken by Lessee
in this Lease with respect to the Aircraft. No pooling agreement, sublease or
other relinquishment of possession of the Airframe or any Engine or Wet Lease
shall in any way discharge or diminish any of Lessee's obligations to Lessor
hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any
sublease permitted under Section 7(b) shall expressly prohibit any further
sub-sublease by the Sublessee. Lessor agrees, for the benefit of Lessee (and
any Sublessee) and for the benefit of any mortgagee or other holder of a
security interest in any engine (other than an Engine) owned by Lessee (or any
Sublessee), any lessor of any engine (other than an Engine) leased to Lessee
(or any Sublessee) and any conditional vendor of any engine (other than an
Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale
agreement or any other security agreement, that no interest shall be created
hereunder in any engine so owned, leased or purchased and that none of Lessor,
its successors or assigns will acquire or claim, as against Lessee (or any
Sublessee) or any such mortgagee, lessor or conditional vendor or other holder
of a security interest or any successor or assignee of any thereof, any right,
title or interest in such engine as the result of such engine being installed
on the Airframe; provided, however, that such agreement of Lessor shall not be
for the benefit of any lessor or secured party of any airframe (other than the
Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any
Sublessee) subject to a conditional sale or other security agreement or for the
benefit of any mortgagee of or any other holder of a security interest in an
airframe owned by Lessee (or any Sublessee), unless such lessor, conditional
vendor, other secured party or mortgagee has expressly agreed (which agreement
may be contained in such lease, conditional sale or other security agreement or
mortgage) that neither it nor its successors or assigns will acquire, as
against Lessor, any right, title or interest in an Engine as a result of such
Engine being installed on such airframe. Lessee shall provide to the Owner
Participant and the Indenture Trustee (i) written notice of any Sublease to a
U.S. Air Carrier hereunder (such notice to be given not later than five days
prior to entering into such Sublease, if practicable, but in any event promptly
after entering into any such Sublease) and written notice of any Sublease to a
Permitted Sublessee hereunder (such notice to be given not later than ten (10)
days prior to entering into such Sublease) and (ii) a copy of each Sublease
which has a term of more than three months. Lessee shall pay all reasonable
fees and expenses of Lessor and the Owner Participant (including its counsel)
in connection with any sublease or proposed sublease under Section 7(b)(x).

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<PAGE> 36

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

Leased From

First Security Bank of Utah, National Association, as Owner Trustee,

Lessor

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

Mortgaged To

State Street Bank and Trust Company,

as Indenture Trustee

(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Lessor or successor Indenture Trustee, in each case as
permitted under the Operative Documents). Except as above provided, Lessee
will not allow the name of any Person to be placed on the Airframe or on any
Engine as a designation that might be interpreted as a claim of ownership;
provided that nothing herein contained shall prohibit Lessee (or any Sublessee)
from placing its customary colors and insignia on the Airframe or any Engine.

SECTION 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS
AND ADDITIONS. (a) Replacement of Parts. Lessee, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time to
time be incorporated or installed in or attached to the 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, except as otherwise provided in paragraph (c) of this
Section 8 or if the Airframe or an Engine to which a Part relates has suffered
an Event of Loss. In addition, Lessee (or any Sublessee) may, at its own cost
and expense, remove 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 that Lessee (or any Sublessee), except as otherwise
provided in paragraph (c) of this Section 8, will, at its own cost and expense,
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 paragraph (b) of this Section 8 and except in the
case of replacement property temporarily installed on an emergency basis) and
shall be in as good operating condition as, and shall have a value and utility
at least equal to, the Parts replaced assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof. Except as
otherwise provided in paragraph (c) of this Section 8, all Parts at any time
removed from the Airframe or any Engine shall remain the property of Lessor, no
matter where located, until

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<PAGE> 37

such time as such Parts shall be replaced by Parts which have been
incorporated or installed in or attached to the Airframe or such Engine and
which meet the requirements for replacement Parts specified above. Immediately
upon any replacement part becoming incorporated or installed in or attached to
the Airframe or any Engine as above provided, without further act (subject only
to Permitted Liens and any pooling arrangement to the extent permitted by
paragraph (b) of this Section 8 and except in the case of replacement property
temporarily installed on an emergency basis), (i) title to such replacement Part
shall thereupon vest in Lessor, (ii) such replacement Part shall become subject
to this Lease and be deemed part of the Airframe or such Engine for all purposes
hereof to the same extent as the Parts originally incorporated or installed in
or attached to the Airframe or such Engine, and (iii) title to the replaced Part
shall thereupon vest in Lessee (or, if a Sublease is then in effect, any
Sublessee), free and clear of all rights of Lessor, and shall no longer be
deemed a Part hereunder. Lessee represents and warrants that on the Delivery
Date no appliance, part, instrument, appurtenance, accessory, furnishing or
other equipment on the Aircraft which is necessary for navigation of the
Aircraft has been leased from any Person other than Lessor.

(b) Pooling of Parts. Any Part removed from the Airframe or any Engine
as provided in paragraph (a) of this Section 8 may be subjected by Lessee (or
any Sublessee) to a normal pooling arrangement customary in the airline
industry of which Lessee (or, if a Sublease is then in effect, any Sublessee)
is a party entered into in the ordinary course of Lessee's (or any Sublessee's)
business; provided that the Part replacing such removed Part shall be
incorporated or installed in or attached to such Airframe or Engine in
accordance with such paragraph (a) 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 in accordance with such
paragraph (a) may be owned by any third party subject to such a normal pooling
arrangement, provided that Lessee (or any Sublessee), at its expense, as
promptly thereafter as practicable, either (i) causes title to such replacement
Part to vest in Lessor in accordance with such paragraph (a) by Lessee (or any
Sublessee) acquiring title thereto for the benefit of, and transferring such
title to, Lessor free and clear of all Liens except Permitted Liens (other than
pooling arrangements) or (ii) replaces such replacement Part by incorporating
or installing in or attaching to the Airframe or Engine a further replacement
Part owned by Lessee (or any Sublessee) free and clear of all Liens except
Permitted Liens (other than pooling arrangements) and by causing title to such
further replacement Part to vest in Lessor in accordance with such paragraph
(a).

(c) Alterations, Modifications and Additions. Lessee, at its own
expense, will make (or cause to be made) such alterations and modifications in
and additions to the Airframe and Engines as may be required from time to time
to meet the applicable standards of the FAA or any applicable regulatory agency
or body of any other jurisdiction in which the Aircraft may then be registered
as permitted by Section 8(f) of the Participation Agreement regardless of upon
whom nominally imposed; provided, however, that Lessee (or, if a Sublease is
then in effect, any Sublessee) may, in good faith, contest the validity or
application of any such law, rule, regulation or order in any reasonable manner
which does not materially adversely affect Lessor or its right, title and
interest in the Aircraft or, so long as any Secured Certificates are
outstanding, the Indenture Trustee and does not involve any material risk of

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sale, forfeiture or loss of the Aircraft or any material risk of civil liability
or any risk of criminal liability being imposed on Lessor; provided further,
that no appliance, part, instrument, appurtenance, accessory, furnishing or
other equipment of whatever nature relating to such alteration, modification or
addition may be leased from any Person other than Lessor. In addition, Lessee
(or any Sublessee), at its own expense, may from time to time add further parts
or accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Lessee (or any Sublessee) may deem desirable in
the proper conduct of its business, including, without limitation, removal of
Parts which Lessee (or any Sublessee) has determined in its reasonable judgment
to be obsolete or no longer suitable or appropriate for use on the Airframe or
such Engine (such parts, "OBSOLETE PARTS"); provided that no such alteration,
modification or addition shall diminish the value, utility or remaining useful
life of the Airframe or such Engine below the value, utility or remaining
useful life thereof immediately prior to such alteration, modification or
addition, assuming the Airframe or such Engine was then in the condition
required to be maintained by the terms of this Lease, except that the value (but
not the utility or remaining useful life) of the Airframe or any Engine may be
reduced by the value of Obsolete Parts which shall have been removed so long as
the aggregate original cost of all Obsolete Parts which shall have been removed
and not replaced shall not exceed $400,000. Title to all Parts incorporated or
installed in or attached or added to the Airframe or an Engine as the result of
such alteration, modification or addition (the "ADDITIONAL PARTS") shall,
without further act, vest in Lessor. Notwithstanding the foregoing sentence,
Lessee (or any Sublessee) may remove or suffer to be removed any Additional
Part, provided that such Additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine at the time of delivery
thereof hereunder or any Part in replacement of, or substitution for, any such
Part, (ii) is not required to be incorporated or installed in or attached or
added to the Airframe or any Engine pursuant to the terms of Section 7 hereof or
the first sentence of this paragraph (c) and (iii) can be removed from the
Airframe or such Engine without diminishing or impairing the value, utility or
remaining useful life which the Airframe or such Engine would have had at the
time of removal had such alteration, modification or addition not occurred,
assuming that such Airframe or Engine was in the condition and repair required
to be maintained by the terms hereof. Upon the removal by Lessee (or
Sublessee) of any Part as provided above, title thereto shall, without further
act, vest in Lessee (or any Sublessee, as the case may be) and such Part shall
no longer be deemed part of the Airframe or Engine from which it was removed.
Any Part not removed by Lessee (or any Sublessee) as above provided prior to the
return of the Airframe or Engine to Lessor hereunder shall remain the property
of Lessor.

SECTION 9. VOLUNTARY TERMINATION. (a) Termination Event. (1)
[Intentionally Omitted].

(2) Lessee shall have the right to elect to terminate this Lease on any
Lease Period Date occurring on or after the fifth anniversary of the Delivery
Date if Lessee shall have made the good faith determination, which shall be
evidenced by a resolution duly adopted by its Board of Directors (or the
Executive Committee thereof), that the Aircraft is obsolete or surplus to its
needs.

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<PAGE> 39

(3) Lessee shall give to Lessor at least ninety (90) days' and no more
than 365 days' revocable advance written notice of Lessee's intention to so
terminate this Lease (any such notice, a "TERMINATION NOTICE") specifying (i)
the Lease Period Date on which Lessee intends to terminate this Lease in
accordance with this Section 9 (such specified date, a "TERMINATION DATE") and
(ii) that Lessee has determined that the Aircraft is obsolete or surplus to its
needs. Any Termination Notice shall become irrevocable ten (10) days prior to
the Termination Date.

(b) [Intentionally Omitted].

(c) Optional Sale of the Aircraft. In the event that Lessee shall have
exercised its right to terminate this Lease under Section 9(a)(2), then during
the period from the giving of the notice referred to in Section 9(a)(3) until
the proposed Termination Date (unless Lessee shall have revoked the Termination
Notice specifying such proposed Termination Date), Lessee, as agent for Lessor
and at no expense to Lessor, shall use its best efforts to obtain bids in the
worldwide market for the purchase of the Aircraft and, in the event it receives
any bid, Lessee shall, within five Business Days after receipt thereof and at
least ten Business Days prior to the proposed Termination Date, certify to
Lessor in writing the amount and terms of such bid, and the name and address of
the party or parties (who shall not be Lessee or any Affiliate of Lessee or any
Person with whom Lessee or any such Affiliate has an arrangement or
understanding regarding the future use of the Aircraft by Lessee or any such
Affiliate but who may be the Owner Participant, any Affiliate thereof or any
Person contacted by the Owner Participant) submitting such bid. After Lessee
shall have certified to Lessor all bids received, the Owner Participant, any
Affiliate thereof or any Person contacted by the Owner Participant may submit a
further bid or bids to Lessee not later than five Business Days prior to the
Termination Date proposed by Lessee (unless Lessee shall have revoked the
Termination Notice specifying such proposed Termination Date). Subject to the
next succeeding sentence, on or before the Termination Date, subject to the
release of all mortgage and security interests with respect to the Aircraft
under the Trust Indenture: (1) Lessee shall deliver the Aircraft, or cause the
Aircraft to be delivered, to the bidder(s), if any, which shall have submitted
the highest bid therefor at least ten (or, in the case of the Owner Participant,
any Affiliate thereof, or Person contacted by the Owner Participant, five)
Business Days prior to such Termination Date, in the same manner and in the same
condition and otherwise in accordance with all the terms of this Lease as if
delivery were made to Lessor pursuant to Section 5, and shall duly transfer to
Lessor title to any engines not owned by Lessor all in accordance with the terms
of Section 5, (2) Lessor shall comply with the terms of the Trust Indenture
relating to the release of the Aircraft from the Lien of the Trust Indenture and
shall, without recourse or warranty (except as to the absence of Lessor Liens,
including for this purpose Liens that would be Lessor Liens but for the proviso
in the definition of Lessor Liens), subject to prior or concurrent payment by
Lessee of all amounts due under clause (3) of this sentence, sell all of
Lessor's right, title and interest in and to the Aircraft for cash in Dollars to
such bidder(s), the total sales price realized at such sale to be retained by
Lessor, and (3) Lessee shall simultaneously pay or cause to be paid to Lessor in
funds of the type specified in Section 3(f) hereof, an amount equal to the sum
of (A) the excess, if any, of (i) the Termination Value for the Aircraft,
computed as of the Termination Date, over (ii) the

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<PAGE> 40

net sale price of the Aircraft sold by Lessor after deducting the reasonable
expenses incurred by Lessor and the Owner Participant in connection with such
sale, and (B) all unpaid Basic Rent with respect to the Aircraft due prior to
such Termination Date and, if such Basic Rent is payable in arrears on such
Termination Date as indicated on Exhibit B, on such Termination Date, and all
unpaid Supplemental Rent due on or prior to the Termination Date with respect to
the Aircraft, including, without limitation, the premium and Funding Loss
Amount, if any, due on the Secured Certificates, and upon such payment Lessor
simultaneously will transfer to Lessee, without recourse or warranty (except as
to the absence of Lessor Liens, including for this purpose Liens that would be
Lessor Liens but for the proviso in the definition of Lessor Liens), all of
Lessor's right, title and interest in and to any Engines constituting part of
the Aircraft which were not sold with the Aircraft. Without duplication of any
amounts otherwise paid or withheld pursuant to the preceding sentence in the
event of a sale, Lessee agrees to pay all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable counsel fees and
disbursements) of Lessor and the Owner Participant in connection therewith.
Notwithstanding the second preceding sentence, Lessor may, if Lessee has not
revoked the Termination Notice, elect to retain title to the Aircraft. If
Lessor so elects, Lessor shall give to Lessee written notice of such election at
least five Business Days prior to the Termination Date accompanied by an
irrevocable undertaking by the Owner Participant to make available to the Lessor
for payment to the Indenture Trustee on the Termination Date the amount required
to pay in full the unpaid principal amount of the Secured Certificates
outstanding on the Termination Date plus interest accrued thereon through the
Termination Date and, without affecting the obligations of Lessee in respect of
such amounts under the second following sentence, together with the premium and
Funding Loss Amount, if any, due on the Secured Certificates. Upon receipt of
notice of such an election by Lessor and the accompanying undertaking by the
Owner Participant, Lessee shall cease its efforts to obtain bids as provided
above and shall reject all bids theretofore or thereafter received. On the
Termination Date, Lessor shall pay in full the unpaid principal amount of the
Secured Certificates outstanding on the Termination Date plus interest accrued
thereon through the Termination Date together with all premium and Funding Loss
Amount, if any, due on the Secured Certificates and, so long as the Secured
Certificates are paid as aforesaid, Lessee shall deliver the Airframe and
Engines or engines to Lessor in accordance with Section 5 and shall pay all
Basic Rent due prior to the Termination Date and, if such Basic Rent is payable
in arrears on such Termination Date as indicated on Exhibit B, on such
Termination Date, and all Supplemental Rent (other than Termination Value) due
on or prior to the Termination Date, including Supplemental Rent of the type
described in the second sentence of Section 3(e). If no sale shall have
occurred on the Termination Date and Lessor has not made the payment
contemplated by the preceding sentence and thereby caused this Lease to
terminate or if Lessee revokes its Termination Notice, this Lease shall continue
in full force and effect as to the Aircraft, Lessee shall pay the reasonable
costs and expenses (including reasonable counsel fees and disbursements)
incurred by the Owner Participant, the Indenture Trustee and Lessor (unless such
failure to terminate the Lease is a consequence of the failure of Lessor or the
Owner Participant without due cause to make, or cause to be made, the payment
referred to in the immediately preceding sentence, in which case Lessee shall
pay only the reasonable costs and expenses of the Indenture Trustee), if any, in
connection with preparation for such sale and Lessee may give one or more
additional Termination Notices in accordance with Section 9(a)(2), subject
to the last

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<PAGE> 41

sentence of this Section 9(c). In the event of any such sale or such retention
of the Aircraft by Lessor and upon compliance by Lessee with the provisions of
this paragraph, the obligation of Lessee to pay Basic Rent or any other amounts
hereunder (but without affecting the provisions of Section 7(b), 7(c) or 15(b)
of the Participation Agreement) shall cease to accrue and this Lease shall
terminate. Lessor may, but shall be under no duty to, solicit bids, inquire
into the efforts of Lessee to obtain bids or otherwise take any action in
connection with any such sale other than to transfer (in accordance with the
foregoing provisions) to the purchaser named in the highest bid certified by
Lessee to Lessor all of Lessor's right, title and interest in the Aircraft,
against receipt of the payments provided herein. Lessee may revoke a
Termination Notice given pursuant to Section 9(a)(2) no more than two times
during the Term.

(d) Termination as to Engines. So long as no Event of Default shall
have occurred and be continuing, Lessee shall have the right at its option at
any time during the Term, on at least thirty (30) days' prior written notice, to
terminate this Lease with respect to any Engine. In such event, and prior to
the date of such termination, Lessee shall replace such Engine hereunder by
complying with the terms of Section 10(b) to the same extent as if an Event of
Loss had occurred with respect to such Engine and shall indemnify the Owner
Participant for any adverse tax consequences resulting from such substitution,
and Lessor shall transfer such right, title and interest as it may have to the
replaced Engine as provided in Section 5(b). No termination of this Lease with
respect to any Engine as contemplated by this Section 9(d) shall result in any
reduction of Interim Rent or Basic Rent.

SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC. (a) Event of Loss
with Respect to the Aircraft. Upon the occurrence of an Event of Loss with
respect to the Airframe or the Airframe and the Engines and/or engines then
installed thereon, Lessee shall forthwith (and in any event, within fifteen (15)
days after such occurrence) give Lessor written notice of such Event of Loss,
and within forty-five (45) days after such Event of Loss Lessee shall give
Lessor written notice of its election to perform one of the following options
(it being agreed that if Lessee shall not have given such notice of election
within such period, Lessee shall be deemed to have elected the option set forth
in clause (i) below). Lessee may elect either to:

(i) make the payments specified in this clause (i), in which
event not later than the earlier of (x) the Business Day next
succeeding the 120th day following the occurrence of such Event of
Loss or (y) the third Business Day following the receipt of
insurance proceeds in respect of such occurrence (but not earlier
than thirty (30) days after such occurrence) (the "LOSS PAYMENT
DATE") Lessee shall pay or cause to be paid to Lessor in funds of
the type specified in Section 3(f) hereof, an amount equal to the
Stipulated Loss Value of the Aircraft corresponding to the
Stipulated Loss Value Date occurring on or immediately following
the Loss Payment Date; provided, however, that if the Commencement
Date or a Lease Period Date shall occur prior to the Loss Payment
Date with respect to which Stipulated Loss Value is determined,
Lessee shall pay on the Commencement Date or such Lease Period Date
an amount equal to the Interim Rent or Basic Rent that would have
been due on the

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<PAGE> 42

Commencement Date or such Lease Period Date if such Event of Loss
had not occurred, or

(ii) so long as no Default of the type referred to in Section
14(a), 14(b) or 14(e) or Event of Default shall have occurred and
be continuing, substitute an aircraft or an airframe or an airframe
and one or more engines, as the case may be;

provided that, if Lessee does not perform its obligation to effect such
substitution in accordance with this Section 10(a), during the period of time
provided herein, then Lessee shall pay or cause to be paid to Lessor on the
Business Day next succeeding the 120th day following the occurrence of such
Event of Loss the amount specified in clause (i) above.

At such time as Lessor shall have received the amounts specified in
subparagraph (i) above, together with all other amounts that then may be due
hereunder (including, without limitation, all Basic Rent due on or before the
Stipulated Loss Value Date by reference to which the Stipulated Loss Value is
calculated for the Loss Payment Date (excluding Basic Rent payable in advance on
such Stipulated Loss Value Date) and all Supplemental Rent, including of the
type described in the second sentence of Section 3(e)), under the Participation
Agreement and under the Tax Indemnity Agreement, (1) the obligation of Lessee to
pay the installments of Basic Rent, Supplemental Rent, Stipulated Loss Value,
Termination Value shall cease to accrue (but without affecting the provisions of
Section 7(b), 7(c) or 15(b) of the Participation Agreement), (2) this Lease
shall terminate, (3) Lessor will comply with the terms of the Trust Indenture
relating to the release of the Aircraft from the Lien of the Trust Indenture and
transfer to or at the direction of Lessee, without recourse or warranty (except
as to the absence of Lessor Liens, including for this purpose Liens that would
be Lessor Liens but for the proviso in the definition of Lessor Liens), all of
Lessor's right, title and interest in and to the Airframe and any Engines
subject to such Event of Loss, as well as any Engines not subject to such Event
of Loss, and furnish to or at the direction of Lessee a bill of sale in form and
substance reasonably satisfactory to Lessee (or any Sublessee), evidencing such
transfer, and (4) Lessee will be subrogated to all claims of Lessor, if any,
against third parties, for damage to or loss of the Airframe and any Engines
which were subject to such Event of Loss to the extent of the then insured value
of the Aircraft.

In the event Lessee shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Lessee
shall, at its sole expense, not later than the Business Day next succeeding the
120th day following the occurrence of such Event of Loss, (A) convey or cause to
be conveyed to Lessor and to be leased by Lessee hereunder, a Boeing model
aircraft (or a Boeing model airframe or a Boeing model airframe and one or more
engines which, together with the Engines constituting a part of the Aircraft but
not installed thereon at the time of such Event of Loss constitute the Aircraft)
free and clear of all Liens (other than Permitted Liens) and having a value,
utility and remaining useful life at least equal to the Aircraft subject to such
Event of Loss assuming that the Aircraft had been maintained in accordance with
this Lease; provided that any aircraft, airframe or engine so substituted
hereunder shall be of the same or improved model as those initially leased

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<PAGE> 43

hereunder and (B) prior to or at the time of any such substitution, Lessee (or
any Sublessee), at its own expense, will (1) furnish Lessor with a full warranty
bill of sale and a Federal Aviation Administration bill of sale, in form and
substance reasonably satisfactory to Lessor, evidencing such transfer of title,
(2) cause a Lease Supplement and a Trust Supplement to be duly executed by
Lessee and filed for recording pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Airframe may then be registered as permitted by Section 8(f) of the
Participation Agreement, (3) cause a financing statement or statements with
respect to such substituted property to be filed in such place or places as are
deemed necessary or desirable by Lessor to perfect its and the Indenture
Trustee's interest therein and herein, (4) furnish Lessor with such evidence of
compliance with the insurance provisions of Section 11 with respect to such
substituted property as Lessor may reasonably request, (5) furnish Lessor with
copies of the documentation required to be provided by Lessee pursuant to
Section 5.06 of the Trust Indenture in form and substance reasonably
satisfactory to Lessor, and Lessor simultaneously will comply with the terms of
the Trust Indenture relating to the release of the Aircraft from the Lien of the
Trust Indenture and transfer to or at the direction of Lessee, without recourse
or warranty (except as to the absence of Lessor Liens, including for this
purpose Liens that would be Lessor Liens but for the proviso in the definition
of Lessor Liens), all of Lessor's right, title and interest, if any, in and to
the Aircraft or the Airframe and one or more Engines, as the case may be, with
respect to which such Event of Loss occurred and furnish to or at the direction
of Lessee a bill of sale in form and substance reasonably satisfactory to Lessee
(or any Sublessee), evidencing such transfer, (6) furnish Lessor with an opinion
of counsel (which shall be Cadwalader, Wickersham & Taft and, if not, other
counsel chosen by Lessee and reasonably acceptable to Lessor) reasonably
satisfactory to Lessor to the effect that Lessor and the Indenture Trustee as
assignee of Lessor will be entitled to the benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to the substitute aircraft, provided that such
opinion need not be delivered to the extent that immediately prior to such
substitution the benefits of Section 1110 of the U.S. Bankruptcy Code were not,
solely by reason of a change in law or governmental interpretation thereof,
available to Lessor and, so long as any Secured Certificates are outstanding,
the Indenture Trustee as assignee of Lessor's rights under the Lease with
respect to the Aircraft, (7) furnish Lessor with an opinion of counsel (which
may be the General Counsel or an Associate General Counsel of Lessee, or other
counsel chosen by Lessee and reasonably acceptable to Lessor) to the effect that
the full warranty bill of sale referred to in clause (1) constitutes an
effective instrument for the conveyance of title to the replacement aircraft,
airframe, engine or engines, (8) furnish Lessor (at Lessor's sole cost and
expense) with a certificate of an independent aircraft appraiser reasonably
acceptable to Lessor certifying that such replacement aircraft, airframe, engine
or engines complies with the value, utility and remaining useful life
requirements set forth above in this sentence, (9) furnish Lessor with an
opinion of tax counsel chosen by the Owner Participant and reasonably acceptable
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 the Owner
Participant of such substitution, and shall indemnify the Owner Participant for
any adverse tax consequences resulting from such substitution, and (10) Lessee
will be subrogated to all claims of Lessor, if any, against third parties for
damage to or loss of the Airframe and any Engine which were subject to such

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Event of Loss to the extent of the then insured value of the Aircraft. For all
purposes hereof, the property so substituted shall after such transfer be deemed
part of the property leased hereunder and shall be deemed an "Aircraft",
"Airframe" and "Engine", as the case may be, as defined herein. No Event of
Loss with respect to the Airframe or the Airframe and the Engines or engines
then installed thereon for which substitution has been elected pursuant to
Section 10(a)(ii) hereof shall result in any reduction in Interim Rent or
Basic Rent.

(b) Event of Loss with Respect to an Engine. Upon the occurrence of an
Event of Loss with respect to an Engine under circumstances in which there has
not occurred an Event of Loss with respect to the Airframe, Lessee shall
forthwith (and in any event, within fifteen days after such occurrence) give
Lessor written notice thereof and shall, within sixty (60) days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, as
replacement for the Engine with respect to which such Event of Loss occurred,
title to another Pratt & Whitney Model PW2037 engine (or engine of the same or
another manufacturer of the same, an equivalent or an improved model and
suitable for installation and use on the Airframe without impairing the value,
utility or remaining useful life of the Aircraft; provided that both Engines
shall be of the same make and model) free and clear of all Liens (other than
Permitted Liens, which engine may upon its transfer to Lessor become subject to
any and all Permitted Liens) and having a value, utility and remaining useful
life at least equal to the Engine subject to such Event of Loss assuming that
such Engine had been maintained in accordance with this Lease. Prior to or at
the time of any such conveyance, Lessee, at its own expense, will (i) furnish
Lessor with a warranty (as to title) bill of sale, in form and substance
reasonably satisfactory to Lessor, with respect to such replacement engine, (ii)
cause a Lease Supplement and Trust Supplement to be duly executed by Lessee and
to be filed for recording pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Airframe may then be registered as permitted by Section 8(f) of the
Participation Agreement, (iii) furnish Lessor with such evidence of compliance
with the insurance provisions of Section 11 hereof with respect to such
replacement engine as Lessor may reasonably request and furnish Lessor with
copies of the documentation required to be provided by Lessee pursuant to
Section 5.06 of the Trust Indenture in form and substance reasonably acceptable
to Lessor and (iv) furnish Lessor with an opinion of counsel (which may be the
General Counsel or an Associate General Counsel of Lessee, or other counsel
chosen by Lessee and reasonably acceptable to Lessor) to the effect that the
bill of sale referred to in clause (i) above constitutes an effective instrument
for the conveyance of title to the replacement engine, and Lessor will comply
with the terms of the Trust Indenture relating to the release of the Aircraft
from the Lien of the Trust Indenture and transfer to or at the direction of
Lessee without recourse or warranty (except as to absence of Lessor Liens,
including for this purpose Liens that would be Lessor Liens but for the proviso
in the definition of Lessor Liens) all of Lessor's right, title and interest, if
any, in and to (A) the Engine with respect to which such Event of Loss occurred
and furnish to or at the direction of Lessee a bill of sale in form and
substance reasonably satisfactory to Lessee, evidencing such transfer and (B)
all claims, if any, against third parties, for damage to or loss of the Engine
subject to such Event of Loss, and such Engine shall thereupon cease to be the
Engine leased hereunder. For all purposes hereof, each such replacement engine
shall, after such conveyance, be deemed part of the property leased hereunder,
and shall be deemed an

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<PAGE> 45

"ENGINE". No Event of Loss with respect to an Engine under the circumstances
contemplated by the terms of this paragraph (b) shall result in any
reduction in Interim Rent or Basic Rent.

(c) Application of Payments from Governmental Authorities for
Requisition of Title, etc. Any payments (other than insurance proceeds the
application of which is provided for in Section 11) received at any time by
Lessor or by Lessee from any governmental authority or other Person with respect
to an Event of Loss will be applied as follows:

(i) if payments are received with respect to the Airframe (or
the Airframe and any Engine or engines then installed thereon), (A)
unless the same are replaced pursuant to the last paragraph of Section
10(a), after reimbursement of Lessor (as provided in Section 7.01 of the
Trust Agreement) for reasonable costs and expenses, so much of such
payments remaining as shall not exceed the Stipulated Loss Value
required to be paid by Lessee pursuant to Section 10(a), shall be
applied in reduction of Lessee's obligation to pay Stipulated Loss
Value, if not already paid by Lessee, or, if already paid by Lessee,
shall be applied to reimburse Lessee for its payment of Stipulated Loss
Value, and following the foregoing application, the balance, if any, of
such payments will be paid over to, or retained by Lessee, provided that
Lessor shall be entitled to so much of the excess, if any, of such
payment over the greater of (x) the Stipulated Loss Value and (y) the
fair market value of the Aircraft as Lessor shall demonstrate to
Lessee's reasonable satisfaction is attributable to compensation for
loss of Lessor's interest in the Aircraft as distinguished from the loss
of use of the Aircraft; or (B) if such property is replaced pursuant to
the last paragraph of Section 10(a), such payments shall be paid over
to, or retained by, Lessee; provided that Lessee shall have fully
performed or, concurrently therewith, will fully perform the terms of
the last paragraph of Section 10(a) with respect to the Event of Loss
for which such payments are made; and

(ii) if such payments are received with respect to an Engine
under circumstances contemplated by Section 10(b) hereof, so much of
such payments remaining after reimbursement of Lessor (as provided for
in Section 7.01 of the Trust Agreement) for reasonable costs and
expenses shall be paid over to, or retained by, Lessee, provided that
Lessee shall have fully performed, or concurrently therewith will
perform, the terms of Section 10(b) with respect to the Event of
Loss for which such payments are made.

(d) Requisition for Use of the Aircraft by the United States Government
or the Government of Registry of the Aircraft Which is a Member of OECD . In
the event of the requisition for use of the Airframe and the Engines or engines
installed on the Airframe during the Term by the United States Government or any
other government of registry of the Aircraft which is a member of OECD or any
instrumentality or agency of any thereof, Lessee shall promptly notify Lessor of
such requisition, and all of Lessee's obligations under this Lease Agreement
with respect to the Aircraft shall continue to the same extent as if such
requisition
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<PAGE> 46

had not occurred, provided that if such Airframe and Engines or engines
installed thereon are not returned by such government prior to the end of the
Term, Lessee shall be obligated to return the Airframe and such Engines or
engines to Lessor pursuant to, and in all other respects in compliance with the
provisions of, Section 5 promptly on the date of such return by such
government. Unless an Event of Loss shall be deemed to have occurred pursuant
to the next sentence or Lessor shall have given Lessee the written notice
specified in the next sentence, Lessee shall pay to Lessor for each day (but
not to exceed 30 days) beyond the scheduled expiration of the Term during which
the Aircraft is not returned to Lessor by reason of such requisition an amount
equal to the average daily Basic Rent payable by Lessee during the Term. If,
in the event of any such requisition, Lessee shall fail to return the Aircraft
on or before the thirtieth day beyond the end of the Term, such failure shall
constitute an Event of Loss which shall be deemed to have occurred on the last
day of the Term and in such event Lessee shall make the payment contemplated by
Section 10(a)(i) in respect of such Event of Loss; provided, however, that
Lessor may notify Lessee in writing on or before the twentieth day prior to the
last day of the Term that, in the event Lessee shall fail by reason of such
requisition to return the Airframe and such Engines or engines on or before the
thirtieth day beyond the end of the Term, such failure shall not be deemed an
Event of Loss. Upon the giving of such notice and such failure to return by
the thirtieth day beyond the end of the Term, Lessee shall be relieved of all
of its obligations pursuant to the provisions of Section 5 (including Exhibit
F) (except that Lessee shall deliver to Lessor all logs, manuals and data and
inspection, modification and overhaul records in regard to the Aircraft then in
its possession) but not under any other Section, except that if any engine not
owned by Lessor shall then be installed on the Airframe, Lessee will, at no
cost to Lessor, furnish, or cause to be furnished, to Lessor a full warranty
(as to title) bill of sale including as to the absence of Liens other than
Lessor Liens (including for this purpose Liens that would be Lessor Liens but
for the proviso in the definition of Lessor Liens) with respect to each such
engine, in form and substance reasonably satisfactory to Lessor (together with
an opinion of counsel to the effect that such full warranty bill of sale has
been duly authorized and delivered and is enforceable in accordance with its
terms and that such engines are free and clear of Liens other than Lessor Liens
(including for this purpose Liens that would be Lessor Liens but for the
proviso in the definition of Lessor Liens), Loan Participant Liens and
Indenture Trustee Liens), against receipt from Lessor of a bill of sale
evidencing the transfer, without recourse or warranty (except as to the absence
of Lessor Liens, including for this purpose Liens that would be Lessor Liens
but for the proviso in the definition of Lessor Liens), by Lessor to Lessee or
its designee of all of Lessor's right, title and interest in and to any Engine
constituting part of the Aircraft but not then installed on the Airframe. All
payments received by Lessor or Lessee from such government for the use of such
Airframe and Engines or engines during the Term shall be paid over to, or
retained by, Lessee (or, if directed by Lessee, any Sublessee); and all
payments received by Lessor or Lessee from such government for the use of such
Airframe and Engines or engines after the end of the Term shall be paid over
to, or retained by, Lessor unless Lessee shall have exercised its purchase
option hereunder, in which case such payments shall be made to Lessee.

(e) Requisition for Use of an Engine by the United States Government or
the Government of Registry of the Aircraft Which is a Member of OECD. In the
event of the

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<PAGE> 47

requisition for use of an Engine by the United States Government or any other
government of registry of the Aircraft which is a member of OECD or any agency
or instrumentality of any thereof (other than in the circumstances contemplated
by subsection (d)), Lessee shall replace such Engine hereunder by complying (or
causing any Sublessee to comply) with the terms of Section 10(b) to the same
extent as if an Event of Loss had occurred with respect thereto, and, upon
compliance with Section 10(b) hereof, any payments received by Lessor or Lessee
from such government with respect to such requisition shall be paid over to,
or retained by, Lessee.

(f) Application of Payments During Existence of Event of Default. Any
amount referred to in this Section 10 which is payable to or retainable by
Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or such
Sublessee) if at the time of such payment or retention a Default of the type
specified in Section 14(a), 14(b) or 14(e) or an Event of Default shall have
occurred and be continuing, but shall be held by or paid over to Lessor as
security for the obligations of Lessee (or such Sublessee) under this Lease and,
if Lessor declares this Lease to be in default pursuant to Section 15 hereof,
applied against Lessee's obligations hereunder as and when due. At such time as
there shall not be continuing any such Default or Event of Default, such amount
shall be paid to Lessee (or such Sublessee) to the extent not previously applied
in accordance with the preceding sentence.

SECTION 11. INSURANCE. (a) Public Liability and Property Damage
Insurance. (I) Except as provided in clause (II) of this Section 11(a), Lessee
will carry or cause to be carried at its or any Sublessee's expense (i)
aircraft public liability (including, without limitation, passenger legal
liability) (and including aircraft war risk and hijacking insurance, if and to
the extent the same is maintained by Lessee (or any Sublessee) with respect to
other aircraft owned or leased, and operated by Lessee (or such Sublessee) on
the same routes) insurance and property damage insurance (exclusive of
manufacturer's product liability insurance) with respect to the Aircraft, in an
amount not less than the greater of (x) the amount of public liability and
property damage insurance from time to time applicable to aircraft owned or
operated by Lessee of the same type as the Aircraft and (y) such amount per
occurrence as may have been agreed to on the Delivery Date by the Owner
Participant and (ii) cargo liability insurance, in the case of both clause (i)
and clause (ii), (A) of the type and covering the same risks as from time to
time applicable to aircraft operated by Lessee of the same type as the Aircraft
and (B) which is maintained in effect with insurers of recognized
responsibility. Any policies of insurance carried in accordance with this
paragraph (a) and any policies taken out in substitution or replacement for any
of such policies (A) shall be amended to name Lessor, in its individual capacity
and as owner trustee, the Indenture Trustee and the Owner Participant (but
without imposing on any such parties liability to pay the premiums for such
insurance) (and, if any Sublease shall be in effect, Lessee in its capacity as
sublessor under the Sublease) as additional insureds as their respective
interests may appear, (B) shall provide that in respect of the respective
interests of Lessor, the Indenture Trustee and the Owner Participant (and, if
any Sublease shall be in effect, Lessee in its capacity as sublessor under the
Sublease) in such policies the insurance shall not be invalidated by any action
or inaction of Lessee (or, if any Sublease is then in effect, any Sublessee) or
any other Person and shall insure Lessor, the Indenture Trustee and the Owner
Participant (and, if any Sublease shall be in effect, Lessee in its capacity as
sublessor under the Sublease) regardless of any

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<PAGE> 48

breach or violation of any warranty, declaration or condition contained in such
policies by Lessee (or, if any Sublease is then in effect, any Sublessee), (C)
may provide for self-insurance to the extent permitted by Section 11(d) and (D)
shall provide that if the insurers cancel such insurance for any reason whatever
or if any material change is made in such insurance which adversely affects the
interest of Lessor, the Indenture Trustee or the Owner Participant (or, if any
Sublease shall be in effect, Lessee in its capacity as sublessor under the
Sublease), or such insurance shall lapse for non-payment of premium, such
cancellation, lapse or change shall not be effective as to Lessor, the Indenture
Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee
in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7)
days in the case of war risk and allied perils coverage) after issuance to
Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease
shall be in effect, Lessee in its capacity as sublessor under the Sublease),
respectively, of written notice by such insurers of such cancellation, lapse or
change; provided, however, that if any notice period specified above is not
reasonably obtainable, such policies shall provide for as long a period of prior
notice as shall then be reasonably obtainable. Each liability policy (1) shall
be primary without right of contribution from any other insurance which is
carried by Lessor, the Indenture Trustee or the Owner Participant
(or, if any Sublease shall be in effect, Lessee in its capacity as sublessor
under the Sublease), (2) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured, and (3) shall waive any
right of the insurers to any set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of Lessor or
the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in
effect, Lessee in its capacity as sublessor under the Sublease) to the extent
of any moneys due to Lessor, the Indenture Trustee or the Owner Participant
(or, if any Sublease shall be in effect, Lessee in its capacity as sublessor
under the Sublease).

(II) During any period that the Aircraft is on the ground and not in
operation, Lessee may carry or cause to be carried, in lieu of the insurance
required by clause (I) above, insurance otherwise conforming with the
provisions of said clause (I) except that (A) the amounts of coverage shall not
be required to exceed the amounts of public liability and property damage
insurance from time to time applicable to aircraft owned or operated by Lessee
of the same type as the Aircraft which are on the ground and not in operation;
and (B) the scope of the risks covered and the type of insurance shall be the
same as from time to time shall be applicable to aircraft owned or operated by
Lessee of the same type which are on the ground and not in operation.

(b) Insurance Against Loss or Damage to the Aircraft. (I) Except as
provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to
be maintained in effect, at its or any Sublessee's expense, with insurers of
recognized responsibility, all-risk ground and flight aircraft hull insurance
covering the Aircraft and all-risk ground and flight coverage of Engines and
Parts while temporarily removed from the Aircraft and not replaced by similar
components (including, without limitation, war risk and governmental
confiscation and expropriation (other than by the government of registry of the
Aircraft) and hijacking insurance, if and to the extent the same is maintained
by Lessee (or, if a Sublease is then in effect, any Sublessee) with respect to
other aircraft owned or operated by Lessee (or such

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<PAGE> 49

Sublessee) on the same routes, except that Lessee (or such Sublessee) shall
maintain war risk and governmental confiscation and expropriation (other than
by the government of registry of the Aircraft) and hijacking insurance if the
Aircraft is operated on routes where the custom is for major international air
carriers flying comparable routes to carry such insurance) which is of the type
as from time to time applicable to aircraft owned by Lessee of the same type as
the Aircraft; provided that such insurance shall at all times while the
Aircraft is subject to this Lease be for an amount (subject to self-insurance
to the extent permitted by Section 11(d)) not less than the Stipulated Loss
Value for the Aircraft. Any policies carried in accordance with this paragraph
(b) covering the Aircraft and any policies taken out in substitution or
replacement for any such policies (i) shall name Lessor, as owner trustee, the
Indenture Trustee and the Owner Participant (and, if any Sublease shall be in
effect, Lessee in its capacity as sublessor under the Sublease) as additional
insureds, as their respective interests may appear (but without imposing on any
such party liability to pay premiums with respect to such insurance), (ii) may
provide for self-insurance to the extent permitted in Section 11(d), (iii)
shall provide that (A) in the event of a loss involving proceeds in excess of
$3,500,000 (or, if the Aircraft is then under a Sublease, in excess of
$2,000,000), the proceeds in respect of such loss up to an amount equal to the
Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long
as the Trust Indenture shall not have been discharged, the Indenture Trustee)
(except in the case of a loss with respect to an Engine installed on an
airframe other than the Airframe, in which case Lessee (or any Sublessee) shall
arrange for any payment of insurance proceeds in respect of such loss to be
held for the account of Lessor (or, so long as the Trust Indenture shall not
have been discharged, the Indenture Trustee) whether such payment is made to
Lessee (or any Sublessee) or any third party), it being understood and agreed
that in the case of any payment to Lessor (or the Indenture Trustee) otherwise
than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall,
upon receipt of evidence satisfactory to it that the damage giving rise to such
payment shall have been repaired or that such payment shall then be required to
pay for repairs then being made, pay the amount of such payment to Lessee or
its order, and (B) the entire amount of any loss involving proceeds of
$3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or
less or the amount of any proceeds of any loss in excess of the Stipulated Loss
Value for the Aircraft shall be paid to Lessee or its order unless a Default of
the type specified in Section 14(a), 14(b) or 14(e) or an Event of Default
shall have occurred and be continuing and the insurers have been notified
thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the
insurers cancel such insurance for any reason whatever, or such insurance
lapses for non-payment of premium or if any material change is made in the
insurance which adversely affects the interest of Lessor, the Indenture Trustee
or the Owner Participant, such cancellation, lapse or change shall not be
effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if
any Sublease shall be in effect, Lessee in its capacity as sublessor under the
Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and
allied perils coverage) after issuance to Lessor, the Indenture Trustee or the
Owner Participant (or, if any Sublease shall be in effect, Lessee in its
capacity as sublessor under the Sublease), respectively, of written notice by
such insurers of such cancellation, lapse or change, provided, however, that if
any notice period specified above is not reasonably obtainable, such policies
shall provide for as long a period of prior notice as shall then be reasonably

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<PAGE> 50

obtainable, (v) shall provide that in respect of the respective interests of
Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease
shall be in effect, Lessee in its capacity as sublessor under the Sublease) in
such policies the insurance shall not be invalidated by any action or inaction
of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other
Person and shall insure the respective interests of Lessor, the Indenture
Trustee and the Owner Participant (and, if any Sublease shall be in effect,
Lessee in its capacity as sublessor under the Sublease), as they appear,
regardless of any breach or violation of any warranty, declaration or condition
contained in such policies by Lessee (or, if a Sublease is then in effect, any
Sublessee), (vi) shall be primary without any right of contribution from any
other insurance which is carried by Lessor, the Owner Participant or the
Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its
capacity as sublessor under the Sublease), (vii) shall waive any right of
subrogation of the insurers against Lessor, the Owner Participant and the
Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its
capacity as sublessor under the Sublease), and (viii) shall waive any right of
the insurers to set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of Lessor, the Indenture
Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any
moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the
case of a loss with respect to an engine (other than an Engine) installed on the
Airframe, Lessor shall hold any payment to it of any insurance proceeds in
respect of such loss for the account of Lessee or any other third party that is
entitled to receive such proceeds.

As between Lessor and Lessee, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be applied as
follows:

(x) if such payments are received with respect to the Airframe
(or the Airframe and the Engines installed thereon), (i) unless
such property is replaced pursuant to the last paragraph of Section
10(a), so much of such payments remaining, after reimbursement of
Lessor (as provided in Section 7.01 of the Trust Agreement) for
reasonable costs and expenses, as shall not exceed the Stipulated
Loss Value required to be paid by Lessee pursuant to Section 10(a)
hereof shall be applied in reduction of Lessee's obligation to pay
such Stipulated Loss Value, if not already paid by Lessee, or, if
already paid by Lessee, shall be applied to reimburse Lessee for
its payment of such Stipulated Loss Value, and the balance, if any,
of such payments remaining thereafter will be paid over to, or
retained by, Lessee (or if directed by Lessee, any Sublessee); or
(ii) if such property is replaced pursuant to the last paragraph of
Section 10(a), such payments shall be paid over to, or retained by,
Lessee (or if directed by Lessee, any Sublessee), provided that
Lessee shall have fully performed or, concurrently therewith, will
fully perform the terms of the last paragraph of Section 10(a) with
respect to the Event of Loss for which such payments are made; and

(y) if such payments are received with respect to an Engine
under the circumstances contemplated by Section 10(b) hereof, so
much of such payments remaining, after reimbursement of Lessor (as
provided in Section 7.01 of the Trust Agreement) for reasonable
costs and expenses, shall be paid over to, or

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<PAGE> 51

retained by, Lessee (or if directed by Lessee, any Sublessee),
provided that Lessee shall have fully performed or, concurrently
therewith, will fully perform, the terms of Section 10(b) with
respect to the Event of Loss for which such payments are made.

As between Lessor and Lessee, the insurance payments for any property
damage loss to the Airframe or any engine not constituting an Event of Loss with
respect thereto will be applied in payment for repairs or for replacement
property in accordance with the terms of Sections 7 and 8, if not already paid
for by Lessee (or any Sublessee), and any balance (or if already paid for by
Lessee (or any Sublessee), all such insurance proceeds) remaining after
compliance with such Sections with respect to such loss shall be paid to Lessee
(or any Sublessee if directed by Lessee).

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

(c) Reports, etc. Lessee will furnish, or cause to be furnished, to
Lessor, the Indenture Trustee and the Owner Participant, on or before the
Delivery Date and on or before July 1 in each year thereafter during the Term
commencing July, 1996, a report, signed by Marsh & McLennan, Incorporated or any
other independent firm of insurance brokers reasonably acceptable to Lessor (the
"INSURANCE BROKERS"), describing in reasonable detail the insurance and
reinsurance then carried and maintained with respect to the Aircraft and stating
the opinion of such firm that the insurance then carried and maintained with
respect to the Aircraft complies with the terms hereof; provided, however, that
all information contained in the foregoing report shall not be made available by
Lessor, the Indenture Trustee, the Loan Participants or the Owner Participant to
anyone except (A) to prospective and permitted transferees of Lessor's, the Loan
Participants', the Owner Participant's or the Indenture Trustee's interest who
agree to hold such information confidential, (B) to Lessor's, the Loan
Participants', the Owner Participant's or the Indenture Trustee's counsel or
independent certified public accountants or independent insurance advisors who
agree to hold such information confidential, (C) as may be required by any
statute, court or administrative order or decree or governmental ruling or
regulation or as may be requested by any regulatory agency or body having
authority or (D) as may be necessary for purposes of protecting the interests of
any such Person or for the enforcement of this Lease by Lessor. Lessee will
cause such Insurance Brokers to agree to advise Lessor, the Indenture Trustee
and the Owner Participant in writing of any default in the payment of any
premium and of any other act or omission on the part of Lessee of which it has
knowledge and which might invalidate or render unenforceable, in whole or in
part, any insurance on the Aircraft. To the extent such agreement is reasonably
obtainable, Lessee will also cause such Insurance Brokers to agree to

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<PAGE> 52

advise Lessor, the Indenture Trustee and the Owner Participant in writing at
least thirty (30) days (seven (7) days in the case of war risk and allied perils
coverage), prior to the expiration or termination date of any insurance carried
and maintained on the Aircraft pursuant to this Section 11. In addition, Lessee
will also cause such Insurance Brokers to deliver to Lessor, the Indenture
Trustee and the Owner Participant, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of insurance,
a new certificate of insurance, substantially in the same form as delivered by
Lessee to such parties on the Delivery Date. In the event that Lessee or any
Sublessee shall fail to maintain or cause to be maintained insurance as herein
provided, Lessor or the Indenture Trustee may at its sole option provide such
insurance and, in such event, Lessee shall, upon demand, reimburse Lessor or the
Indenture Trustee, as Supplemental Rent, for the cost thereof to Lessor or the
Indenture Trustee, as the case may be, without waiver of any other rights Lessor
or the Indenture Trustee may have; provided, however, that no exercise by Lessor
or the Indenture Trustee, as the case may be, of said option shall affect the
provisions of this Lease, including the provisions of Section 14(g) hereof.

(d) Self-Insurance. Lessee may self-insure by way of deductible,
premium adjustment or franchise provisions or otherwise (including, with respect
to insurance maintained pursuant to Section 11(b), insuring for a maximum amount
which is less than the Stipulated Loss Value of the Aircraft) in the insurance
covering the risks required to be insured against pursuant to this Section 11
under a program applicable to all aircraft in Lessee's fleet, but in no case
shall the aggregate amount of self-insurance in regard to Section 11(a) and
Section 11(b) exceed during any policy year, with respect to all of the aircraft
in Lessee's fleet (including, without limitation, the Aircraft), the lesser of
(a) 50% of the largest replacement value of any single aircraft in Lessee's
fleet or (b) 1-1/2% of the average aggregate insurable value (during the
preceding policy year) of all aircraft (including, without limitation, the
Aircraft) on which Lessee carries insurance. In addition, Lessee (and any
Sublessee) may self-insure to the extent of any applicable mandatory minimum per
aircraft (or, if applicable, per annum or other period) hull or liability
insurance deductible imposed by the aircraft hull or liability insurers.

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

(f) Indemnification by Government in Lieu of Insurance. Notwithstanding
any provisions of this Section 11 requiring insurance, Lessor agrees to accept,
in lieu of insurance against any risk with respect to the Aircraft,
indemnification from, or insurance provided by, the United States Government or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States or, upon the written consent of
Lessor (such consent to be given or withheld in its sole discretion), other

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<PAGE> 53

government of registry of the Aircraft or any agency or instrumentality
thereof, against such risk in an amount which, when added to the amount of
insurance against such risk maintained by Lessee (or any Sublessee) with
respect to the Aircraft (including permitted self-insurance) shall be at least
equal to the amount of insurance against such risk otherwise required by this
Section 11.

(g) Application of Payments During Existence of an Event of Default.
Any amount referred to in paragraph (b) of this Section 11 which is payable to
or retainable by Lessee (or any Sublessee) shall not be paid to or retained by
Lessee (or any Sublessee) if at the time of such payment or retention a Default
of the type described in Section 14(a), 14(b) or 14(e) or an Event of Default
shall have occurred and be continuing, but shall be held by or paid over to
Lessor as security for the obligations of Lessee (or any Sublessee) under this
Lease and, if Lessor declares this Lease to be in default pursuant to Section 15
hereof, applied against Lessee's obligations hereunder as and when due. At such
time as there shall not be continuing any such Default or Event of Default, such
amount shall be paid to Lessee (or such Sublessee) to the extent not previously
applied in accordance with the preceding sentence.

SECTION 12. INSPECTION. At all reasonable times, and upon at least 15
days' prior written notice to Lessee, Lessor, the Owner Participant or the
Indenture Trustee or their respective authorized representatives may (not more
than once every 12 months (unless during the circumstances set forth in the last
paragraph of Section 5(a) or an Event of Default has occurred and is continuing
when such inspection right shall not be so limited)) inspect the Aircraft and
inspect and make copies (at Lessor's, the Owner Participant's or the Indenture
Trustee's expense, as the case may be) of the books and records of Lessee
relating to the maintenance of the Aircraft; any such inspection of the Aircraft
shall be limited to a visual, walk-around inspection and shall not include
opening any panels, bays or the like without the express consent of Lessee
(unless already open); provided that no exercise of such inspection right shall
interfere with the operation or maintenance of the Aircraft by, or the business
of, Lessee (or any Sublessee). In addition, upon receipt by Lessee of a written
request from the Owner Participant specifying that the Owner Participant desires
to have an authorized representative observe the next scheduled major overhaul
to be performed on the Aircraft, Lessee shall cooperate with the Owner
Participant to enable the Owner Participant's authorized representative to
observe the next scheduled major overhaul to be performed on the Aircraft;
provided that Lessee shall be required to so cooperate only to the extent
necessary to enable the Owner Participant's authorized representative to observe
one scheduled major overhaul during each 18 month period of the Term; provided
that the Owner Participant's authorized representative shall merely observe such
major overhaul, shall not interfere with or extend in any manner the conduct or
duration of the major overhaul and shall not be entitled to direct any of the
work performed in connection with such overhaul. None of Lessor, the Owner
Participant or the Indenture Trustee shall have any duty to make any such
inspection nor shall any of them incur any liability or obligation by reason of
not making such inspection.

SECTION 13. ASSIGNMENT. Except as otherwise provided herein, Lessee
will not, without prior written consent of Lessor, assign in whole or in part
any of its rights or obligations hereunder. Lessor agrees that it will not
assign or convey its right, title and

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interest in and to this Lease or the Aircraft except as provided herein, in the
Trust Agreement or in the Participation Agreement. Subject to the foregoing,
the terms and provisions of this Lease shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective successors and permitted
assigns.

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

(a) Lessee shall not have made a payment of Interim Rent,
Basic Rent or Stipulated Loss Value within ten (10) days after the
same shall have become due; or

(b) Lessee shall have failed to make a payment of Supplemental
Rent (other than Stipulated Loss Value) after the same shall have
become due and such failure shall continue for ten (10) Business
Days after Lessee's receipt of written demand therefor by the party
entitled thereto (provided that any failure to pay any amount owed
by Lessee under the Tax Indemnity Agreement or any failure of
Lessee to pay to Lessor or the Owner Participant when due any
Excluded Payments (as defined in the Trust Indenture) shall not
constitute an Event of Default unless notice is given by the Owner
Participant to Lessee and the Indenture Trustee that such failure
shall constitute an Event of Default); or

(c) Lessee shall have failed to perform or observe (or caused
to be performed and observed) in any material respect any covenant
or agreement (except the covenants set forth in the Tax Indemnity
Agreement and in clauses (i)(B) and (ii) of the first sentence of
second paragraph of Exhibit F) to be performed or observed by it
under any Operative Document, and such failure shall continue
unremedied for a period of thirty (30) days after receipt by Lessee
of written notice thereof from Lessor or the Indenture Trustee;
provided, however, that if Lessee shall have undertaken to cure any
such failure which arises under clause (ii) or clause (iii) of the
first sentence of Section 7(a), or under the second sentence of
Section 7(a) as it relates to maintenance, service, repair or
overhaul or under Section 8 and, notwithstanding the diligence of
Lessee in attempting to cure such failure, such failure is not
cured within said thirty day period but is curable with future due
diligence, there shall exist no Event of Default under this Section
14 so long as Lessee is proceeding with due diligence to cure such
failure and such failure is remedied not later than one hundred
eighty (180) days after receipt by Lessee of such written notice;
or

(d) any representation or warranty made by Lessee herein or in
the Participation Agreement or any document or certificate
furnished by Lessee in

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connection herewith or therewith or pursuant hereto or thereto
(except the representations and warranties set forth in Section 3 of
the Tax Indemnity Agreement and such documents or certificates as
are furnished to the Owner Participant solely in connection with
matters dealt with in the Tax Indemnity Agreement and for no other
purpose and except the representations and warranties in, or in
connection with, the Credit Agreement) shall prove to have been
incorrect in any material respect at the time made and such
incorrectness shall not have been cured (to the extent of the
adverse impact of such incorrectness on the interests of the Owner
Participant, Lessor or the Certificate Holders) within thirty (30)
days after the receipt by Lessee of a written notice from Lessor or
the Indenture Trustee advising Lessee of the existence of such
incorrectness; or

(e) the commencement of an involuntary case or other
proceeding in respect of Lessee in an involuntary case under the
federal bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other
similar law in the United States or seeking the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of Lessee or for all or substantially all of
its property, or seeking the winding-up or liquidation of its
affairs and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive
days or an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing,
without the consent of Lessee, a receiver, trustee or liquidator of
Lessee, or of any substantial part of its property, or sequestering
any substantial part of the property of Lessee and any such order,
judgment or decree or appointment or sequestration shall be final
or shall remain in force undismissed, unstayed or unvacated for a
period of ninety (90) days after the date of entry thereof; or

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

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

provided, however, that, notwithstanding anything to the contrary contained in
Section 14(c) or (d) hereof, any failure of Lessee to perform or observe any
covenant, condition, agreement or any error in a representation or warranty
shall not constitute an Event of Default if such failure

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or error is caused solely by reason of an event that constitutes an Event of
Loss so long as Lessee is continuing to comply with all of the terms of Section
10 hereof.

SECTION 15. REMEDIES. Upon the occurrence of any Event of Default and
at any time thereafter so long as the same shall be continuing, Lessor may, at
its option, declare by written notice to Lessee this Lease Agreement to be in
default (provided that this Lease shall be deemed to be declared in default
without the necessity of such written declaration upon the occurrence of any
Event of Default described in Section 14(e) or Section 14(f)); and at any time
thereafter, so long as any such outstanding Events of Default shall not have
been remedied, Lessor may do one or more of the following with respect to all or
any part of the Airframe and any or all of the Engines as Lessor in its sole
discretion shall elect, to the extent permitted by, and subject to compliance
with any mandatory requirements of, applicable law then in effect; provided,
however, that during any period the Aircraft is subject to the Civil Reserve Air
Fleet Program in accordance with the provisions of Section 7(b) hereof and in
possession of the United States government or an agency or instrumentality of
the United States, Lessor shall not, on account of any Event of Default, be
entitled to do any of the following in such manner as to limit Lessee's control
under this Lease (or any Sublessee's control under any Sublease) of any Airframe
or any Engines installed thereon, unless at least sixty (60) days' (or such
lesser period as may then be applicable under the Air Mobility Command program
of the United States Government) written notice of default hereunder shall have
been given by Lessor by registered or certified mail to Lessee (and any
Sublessee) with a copy addressed to the Contracting Office Representative for
the Air Mobility Command of the United States Air Force under any contract with
Lessee (or any Sublessee) relating to the Aircraft:

(a) upon the written demand of Lessor and at Lessee's expense,
cause Lessee to return promptly, and Lessee shall return promptly,
the Airframe or any Engine as Lessor may so demand to Lessor or its
order in the manner and condition required by, and otherwise in
accordance with all the provisions of, Section 5 as if such
Airframe or Engine were being returned at the end of the Term, or
Lessor, at its option, may enter upon the premises where all or any
part of the Airframe or any Engine is located and take immediate
possession of and remove the same, without the necessity of first
instituting proceedings, or by summary proceedings or otherwise
(and/or, at Lessor's option, store the same at Lessee's premises
until disposal thereof by Lessor), all without liability accruing
to Lessor for or by reason of such entry or taking of possession or
removing whether for the restoration of damage to property caused
by such action or otherwise;

(b) sell the Airframe and/or any Engine at public or private
sale, as Lessor may determine, or otherwise dispose of, hold, use,
operate, lease to others or keep idle the Aircraft as Lessor, in
its sole discretion, may determine, all free and clear of any
rights of Lessee or any Sublessee 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;

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<PAGE> 57

(c) whether or not Lessor shall have exercised, or shall
thereafter at any time exercise, any of its rights under paragraph
(a) or paragraph (b) above with respect to the Airframe and/or any
Engine, Lessor, by written notice to Lessee specifying a payment
date which shall be the Stipulated Loss Value Date not earlier than
ten days from the date of such notice, may demand that the Lessee
pay to Lessor, and Lessee shall pay Lessor, on the payment date so
specified, as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the installments of Interim Rent or Basic Rent
for the Aircraft due on the Commencement Date or for Lease Periods
commencing on or after the payment date in such notice), any unpaid
Interim Rent or Basic Rent due on the payment date so specified
(unless Basic Rent is payable in advance but including, without
limitation, any adjustments to Basic Rent payable pursuant to
Section 3(d)) plus whichever of the following amounts Lessor, in its
sole discretion, shall specify in such notice (together with
interest, if any, on such amount at the Past Due Rate from such
specified payment date until the date of actual payment of such
amount): (i) an amount equal to the excess, if any, of the
Stipulated Loss Value for the Aircraft, computed as of the
Stipulated Loss Value Date specified as the payment date in such
notice, over the aggregate fair market rental value (computed as
hereafter in this Section 15 provided) of such Aircraft for the
remainder of the Term, after discounting such aggregate fair market
rental value to present value as of the Stipulated Loss Value Date
specified as the payment date in such notice at an annual rate equal
to the Base Rate plus 1%; or (ii) an amount equal to the excess, if
any, of the Stipulated Loss Value for such Aircraft, computed as of
the Lease Period Date specified as the payment date in such notice
over the fair market sales value of such Aircraft (computed as
hereafter in this Section provided) as of the Stipulated Loss Value
Date specified as the payment date in such notice, plus in the case
of each such amount, interest thereon at the Past Due Rate from such
specified payment date until the actual date of payment of such
amount;

(d) in the event Lessor, pursuant to paragraph (b) above,
shall have sold the Airframe and/or any Engine, Lessor, in lieu of
exercising its rights under paragraph (c) above with respect to
such Aircraft, may, if it shall so elect, demand that Lessee pay
Lessor, and Lessee shall pay to Lessor, on the date of such sale,
as liquidated damages for loss of a bargain and not as a penalty
(in lieu of the installments of Interim Rent or Basic Rent for the
Aircraft due on or after such date), any unpaid Interim Rent or
Basic Rent with respect to the Aircraft due on (unless such Basic
Rent is payable in advance) or prior to such date (including,
without limitation, any adjustments to Basic Rent payable pursuant
to Section 3(d)) plus the amount of any deficiency between the net
proceeds of such sale (after deduction of all reasonable costs of
sale) and the Stipulated Loss Value of such Aircraft, computed as
of the Stipulated Loss Value Date on or immediately preceding the
date of such sale together with interest, if any, on the amount of
such deficiency, at the Past Due Rate, from the date of such sale
to the date of actual payment of such amount; and/or

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<PAGE> 58

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

For the purposes of paragraph (c) above, the "fair market rental value"
or the "fair market sales value" of the Aircraft shall be the rental value or
sales value, as the case may be, which would be obtained in an arm's-length
transaction between an informed and willing lessee or purchaser, as the case may
be, under no compulsion to lease or purchase, as the case may be, and an
informed and willing lessor or seller in possession under no compulsion to lease
or sell, as the case may be, in each case based upon the actual condition and
location of the Aircraft, which value shall be determined by mutual agreement
or, in the absence of mutual written agreement, pursuant to an appraisal
prepared and delivered by a nationally recognized firm of independent aircraft
appraisers nominated by Lessor, and Lessor shall immediately notify Lessee of
such nomination. Unless Lessee shall have objected in writing within ten days
after its receipt of Lessor's notice, Lessor's nomination shall be conclusive
and binding. If Lessee shall object, however, Lessor and Lessee shall endeavor,
within ten days after such objection is made, to select a mutually acceptable
appraiser; provided that, if Lessee shall not so endeavor to make such
selection, Lessor's nomination referred to in the preceding sentence hereof
shall be conclusive and binding. If Lessor and Lessee fail to reach agreement
(except for the reason referred to in the proviso in the preceding sentence), or
if any appraiser selected fails to act for any reason, then the question shall
be determined by an appraisal (applying the definitions of "fair market rental
value" and "fair market sales value" as set forth above based upon the actual
condition of the Aircraft) mutually agreed to by two recognized independent
aircraft appraisers, one of which appraisers shall be chosen by Lessor and one
by Lessee within five Business Days after Lessor or Lessee shall have received
written notice from the other party of a demand that such an appraisal be made,
which notice shall specify the appraiser chosen by the party giving the notice
or, if such appraisers cannot agree on the amount of such appraisal within
twenty Business Days after the end of such five-day period, each shall render
its own appraisal and shall by mutual consent choose another appraiser within
five Business Days after the end of such twenty-day period. If, within such
five-day period, such two appraisers fail to appoint a third appraiser, then
either Lessor or Lessee, on behalf of both, may request such appointment by the
then President of the Association of the Bar of the City of New York (or any
successor organization thereto) or, in his absence, failure, refusal or
inability to act, then either Lessor or Lessee may apply to the American
Arbitration Association (or any successor organization thereto) in New York, New
York for the appointment of such third appraiser. The decision of the third
appraiser so appointed shall be given within twenty Business Days after the
appointment of such third appraiser. As soon as the third appraiser has
delivered his appraisal, that appraisal shall be compared with the appraisals
given by the other two appraisers. If the determination of one appraiser is
more disparate from the average of all three determinations than each of the
other two determinations, then the determination of such appraiser shall be
excluded, the remaining two determinations shall be averaged and such average
shall be final and binding upon the parties hereto. If no determination is more
disparate from the average of all three determinations than each of the other
determinations, then such average shall be final and

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binding upon the parties thereto. The cost of such appraisal or appointment
shall be borne by Lessee.

In addition, Lessee shall be liable, except as otherwise provided above
and without duplication of amounts payable hereunder, for any and all unpaid
Rent due hereunder before, after or during the exercise of any of the foregoing
remedies and for all reasonable legal fees and other costs and expenses
(including fees of the appraisers hereinabove referred to) incurred by Lessor,
the Indenture Trustee, the Loan Participants and the Owner Participant by reason
of the occurrence of any Event or Default or the exercise of Lessor's remedies
with respect thereto, including all 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 such Airframe or Engine in the condition and
airworthiness required by such Section.

At any sale of the Aircraft or any part thereof pursuant to this Section
15, Lessor (or the Indenture Trustee, any Loan Participant or the Owner
Participant) may bid for and purchase such property. Lessor agrees to give
Lessee at least fifteen (15) days' prior written notice of the date fixed for
any public sale of the Airframe or any Engine or of the date on or after which
will occur the execution of any contract providing for any private sale. Except
as otherwise expressly provided above, no remedy referred to in this Section 15
is intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to above or otherwise available to Lessor at law or in
equity; and the exercise or beginning of exercise by Lessor of any one or more
of such remedies shall not preclude the simultaneous or later exercise by Lessor
of any or all of such other remedies. No waiver by Lessor of any Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default.

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

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delivery of any supplement and amendment hereto and promptly after the
execution and delivery of any supplement and amendment to the Trust Indenture
(except for any such supplement or amendment which does not require or receive
the approval of Lessee pursuant to the Operative Documents and is not required
pursuant to the terms of the Operative Documents), an opinion of counsel
reasonably satisfactory to Lessor and the Indenture Trustee as to the due
recording or filing of such supplement or amendment. Commencing in 1997, on or
before April 30 of each year during the Term, Lessee will deliver to Lessor and
the Indenture Trustee a certificate of Lessee, signed by the President, a Vice
President or the Chief Financial Officer of Lessee to the effect that the signer
is familiar with or has reviewed the relevant terms of this Lease and the signer
does not have actual knowledge of the existence, as of the date of such
certificate, of any condition or event which constitutes a Default or an Event
of Default. Lessee agrees that if the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, Treasurer or an Assistant Treasurer of Lessee
has actual knowledge of the existence of a Default, then Lessee shall promptly
give to Lessor, the Owner Participant and the Indenture Trustee notice thereof
and such other information relating thereto as Lessor, the Owner Participant or
the Indenture Trustee may reasonably request. Lessee agrees that if an officer
of Lessee has knowledge of the existence of an Event of Default, Lessee shall
promptly give to Lessor and the Indenture Trustee notice thereof and such other
information relating thereto as Lessor or the Indenture Trustee may reasonably
request. Lessee will deliver to Lessor, the Owner Participant and the Indenture
Trustee (i) within sixty (60) days after the end of each of the first three
quarterly periods of each fiscal year of the Guarantor, the publicly filed Form
10-Q report of the Guarantor; (ii) within one hundred twenty (120) days after
the close of such fiscal year, the publicly filed annual report and Form 10-K
report of the Guarantor; and (iii) once each calendar quarter, any other
Securities and Exchange Commission filings of the Guarantor during the preceding
calendar quarter. In addition, Lessee will deliver to Lessor and the Owner
Participant (i) within 60 days after the end of the first three quarterly
periods of each fiscal year of Lessee, a balance sheet of Lessee as of the close
of such period, together with the related statements of operations and cash
flows for such period; and (ii) within one hundred and twenty (120) days after
the close of such fiscal year, a balance sheet of Lessee as of the close of such
fiscal year, together with the related statements of operations and cash flows
for such fiscal year prepared in the case of clause (i) and (ii) in
accordance with generally accepted accounting principles, consistently applied.

SECTION 17. NOTICES. All notices required under the terms and
provisions hereof shall be by telecopy or other telecommunication means (with
such telecopy or other telecommunication means to be confirmed in writing), or
if such notice is impracticable, by registered, first-class airmail, with
postage prepaid, or by personal delivery of written notice and any such notice
shall become effective when received, addressed:

(i) if to Lessee, for U.S. mail at 5101 Northwest Drive
(A4010), St. Paul, Minnesota 55111-3034, and for overnight courier
at 2700 Lone Oak Parkway (A4010), Eagan, Minnesota 55121,
Attention: Senior Vice President-Finance and Treasurer (Telecopy
No. (612) 726-0665), or to such other address

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or telecopy number as Lessee shall from time to time designate in
writing to Lessor,

(ii) if to Lessor, at 79 South Main Street, Salt Lake City,
Utah 84111, Attention: Corporate Trust Department (Telecopy No. (801)
246-5053), or to such other address or telecopy number as Lessor shall
from time to time designate in writing to Lessee, and

(iii) if to a Loan Participant, the Indenture Trustee or the
Owner Participant, addressed to such Loan Participant, the Indenture
Trustee or the Owner Participant at such address or telecopy number as
such Loan Participant, the Indenture Trustee or the Owner Participant
shall have furnished by notice to Lessor and to Lessee, and, until an
address is so furnished, addressed to such Loan Participant, the
Indenture Trustee or the Owner Participant at its address or telecopy
number set forth in Schedule I to the Participation Agreement.

SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC. This Lease is a net lease.
All Rent shall be paid by Lessee to Lessor in funds of the type specified in
Section 3(f). Except as provided in Section 3(g) hereof, Lessee's obligation
to pay all Rent payable hereunder shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which Lessee may have
against Lessor, in its individual capacity or as Owner Trustee under the Trust
Agreement, the Indenture Trustee (in its individual capacity or as Indenture
Trustee), any Loan Participant, the Owner Participant, or anyone else for any
reason whatsoever (whether in connection with the transactions contemplated
hereby or any other transactions), including, without limitation, any breach by
Lessor or the Owner Participant of their respective warranties, agreements or
covenants contained in any of the Operative Documents, (ii) any defect in the
title, registration, airworthiness, condition, design, operation, or fitness for
use of, or any damage to or loss or destruction of, the Aircraft, or any
interruption or cessation in or prohibition of the use or possession thereof by
Lessee (or any Sublessee) for any reason whatsoever, including, without
limitation, any such interruption, cessation or prohibition resulting from the
act of any government authority, (iii) any insolvency, bankruptcy,
reorganization or similar case or proceedings by or against Lessee (or any
Sublessee) or any other person, or (iv) any other circumstance, happening, or
event whatsoever, whether or not unforeseen or similar to any of the foregoing.
If for any reason whatsoever this Lease shall be terminated in whole or in part
by operation of law or otherwise except as specifically provided herein, Lessee
nonetheless agrees without limitation of the other rights or remedies of Lessor
hereunder, subject to the rights of Lessee to setoff under Section 3(g) hereof,
to pay to Lessor an amount equal to each Rent payment at the time such payment
would have become due and payable in accordance with the terms hereof had this
Lease not been terminated in whole or in part. Lessee hereby waives, to the
extent permitted by applicable law, any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or otherwise,
to terminate, cancel, quit or surrender this Lease except in accordance with the
express terms hereof.

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SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION. (a) Renewal
Options. (1) Fixed Renewal Term. Lessee shall have the right to renew this
Lease for up to three consecutive one year renewal terms the first of which
shall commence only upon the expiration of the Basic Term (any such renewal
term, a "FIXED RENEWAL TERM") by delivery to Lessor at least one hundred eighty
(180) days before the end of the Basic Term, the first Fixed Renewal Term or the
second Fixed Renewal Term, as the case may be, a written notice irrevocably
electing to renew this Lease for a Fixed Renewal Term. Basic Rent during any
Fixed Renewal Term shall be payable in an amount and at the times specified in
Section 19(a)(4).

(2) Fair Market Renewal Term. At the expiration of the third Fixed
Renewal Term or any Fair Market Renewal Term, Lessee shall have the option to
renew this Lease for a renewal term of not less than one year and not more than
four years for a Basic Rent equal to the "fair market rental value" of the
Aircraft for such period (any such renewal term, a "FAIR MARKET RENEWAL TERM").
Each such option to renew shall be exercised by Lessee delivering to Lessor, at
least one hundred eighty (180) days prior to the commencement of such Fair
Market Renewal Term, a written notice irrevocably electing to renew this Lease
for a Fair Market Renewal Term (which notice shall also specify the length of
the Fair Market Renewal Term). The aggregate length of all Fair Market Renewal
Terms pursuant to this Section 19(a)(2) may not exceed four years.

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

(4) At the end of the Basic Term or any Renewal Term, if Lessee has
elected to renew this Lease as aforesaid, and provided that there shall not then
have occurred and be continuing a Default of the type referred to in Section
14(a), 14(b), 14(e) or 14(f) or an Event of Default and that all necessary
governmental authorizations and approvals shall have been received and that
Basic Rent for the Renewal Term has already been determined as above provided
and a Lease Supplement evidencing such renewal has been executed and filed for
recordation with the Federal Aviation Administration, this Lease shall continue
in full force and effect during the Renewal Term, except that (x) Lessee shall
pay Lessor Basic Rent for the Aircraft during the Renewal Term in an amount
equal to the "fair market rental value" thereof determined in accordance with
Section 19(c), but not to exceed in the case of a Fixed Renewal Term the higher
of (i) one-half of the average Basic Rent during the Basic Term (such average
being determined as the total of all payments of Basic Rent during the Basic
Term added together and divided by the number of payments of Basic Rent during
the Basic Term) and (ii) 2.092% multiplied by Lessor's Cost, which Basic Rent
shall be payable in semi-annual installments in arrears, each such installment
being due and payable on each Lease Period Date occurring during the Renewal
Term, commencing with the Lease Period Date immediately following the
commencement of the Renewal Term, and (y) the Stipulated Loss Values applicable
during the Renewal Term shall be determined separately for each Renewal Term by
the Owner Participant in good faith to reflect Stipulated Loss Values determined
in accordance with the following sentence. Stipulated Loss Values during a
Renewal Term shall on the date

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on which such Renewal Term begins be equal to the fair market sales value of the
Aircraft as of such date, determined in accordance with the provisions of this
Section 19(a)(4) and Section 19(c) hereof, 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 Term, determined in accordance with the provisions of this
Section 19(a)(4) and Section 19(c) hereof.

In determining fair market sales value for purposes of calculating
Stipulated Loss Value for any Renewal Term no effect shall be given to the
encumbrance on the Aircraft of any Renewal Term available or in force under this
Section 19.

(b) Purchase Options. Lessee shall have the option, upon at least one
hundred eighty (180) days' irrevocable prior written notice to Lessor, to
purchase the Aircraft on the last Business Day of the Basic Term or any Renewal
Term for a purchase price equal to the lesser of the fair market sales value of
the Aircraft and 50% of Lessor's Cost. Upon payment to Lessor in immediately
available funds of the full amount of the purchase price and payment of any
other amounts then due hereunder (including all Rent and all costs or expenses
of the Owner Participant in connection with such purchase), Lessor will transfer
to Lessee, without recourse or warranty (except as to the absence of Lessor
Liens, including for this purpose Liens that would be Lessor Liens but for the
proviso in the definition of Lessor Liens), all of Lessor's right, title and
interest in and to the Aircraft.

(c) Valuation. At any time not earlier than three hundred sixty-five
(365) days prior to the date on which Lessee may purchase the Aircraft pursuant
to Section 19(b) hereof or renew this Lease pursuant to Section 19(a)(1) or
Section 19(a)(2) hereof, Lessee may deliver to Lessor a revocable notice
(subject to the requirements as to irrevocable notice set forth in Sections
19(a)(1), 19(a)(2) and 19(b) hereof) of its intent to exercise its renewal
option or purchase option. For all purposes of this Section 19, including the
appraisal referred to in this Section 19(c), in determining "fair market rental
value" or "fair market sales value", the Aircraft shall be valued (i) as if in
the condition and otherwise in compliance with the terms of Section 5 upon a
return of the Aircraft, (ii) on the basis of the value which would obtain in an
arm's-length transaction between an informed and willing buyer-user or lessee
under no compulsion to buy or lease and an informed and willing seller or lessor
unaffiliated with such buyer-user or lessee and under no compulsion to sell or
lease and disregarding the purchase and renewal options of the lessee provided
in this Lease, and (iii) in the case of such valuation for determining "fair
market rental value", assuming such lessee would have substantially the same
obligations during the Fair Market Renewal Term as provided hereunder including
without limitation the obligations of Lessee to carry and maintain the insurance
required by Section 11 hereof and to make certain payments with reference to
Stipulated Loss Value during the applicable Fair Market Renewal Term. Upon
receipt of such notice Lessor and Lessee shall confer in good faith with a view
to reaching agreement on the "fair market rental value" or "fair market sales
value" of the Aircraft. If the parties have not so agreed by two hundred
seventy (270) days prior to the end of the Basic Term or the Renewal Term in
question, then the question shall be determined by an appraisal mutually agreed
to by two recognized independent aircraft appraisers, one of which appraisers
shall be chosen by Lessor and one by Lessee within five Business Days after
Lessor or Lessee shall have received written notice

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<PAGE> 64

from the other party of a demand that such an appraisal be made, which notice
shall specify the appraiser chosen by the party giving the notice or, if such
appraisers cannot agree on the amount of such appraisal within twenty Business
Days after the end of such five-day period, each shall render its own appraisal
and shall by mutual consent choose another appraiser within five Business Days
after the end of such twenty-day period. If, within such five-day period, such
two appraisers fail to appoint a third appraiser, then either Lessor or Lessee,
on behalf of both, may request such appointment by the then President of the
Association of the Bar of the City of New York (or any successor organization
thereto) or, in his absence, failure, refusal or inability to act, then either
Lessor or Lessee may apply to the American Arbitration Association (or any
successor organization thereto) in New York, New York for the appointment of
such third appraiser. The decision of the third appraiser so appointed shall
be given within twenty Business Days after the appointment of such third
appraiser. As soon as the third appraiser has delivered his appraisal, that
appraisal shall be compared with the appraisals given by the other two
appraisers. If the determination of one appraiser is more disparate from the
average of all three determinations than each of the other two determinations,
then the determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and binding
upon the parties hereto. If no determination is more disparate from the
average of all three determinations than each of the other determinations, then
such average shall be final and binding upon the parties thereto. Lessee and
Lessor shall share equally all expenses relating to such appraisal procedure,
provided if Lessee elects not to renew this Lease or purchase the Aircraft
following such appraisal, Lessee shall pay all expenses of such appraisal.

(d) Special Purchase Option. On January 2, 2012 (or, if January 2, 2012
is not a Business Day, the Business Day immediately succeeding January 2, 2012),
Lessee shall have the option, upon at least ninety (90) days' irrevocable prior
notice to Lessor and, if any Secured Certificates are then outstanding, the
Indenture Trustee, to purchase the Aircraft on such date for a purchase price
equal to, at Lessee's option, either (a) the Special Purchase Price or (b) the
Initial Installment (payable on such date) plus the Remaining Installments
(payable thereafter). In the event Lessee elects to purchase the Aircraft for a
purchase price equal to the Special Purchase Price, on such date Lessee shall
pay Lessor the Special Purchase Price. In addition, if in the case of clause
(a) on such date there shall be any Secured Certificates outstanding, Lessee
shall also have the option to assume, pursuant to Section 8(x) of the
Participation Agreement and Section 2.15 of the Trust Indenture, all of the
obligations of Lessor under the Trust Indenture. If such assumption is made,
Lessee shall pay Lessor a purchase price equal to (I) the Special Purchase Price
minus (II) an amount equal to principal of, and accrued but unpaid interest on,
any Secured Certificates that are outstanding on such date. Upon such payment in
full and payment of any other amounts then due hereunder (including costs or
expenses of the Owner Participant in connection with such purchase, any
installments of Basic Rent due prior to such date and, if Basic Rent is payable
in arrears on such date as indicated on Exhibit B, on such date (but not any
installment of Basic Rent due on such date if Basic Rent is payable in advance
on such date), and all unpaid Supplemental Rent due on or prior to such date,
including Supplemental Rent payable pursuant to the second sentence of Section
3(e)), Lessor will transfer to Lessee, without recourse or warranty (except as
to the absence of Lessor Liens, including for this purpose Liens that would be
Lessor Liens

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<PAGE> 65

but for the proviso in the definition of Lessor Liens), all of Lessor's right,
title and interest in and to the Aircraft and under the Trust Indenture and,
unless there shall be any Secured Certificates outstanding after such payment,
exercise such rights as it has to cause the Aircraft to be released from the
Lien of the Trust Indenture. In the event Lessee elects to purchase the
Aircraft for a purchase price equal to the Initial Installment plus the
Remaining Installments, on such date Lessee shall pay Lessor an amount equal to
the amount set forth under the heading "Initial Installment" on Exhibit B (the
"INITIAL INSTALLMENT"). Upon such payment and payment of any other amounts then
due hereunder (including costs or expenses of the Owner Participant in
connection with such purchase, any installments of Basic Rent due prior to such
date and, if Basic Rent is payable in arrears on such date as indicated on
Exhibit B, on such date (but not any installment of Basic Rent due on such date
if Basic Rent is payable in advance on such date), and all unpaid Supplemental
Rent due on or prior to such date, including Supplemental Rent payable pursuant
to the second sentence of Section 3(e)), and after Lessee shall have provided
Lessor with its undertaking to pay the amounts due on the dates set forth under
the heading "Remaining Installments" on Exhibit B (the "REMAINING INSTALLMENTS")
and with collateral security for such undertaking reasonably acceptable to the
Owner Participant, Lessor will transfer to Lessee, without recourse or warranty
(except as to the absence of Lessor Liens, including for this purpose Liens that
would be Lessor Liens but for the proviso in the definition of Lessor Liens),
all of Lessor's right, title and interest in and to the Aircraft and under the
Trust Indenture and shall exercise such rights as it has to cause the Aircraft
to be released from the Lien of the Trust Indenture.

SECTION 20. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF SECURED
CERTIFICATES. In order to secure the indebtedness evidenced by the Secured
Certificates, Lessor has agreed in the Trust Indenture, among other things, to
assign to the Indenture Trustee this Lease, the Lease Supplements and any
amendments to this Lease and to mortgage its interest in the Aircraft in favor
of the Indenture Trustee, subject to the reservations and conditions therein set
forth. To the extent, if any, that this Lease, the Lease Supplements and any
amendments to this Lease constitute 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, the Lease Supplements and any amendments to
this Lease may be created through the transfer or possession of any counterpart
other than the original counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture Trustee on
the signature page thereof. Lessee hereby accepts and consents to the
assignment of all Lessor's right, title and interest in and to this Lease
pursuant to the terms of the Trust Indenture. Subject to Section 3(f) hereof,
Lessee agrees to pay directly to the Indenture Trustee (or, after receipt by
Lessee of notice from the Indenture Trustee of the discharge of the Trust
Indenture, to Lessor), all amounts of Rent due or to become due hereunder and
assigned to the Indenture Trustee and Lessee agrees that the Indenture Trustee'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 clauses (i) through (iv) of Section 18 hereof.
Notwithstanding the foregoing assignment of this Lease, the obligations of
Lessor to Lessee to perform the terms and conditions of this Lease shall remain
in full force and effect.

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<PAGE> 66

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

SECTION 22. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR LIMITED.
(a) Investment of Security Funds. Any moneys held by Lessor as security
hereunder for future payments to Lessee at a time when there is not continuing
an Event of Default shall, until paid to Lessee, be invested by Lessor or, if
the Trust Indenture shall not have been discharged, by the Indenture Trustee, as
the case may be, as Lessee may from time to time direct in writing (and in
absence of a written direction by Lessee, there shall be no obligation to invest
such moneys) in (i) direct obligations of the United States of America and
agencies guaranteed by the United States government having a final maturity of
ninety (90) days or less from date of purchase thereof; (ii) certificates of
deposit issued by, bankers' acceptances of, or time deposits with, any bank,
trust company or national banking association incorporated under the laws of the
United States of America or one of the states thereof having combined capital
and surplus and retained earnings as of its last report of condition of at least
$500,000,000 and having a rating of Aa or better by Moody's Investors Service,
Inc. ("MOODY'S") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial paper
of any corporation or finance company incorporated or doing business under the
laws of the United States of America or any state thereof having a rating
assigned to such commercial paper of A1 by S&P or P1 by Moody's and having a
final maturity of ninety (90) days or less from the date of purchase thereof;
provided, however, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not be in excess of 5% of
such bank's capital and surplus. There shall be promptly remitted to Lessee or
its order (but no more frequently than monthly) any gain (including interest
received) realized as a result of any such investment (net of any fees,
commissions and other expenses, if any, incurred in connection with such
investment) unless an Event of Default shall have occurred and be continuing.
Lessee shall be responsible for any net loss realized as a result of any such
investment and shall reimburse Lessor (or the Indenture Trustee, as the case may
be) therefor on demand.

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

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<PAGE> 67

negligence or willful misconduct or for breach of its covenants, representations
and warranties contained herein, to the extent covenanted or made in its
individual capacity.

SECTION 23. SERVICE OF PROCESS. Lessor and Lessee each hereby
irrevocably submits itself to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York and to the
non-exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, for the purposes of any suit, action or other proceeding arising
out of this Lease, the subject matter hereof or any of the transactions
contemplated hereby brought by Lessor, Lessee, the Indenture Trustee, the Loan
Participants or the Owner Participant or their successors or assigns.

SECTION 24. MISCELLANEOUS. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. No term or provision of
this Lease may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by Lessor, Lessee and any assignee of Lessor's
rights hereunder. This Lease shall constitute an agreement of lease, and
nothing contained herein shall be construed as conveying to Lessee any right,
title or interest in the Aircraft except as a lessee only. Neither Lessee nor
any affiliate of Lessee will file any tax returns in a manner inconsistent with
the foregoing fact or with Lessor's ownership of the Aircraft. The section and
paragraph headings in this Lease and the table of contents are for convenience
of reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof and all references herein to numbered sections, unless
otherwise indicated, are to sections of this Lease. THIS LEASE HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This Lease may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

SECTION 25. SUCCESSOR TRUSTEE. Lessee agrees that in the case of the
appointment of any successor Owner Trustee pursuant to the terms of the Trust
Agreement, such successor Owner Trustee shall, upon written notice by such
successor Owner Trustee, succeed to all the rights, powers and title of Lessor
hereunder and shall be deemed to be Lessor and the owner of the Aircraft for all
purposes hereof without the necessity of any consent or approval by Lessee
(subject to Section 10 of the Participation Agreement) and without in any way
altering the terms of this Lease or Lessee's obligations hereunder. One such
appointment and designation of a successor Owner Trustee shall not exhaust the
right to appoint and designate further successor Owner Trustees pursuant to the
Trust Agreement, but such right may be exercised repeatedly as long as this
Lease shall be in effect.

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<PAGE> 68

SECTION 26. COVENANT OF QUIET ENJOYMENT. So long as no Event of Default
shall have occurred and be continuing and notwithstanding any default by
Lessor, the Owner Participant or the Indenture Trustee under the Participation
Agreement, the Trust Agreement or the Trust Indenture, Lessor shall not
interfere with Lessee's continued possession, use and operation of, and quiet
enjoyment of, the Aircraft pursuant to the terms of this Lease or Lessee's
rights, benefits and obligations pursuant to the Overall Transaction during the
Term of this Lease, and this Lease shall not be terminated except as expressly
provided herein.

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<PAGE> 69

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

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

BY:____________________________________
Title:

NORTHWEST AIRLINES, INC.,
Lessee

BY:____________________________________
Title:

Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on the _____ day of __________, 199_.

STATE STREET BANK AND
TRUST COMPANY,
Indenture Trustee

BY:____________________________________
Title:

- Signature Page -

<PAGE> 70

EXHIBIT A
TO
LEASE AGREEMENT
[NW 1996 B]

LEASE SUPPLEMENT NO.
[NW 1996 B]

LEASE SUPPLEMENT NO. __, dated _________, 19___, between FIRST SECURITY
BANK OF UTAH, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee under the Trust Agreement [NW 1996 B], dated as of _______ __,
199_, between BNY CAPITAL FUNDING CORP., as Owner Participant, and such Owner
Trustee (such Owner Trustee, in its capacity as such Owner Trustee, being herein
called "LESSOR"), and NORTHWEST AIRLINES, INC. ("LESSEE").

Lessor and Lessee have heretofore entered into that certain Lease
Agreement [NW 1996 B], dated as of April 24, 1996, relating to one Boeing
757-251 aircraft (herein called the "LEASE," and the defined terms therein being
hereinafter used with the same meanings). The Lease provides for the execution
and delivery from time to time of Lease Supplements for the purpose of leasing
the Airframe and Engines under the Lease as and when delivered by Lessor to
Lessee in accordance with the terms thereof.

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

(2)The Lease Agreement relates to the Airframe and Engines described
below, and a counterpart of the Lease Agreement, attached and made a part of
Lease Supplement No. 1 dated _______________, 19__ to the Lease Agreement, has
been recorded by the Federal Aviation Administration on ________________, 19__,
as one document and assigned Conveyance No. __.

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

1. Lessor hereby delivers and leases to Lessee under the Lease and
Lessee hereby accepts and leases from Lessor under the Lease the following
described Boeing 757-251 aircraft (the "AIRCRAFT"), which Aircraft as of the
date hereof consists of the following components:

__________________

(1) This language for Lease Supplement No. 1.

(2) This language for other Lease Supplements.

<PAGE> 71

(i) Airframe: FAA Registration No. ______; manufacturer's
serial no. _____; and

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

2. The Delivery Date of the Aircraft is the date of this Lease
Supplement set forth in the opening paragraph hereof. Except as otherwise
provided in the Lease, the Term for the Aircraft shall commence on the Delivery
Date and end on January 2, 2019.

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

4. Lessee hereby confirms to Lessor that Lessee has accepted the
Aircraft for all purposes hereof and of the Lease as being airworthy, in good
working order and repair and without defect or inherent vice in title,
condition, design, operation or fitness for use; provided, however, that nothing
contained herein or in the Lease shall in any way diminish or otherwise affect
any right Lessee or Lessor may have with respect to the Aircraft against The
Boeing Company, or any subcontractor or supplier of The Boeing Company, under
the Purchase Agreement or otherwise.

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

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. 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 jurisdiction), no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
original counterpart, which shall be identified as the counterpart containing
the receipt therefor executed by the Indenture Trustee on the signature page
hereof.

EXHIBIT A - PAGE 2

<PAGE> 72

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

FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
Not in its Individual Capacity,
but Solely as Owner Trustee,

Lessor

By____________________________________
Title:

NORTHWEST AIRLINES, INC.,

Lessee

By____________________________________
Title:

3Receipt of this original counterpart of the foregoing Lease Supplement is
hereby acknowledged on this ____ day of _______________, 19__.

STATE STREET BANK AND
TRUST COMPANY,
Indenture Trustee

By____________________________________
Title:

_______________________

(3) This language contained in the original counterpart only.

EXHIBIT A - PAGE 3

<PAGE> 73

EXHIBIT B
TO
LEASE AGREEMENT
[NW 1996 B]

INTERIM RENT, BASIC RENT, EXCESS AMOUNT,
LESSOR'S COST, SPECIAL PURCHASE PRICE, INITIAL
INSTALLMENT AND REMAINING INSTALLMENTS SCHEDULE

The portion of this Exhibit appearing below this text is intentionally deleted
from the FAA filing counterpart as the parties hereto deem it to contain
confidential information.

Interim Rent, Basic Rent and Excess Amount:

Transition (Percentage of
Date Lessor's Cost)
- -------------------------------- --------------------------------------

Commencement Date Interim Rent (Percentage of
Lessor's Cost)

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

Basic Rent
(Percentage of
Lease Period Date Lessor's Cost)
- -------------------------------- --------------------------------------

<PAGE> 74

* Denotes payment in arrears from preceding Lease Period Date (or
Commencement Date in the case of the first Lease Period) to specified Lease
Period Date.

** Denotes payment in advance from specified Lease Period Date to
succeeding Lease Period Date.

EXHIBIT B - PAGE 2

<PAGE> 75

INTERIM RENT, BASIC RENT, EXCESS AMOUNT,
LESSOR'S COST, SPECIAL PURCHASE PRICE, INITIAL
INSTALLMENT AND REMAINING INSTALLMENTS SCHEDULE

The portion of this Exhibit appearing below this text is intentionally deleted
from the FAA filing counterpart as the parties hereto deem it to contain
confidential information.

Basic Rent
(Percentage of
Lease Period Date Lessor's Cost)
------------------------------- ---------------------------

* Denotes payment in arrears from preceding Lease Period Date (or
Commencement Date in the case of the first Lease Period) to specified Lease
Period Date.

** Denotes payment in advance from specified Lease Period Date to
succeeding Lease Period Date.

EXHIBIT B - PAGE 3

<PAGE> 76

Lessor's Cost for the Aircraft:

Special Purchase Price:

Initial Installment:

Remaining Installments: Date Amount
---- ------

Transition Date:

EXHIBIT B - PAGE 4

<PAGE> 77

EXHIBIT C
TO
LEASE AGREEMENT
[NW 1996 B]