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                                  SECURED NOTE

 $137,500.00                                                    October 26, 1994

         FOR VALUE RECEIVED, AIRSHIP AIRWAYS, INC. (f/k/a Federal Airlines,
 Inc.) a Florida corporation (the "Maker"), having an office at 7380 Sand Lake
 Road, Suite 200, Orlando, Florida 32819 hereby promises to pay to the order of
 AIRSHIP INTERNATIONAL LTD, (the "Payee") at its office at 7380 Sand Lake Road,
 Suite 350, Orlando, Florida 32819 or at such other place as Payee may, from
 time to time, designate, the principal sum of One Hundred Thirty Seven Thousand
 Five Hundred Dollars ($137,500.00) in lawful money of the United STATES due and
 payable as set forth below.

         1. Interest. Maker further promises to pay interest on unpaid principal
 balance hereof of 8% per annum from the date hereof. Such interest shall be due
 and payable together with principal as provided below. Interest shall be
 calculated on the basis of a 360 day year (12 equal 30 day periods). In no
 event shall the interest charged hereunder exceed the maximum permitted under
 the laws of the State of Florida.

         2. Principal. The entire unpaid principal balance hereof, and all
 accrued and unpaid interest shall be due and payable on or before February 23,
 1995, or such later date to which the Payee may agree in writing, unless
 accelerated as a result of a default as set forth below.

         3. Covenants. Maker agrees to use the proceeds of the loan evidenced
 hereby as deposit monies paid in connection with aircraft acquisition and to
 defray the costs of Maker's FAA certification. 

            a) Maker shall not, without the prior written consent of the Payee,
               create, incur, assume or suffer to exist any mortgage, pledge,
               security interest, assignment, lien (statutory or other) or
               claims in or upon the assets described in Exhibit "A".

         4. Representations and Warranties. The Maker hereby represents and
warrants as follows, which representations and warranties shall continue to be
true while any obligations pursuant to this Note remain outstanding: 

            a) it is a corporation duly organized, validly existing and in good
               standing under the laws of its state of incorporation and has the
               corporate power and authority to carry on its business as it is
               now being conducted and to own, operate and lease its properties
               and assets and is duly qualified or licensed to do business as a
               foreign corporation and is in good standing in all the
               jurisdictions in which the ownership or leasing of its property
               or conduct of its business requires such qualifications or
               licensing.







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            b) it has full power, authority and legal right to execute and
               deliver this Note, the Collateral and Security Agreement dated
               the date hereof between Maker and Payee (the "Security
               Agreement"), the foregoing have been duly authorized by all
               necessary corporate action on its part and each of this Notice
               and the Security Agreement is the legal, valid and binding
               obligation of Maker enforceable against is in accordance with the
               terms hereof and thereof.

            c) it is not in default under any material indenture, mortgage, deed
               of trust, agreement or other instrument to which it is a party or
               by which it or any of its assets may be bound. The execution and
               delivery of this Note and the Security Agreement and compliance
               with provisions hereof shall not violate any United States or
               foreign law, regulation or any order or decree of any United
               States or foreign court or governmental instrumentality in any
               material respect, nor shall the same violate its charter or
               by-laws or result in the breach of, constitute any material
               default under,or conflict with any indenture, mortgage, material
               agreement or other instrument to which it is party or by which it
               or any of its assets may be bound or result in the creation or
               imposition of any lien, security interest or claim upon any of
               its assets.

            d) except for filings required to perfect the security interest
               granted in the Security Agreement, no action of or filing with or
               consent of any United States or foreign governmental or public
               body or authority and no approval or consent of any other party
               is required to authorize or is otherwise required in connection
               with the execution, delivery or performance of this Note or the
               Security Agreement.

            e) notwithstanding issues raised in the pending litigation styled
               V-3 Travel, Inc. v. Federal Airlines, Inc. and Louis J. Pearlman,
               Case No.: 93-1034-CIV-ORL-18, there is no suits, proceedings or
               investigations pending or, to its knowledge, threatened against
               it which, individually or in the aggregate, if determined
               adversely, would have a material adverse effect on it, its
               business, operation or assets.

         5. Default. Notwithstanding the fact that this Note is payable on the
due date set forth above, the entire unpaid principal balance of this Note and
interest accrued with respect thereto as well as any other costs, fees and
expenses incurred in connection herewith shall be immediately due and payable,
without notice or demand, upon the occurrence of any of the following:

            a) the Maker becoming insolvent (however defined or evidenced),
               committing an act of bankruptcy, making an assignment for the
               benefit of creditors or making or sending a notice of intended
               bulk transfer, or if a 







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               meeting of creditors is convened or a committee of creditors is
               appointed for, or any petition or proceeding for any relief under
               any bankruptcy, reorganization, arrangement, insolvency,
               readjustment of debt, receivership, liquidation or dissolution
               law or statute now or hereinafter in effect (whether at law or in
               equity) is filed or commenced by or against Maker or any of its
               properties or the appointment of a receiver or trustee for Maker
               or any of its properties;

            b) any merger, consolidation or other business combination involving
               the Maker (other then a merger of consolidation between Maker and
               Payee) or the sale of all or substantially all of the assets of
               Maker;

            c) the filing of a lien, the issuance of a levy or execution, or the
               seizure, attachment or garnishment, or the entry of judgment on
               or against Maker or any of its properties which, individually or
               in the aggregate, exceeds $50,000.00 and which shall not be
               released, satisfied of record or bonded within thirty (30) days
               thereafter;

            d) the occurrence of a default of any kind or the breach of any
               covenant under this Note, the Security Agreement or any present
               or future document, instrument or agreement between the Maker and
               Payee, which remains uncured for the length of the grace period
               specified therein, if any; or

            e) should any representation or warranty made by Maker in this Note,
               the Security Agreement or any present or future document,
               instrument or agreement between Maker and Payee prove to be
               untrue or inaccurate in any material respect as of the date on
               which such representation or warranty is made.

        6. Remedies. All rights and remedies available to the Payee pursuant to
the provisions of this Note, the Security Agreement, applicable law and
otherwise are cumulative, not exclusive, and enforceable alternatively,
successively and/or concurrently after default by Maker.

        7. Waivers. maker waives demand, presentment, protest and notice of any
 kind and consents to the extension of time of payments, the release, surrender
 or substitution of any and all security or guarantees for the obligations
 evidenced hereby or other indulgence with respect to this Note, all without
 notice. In the event of any litigation with respect to the obligations
 evidenced by this Note, or with respect to the Security Agreement, the MAKER
 WAIVES THE RIGHT TO A TRIAL BY JURY.

        8. Modification. This Note may not be changed, modified or terminated
orally, but only by an agreement in writing, signed by the party to be charged.
The Maker hereby






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 authorizes the Payee to complete the blanks, if any, in this Note or the
 Security Agreement and any particulars relating thereto according to the terms
 of the indebtedness evidenced hereby.

        9. Governing Law; Venue. The laws of the State of Florida shall govern
the validity, enforcement and interpretation of this Note, and any lawsuit
hereunder shall be venued in the Circuit Court of Orange County, Florida.

        10. Invalidity Assignment. If any term or provision of this Note shall
 be held invalid, illegal or unenforceable, the validity of all other terms and
 provisions hereof shall in no way be affected thereby. This Note shall be
 binding upon the successors and assigns of the Maker and enure to the benefit
 of the Payee, its successors, endorsers and assigns.

        11. Set Off. Maker reserves the right and ability to offset monies owed
 in connection with other Promissory Notes between Maker and Payee in the event
 Payee defaults on said Notes.

        IN WITNESS WHEREOF, the Maker has executed this Secured Note as of the
 date set forth above.

                                 AIRSHIP AIRWAYS, INC.



                                 By: /s/ PETER GARRAMBONE
                                    ____________________________________________
                                    Peter Garrambone, Chief Executive Officer


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