AIRBUS A318/A319 PURCHASE AGREEMENT

                           Dated as of March 10, 2000

                                     between

                                 AVSA, S.A.R.L.,
                                     Seller

                                       and

                             FRONTIER AIRLINES, INC.
                                      Buyer


<PAGE>


                                 C O N T E N T S

         CLAUSES                    TITLE

          0                         DEFINITIONS

          1                         SALE AND PURCHASE

          2                         SPECIFICATION

          3                         PRICE

          4                         PRICE REVISION

          5                         PAYMENT TERMS

          6                         INSPECTION

          7                         CERTIFICATION

          8                         TECHNICAL ACCEPTANCE

          9                         DELIVERY

         10                         EXCUSABLE DELAY AND TOTAL LOSS

         11                         INEXCUSABLE DELAY

         12                         WARRANTIES AND SERVICE LIFE POLICY

         13                         PATENT AND COPYRIGHT INDEMNITY

         14                         TECHNICAL DATA AND DOCUMENTATION

         15                         FIELD ASSISTANCE

         16                         TRAINING AND TRAINING AIDS

         17                         EQUIPMENT SUPPLIER PRODUCT SUPPORT

         18                         BUYER FURNISHED EQUIPMENT AND DATA

         19                         INDEMNITIES AND INSURANCE

         20                         ASSIGNMENTS AND TRANSFERS

         21                         TERMINATION EVENTS

         22                         MISCELLANEOUS PROVISIONS

         23                         CERTAIN REPRESENTATIONS OF THE PARTIES































                                 C O N T E N T S

EXHIBITS

EXHIBIT A-1                         A318 STANDARD SPECIFICATION

APPENDIX 1 TO                       SCNs

EXHIBIT A-1

EXHIBIT A-2                         A319 STANDARD SPECIFICATION

APPENDIX 1 TO                       SCNs

EXHIBIT A-2

EXHIBIT B                           SCN FORM

EXHIBIT C                           SELLER SERVICE LIFE POLICY

EXHIBIT D                           CERTIFICATE OF ACCEPTANCE

EXHIBIT E                           BILL OF SALE

EXHIBIT F                           TECHNICAL DATA AND DOCUMENTATION

APPENDIX 1 TO                       LICENSE FOR USE OF THE PERFORMANCE
                                    ENGINEER'S EXHIBIT F PROGRAM

APPENDIX 2 TO                       LICENSE FOR USE OF CD-ROM

EXHIBIT F

EXHIBIT G                           SELLER PRICE REVISION FORMULA

EXHIBIT H                           PROPULSION SYSTEMS PRICE REVISION FORMULA

EXHIBIT I                           CONFIDENTIALITY TERMS

<PAGE>



                        P U R C H A S E     A G R E E M E N T


This agreement is made this 10th day of March 2000


between

                  AVSA,  a  societe  a  responsabilite   limitee  organized  and
                  existing under the laws of the Republic of France,  having its
                  registered office located at

                  2, rond-point Maurice Bellonte

                  31700 BLAGNAC
                  FRANCE

                  (hereinafter referred to as the "Seller")


and

                  Frontier  Airlines, Inc., a corporation organized and existing
                  under the laws  of  the  State  of  Colorado, United States of
                  America, having its principal corporate offices located at

                  12015 East 46th Avenue,  Suite 200
                  Denver, CO   80239-3116

                  (hereinafter referred to as the "Buyer")

         WHEREAS the Buyer  wishes to purchase and the Seller is willing to sell
         up to  twenty-nine  (29) Airbus  Industrie  A318-100 and A319-100 model
         aircraft, on the terms and conditions herein provided; and

         WHEREAS  the  Seller is a sales subsidiary of Airbus Industrie, G.I.E.,
         and will purchase the Aircraft from Airbus Industrie, G.I.E.,for resale
         to the Buyer,


NOW THEREFORE IT IS AGREED AS FOLLOWS:


<PAGE>



0 -      DEFINITIONS

         For all  purposes  of this  agreement,  except as  otherwise  expressly
         provided or unless the context otherwise requires,  the following terms
         will have the following meanings:

         A318  Aircraft  - any or all of the A318  Firm  Aircraft,  A318  Option
         Aircraft  and  Additional  Option  Aircraft  that the  Buyer  orders as
         A318-100 aircraft.

         A319  Aircraft  - any or all of the A319  Firm  Aircraft,  A319  Option
         Aircraft  and  Additional  Option  Aircraft  that the  Buyer  orders as
         A319-100 aircraft.

         A318 Firm Aircraft - any or all of the five (5) firm A318-100  aircraft
         for which the delivery  schedule is set forth in Clause 9.1.1 hereof to
         be sold by the  Seller  and  purchased  by the Buyer  pursuant  to this
         Agreement,   together  with  all  components,   equipment,   parts  and
         accessories  installed in or on such  aircraft and the A318  Propulsion
         Systems installed thereon upon delivery.

         A318 Option Aircraft - any or all of the five (5) A318-100  aircraft on
         option  order for which the  delivery  schedule  is set forth in Clause
         9.1.1 hereof,  and which may be sold by the Seller and purchased by the
         Buyer  pursuant  to  this  Agreement,  together  with  all  components,
         equipment,  parts and accessories  installed in or on such aircraft and
         the A318 Propulsion Systems installed thereon upon delivery.

         A318  Propulsion  Systems  - the  two  (2)  Pratt  &  Whitney  PW  6124
         powerplants installed on an A318 Aircraft at delivery, each composed of
         the  powerplant  (as such  term is  defined  in  Chapters  70-80 of ATA
         Specification   100  (Revision  21),  but  limited  to  the  equipment,
         components,  parts and accessories  included in the  powerplant,  as so
         defined) that have been sold to the Manufacturer by Pratt & Whitney.

         A318 Specification - the A318 Standard  Specification as amended by the
         SCNs set forth in  Appendix 1 to  Exhibit  A-1 hereto as may be further
         amended or modified in accordance with this Agreement.

         A318 Standard  Specification - the A318 standard specification document
         number P.000.01000,  Issue A, dated November 25, 1998, published by the
         Manufacturer, which includes an MTOW of 145,505 pounds, a copy of which
         is annexed as Exhibit A-1 hereto.

         A319 Firm Aircraft - any or all of the six (6) firm  A319-100  aircraft
         for which the delivery  schedule is set forth in Clause 9.1.1 hereof to
         be sold by the  Seller  and  purchased  by the Buyer  pursuant  to this
         Agreement,   together  with  all  components,   equipment,   parts  and
         accessories  installed in or on such  aircraft and the A319  Propulsion
         Systems installed thereon upon delivery.

         A319 Option Aircraft - any or all of the four (4) A319-100  aircraft on
         option  order for which the  delivery  schedule  is set forth in Clause
         9.1.1 hereof,  and which may be sold by the Seller and purchased by the
         Buyer  pursuant  to  this  Agreement,  together  with  all  components,
         equipment,  parts and accessories  installed in or on such aircraft and
         the A319 Propulsion Systems installed thereon upon delivery.

         A319  Propulsion  Systems  -  the  two  (2)  CFM  56-5B5/P  powerplants
         installed  on an  A319  Aircraft  at  delivery,  each  composed  of the
         powerplant   (as  such  term  is  defined  in  Chapters  70-80  of  ATA
         Specification   100  (Revision  21),  but  limited  to  the  equipment,
         components,  parts and accessories  included in the  powerplant,  as so
         defined) that have been sold to the Manufacturer by CFM International.

         A319 Specification - the A319 Standard  Specification as amended by the
         SCNs set forth in  Appendix 1 to  Exhibit  A-2 hereto as may be further
         amended or modified in accordance with this Agreement.

         A319 Standard  Specification - the A319 standard specification document
         number J.000.01000,  Issue 4, dated January 30, 1998,  published by the
         Manufacturer, which includes an MTOW of 154,324 pounds, a copy of which
         is annexed as Exhibit A-2 hereto.

         Additional Option Aircraft - up to nine (9) A318-100 and A319-100 model
         aircraft  other  than Firm  Aircraft  and Option  Aircraft  that may be
         purchased  by the  Seller  and  sold  to the  Buyer  pursuant  to  this
         Agreement,   together  with  all  components,   equipment,   parts  and
         accessories installed in or on such aircraft and the Propulsion Systems
         installed thereon upon delivery.

         Affiliate - with  respect to any person or entity,  any other person or
         entity  directly  or  indirectly  controlling,  controlled  by or under
         common  control with such person or entity,  not  including  any of the
         Associated Contractors.

         Agreement - this Airbus  A318/A319  Purchase  Agreement,  including all
         Exhibits and Appendixes  attached hereto, as the same may be amended or
         modified and in effect from time to time.

         Aircraft - any or all of the Firm Aircraft or Option Aircraft that have
         been converted to a firm order.

         Airframe - any Aircraft, excluding the Propulsion Systems therefor.

         ASCO - Airbus  Service  Company,  Inc.,  a  corporation  organized  and
         existing  under the laws of  Delaware,  having  its  registered  office
         located at 198 Van Buren Street,  Suite 300, Herndon,  VA 20170, or any
         successor thereto.

         Associated  Contractors  -  collectively,  the members and, for certain
         purposes,  subcontractors  of the Manufacturer from time to time, which
         members presently are:

         (1)      AEROSPATIALE  MATRA  S.A.  ("Aerospatiale"),  whose  principal
                  office is at
                  37, Boulevard de Montmorency
                  75016 Paris
                  France

          (2)     BRITISH AEROSPACE (OPERATIONS) LTD,  whose principal office is
                  at
                  Warwick House
                  PO Box 87
                  Farnborough Aerospace Centre
                  Farnborough
                  Hants GU14 6YU
                  England

         (3)      CONSTRUCCIONES AERONAUTICAS,S.A., whose principal office is at
                  404 Avenida de Aragon
                  28022 Madrid
                  Spain

         (4)      DAIMLERCHRYSLER AEROSPACE AIRBUS,GmbH("DASA"), whose principal
                  office is at
                  Kreetslag 10
                  Postfach 95 01 09
                  21111 Hamburg
                  Germany

         ATA Specification  100 - the specification  issued by the Air Transport
         Association of America relating to manufacturers' technical data.

         ATA Specification  101 - the specification  issued by the Air Transport
         Association of America relating to ground equipment technical data.

         ATA Specification  102 - the specification  issued by the Air Transport
         Association of America relating to software programs.

         ATA Specification  200 - the specification  issued by the Air Transport
         Association of America relating to integrated data processing.

         ATA Specification  300 - the specification  issued by the Air Transport
         Association  of  America  relating  to the  packaging  of  spare  parts
         shipments.

         ATA Specification 2000 - the specification  issued by the Air Transport
         Association  of  America  relating  to an  industry-wide  communication
         system  linking   suppliers  and  users  for  the  purposes  of  spares
         provisioning,   purchasing,   order   administration,   invoicing   and
         information or data exchange.

         ATA Specification 2100 - the specification  issued by the Air Transport
         Association of America  relating to the standards for the  presentation
         of technical information prepared as digital media (magnetic tape or CD
         ROM).

         Aviation  Authority  -when used with respect to any  jurisdiction,  the
         government  entity  that,  under  the  laws of such  jurisdiction,  has
         control  over civil  aviation  or the  registration,  airworthiness  or
         operation of civil aircraft in such jurisdiction.

         Balance of the Final  Contract  Price - means the amount payable by the
         Buyer  to the  Seller  on the  Delivery  Date  for  an  Aircraft  after
         deducting from the Final Contract Price for such Aircraft the amount of
         all  Predelivery  Payments  received  by the  Seller  from the Buyer in
         respect  of such  Aircraft  on or  before  the  Delivery  Date for such
         Aircraft.

         Base Price - for any Aircraft,  Airframe or Propulsion Systems, as more
         completely defined in Clause 3.1 of this Agreement.

         Buyer Furnished  Equipment  (BFE) - for any Aircraft,  all the items of
         equipment  that will be  furnished  by the Buyer and  installed  in the
         Aircraft by the Seller, as defined in the Specification.

         Buyer  Termination  Event  -  as  defined  in  Clause  21.1.1  of  this
         Agreement.

         Certificate  of  Airworthiness  for Export - an export  certificate  of
         airworthiness   issued  by  the  Aviation  Authority  of  the  Delivery
         Location.

         Customer  Originated  Changes  (COC) -  Buyer-originated  data that are
         introduced  into Seller's  Technical  Data and  Documentation,  as more
         completely set forth in Clause 14.4.3 of this Agreement.

         Delivery - the transfer of title to the Aircraft from the Seller to the
         Buyer, in accordance with Clause 9.

         Delivery Date - the date on which Delivery will occur.

         Delivery  Location - the  facilities  of the Seller at the  location of
         final  assembly of the Aircraft,  which is currently at DASA's works in
         Hamburg, Germany, for the A318 and A319 model aircraft.

         Deposit - Each of the deposit  amounts  described in Clause 5.3 of this
         Agreement.

         DGAC - the Direction  Generale de l'Aviation  Civile of France,  or any
         successor thereto.

         Excusable  Delay - delay in  delivery or failure to deliver an Aircraft
         due to causes specified in Clause 10.1 of this Agreement.

         FAA - the  U.S.  Federal  Aviation  Administration,  or  any  successor
         thereto.

         Final Contract Price - as defined in Clause 3.2 of this Agreement.

         Firm  Aircraft - any or all of the eleven (11) A318 Firm  Aircraft  and
         A319 Firm Aircraft.

         Free Carrier  (FCA) - defined in the April 1990 edition of  publication
         No. 460, published by the International Chamber of Commerce.

         In-house Warranty - as referred to in Clause 12.1.7 of this Agreement.

         In-house  Warranty Labor Rate - as defined in Clause  12.1.7(v) of this
         Agreement.

         Interface Problem - as defined in Clause 12.4.1 of this Agreement.

         JAA - Joint Aviation Authorities or any successor thereto.

         LBA - Luftfahrt-Bundesamt of Germany or any successor thereto.

         LIBOR - the London  Interbank  Offered  Rate for each  stated  interest
         period,  the rate  determined  on the  basis of the  offered  rates for
         deposits in US dollars, which appear on the Reuters Screen LIBO Page as
         of 11:00 a.m., London time, on the day that is two (2) days (other than
         a Saturday,  Sunday or a day that is a legal  holiday or a day on which
         banking  institutions  are authorized to close in the City of New York,
         New York, London, England, or Paris, France) before the first day of an
         interest  period.  If at least two (2) such offered rates appear on the
         Reuters Screen LIBO Page, the rate for that interest period will be the
         arithmetic  mean of such  offered  rates  rounded to the nearest  basis
         point (0.5 rounds to 1). If only one (1) offered rate appears, the rate
         for  that  interest  period  will be  "LIBOR"  as  quoted  by  National
         Westminster  Bank,  plc.  "Reuters  Screen LIBO Page" means the display
         designated  as page "LIBO" on the Reuters  Monitor  Money Rates Service
         (or any successor to such page or service).

         Manufacturer - Airbus Industrie,  a  "Groupement  d'Interet Economique"
         established  under "Ordonnance" No. 67-821 dated September 23, 1967, of
         the Republic of France.

         Option  Aircraft - any or all of the nine (9) A318 Option  Aircraft and
         A319 Option Aircraft.

         Predelivery  Payment  - any of the  payments  made in  accordance  with
         Clause  5.2.3  or 5.2.4 of this  Agreement,  which,  in the case of the
         first such payment, will include the Deposit.

         Predelivery  Payment  Reference  Price - as defined in Clause  5.2.2 of
         this Agreement.

         Propulsion Systems - the A318 Propulsion Systems and/or A319 Propulsion
         Systems, as applicable.

         Propulsion  Systems Price Revision Formula - the price revision formula
         for A319 Propulsion Systems, set forth in Exhibit H hereto.

         Ready  for  Delivery  - the  state  of an  Aircraft  when  it  (i)  has
         successfully  completed the Technical Acceptance Process (as defined in
         Clause 8.1.1 of the Agreement) and (ii) has been issued the Certificate
         of Airworthiness for Export.

         Reference Price - as set forth in Clause 3.1.2 of the Agreement.

         Scheduled Delivery Month - as defined in Clause 9.1.1 of the Agreement.

         Seller Price Revision Formula - the price revision formula set forth in
         Exhibit G hereto.

         Seller  Termination  Event  - as  defined  in  Clause  21.1.3  of  this
         Agreement.

         Service Life Policy - as referred to in Clause 12.2 of this Agreement.

         Specification - the A318 Specification  and/or the A319  Specification,
         as applicable.

         Specification Change Notice (SCN) - an agreement in writing between the
         Seller and the Buyer amending the Specification pursuant to Clause 2.

         Supplier - any supplier of Supplier Parts.

         Supplier Parts - any component,  equipment, accessory or part installed
         in an Aircraft  at the time of  Delivery  thereof,  not  including  the
         Propulsion Systems or Buyer Furnished Equipment, for which there exists
         a Supplier Product Support Agreement.

         Supplier Product Support Agreement -an agreement between the Seller and
         each Supplier of Seller Furnished Equipment listed in the Specification
         containing enforceable and transferable  warranties (and in the case of
         landing gear suppliers,  service life policies for selected  structural
         landing gear elements).

         Technical  Data and  Documentation  - the  documents,  manuals and data
         listed and described in Exhibit F hereto.

         Training Conference - as defined in Clause 16.4.1 of this Agreement.

         Warranted Part - as defined in Clause 12.1.1 of this Agreement.

         Warranty Claim - as defined in Clause 12.1.6(v) of this Agreement.

         Working Day - with respect to any action to be taken  hereunder,  a day
         other than a Saturday,  Sunday or other day  designated as a holiday in
         the jurisdiction in which such action is required to be taken.

         The terms "herein," "hereof" and "hereunder" and other words of similar
         import refer to this  Agreement,  and not a particular  Clause thereof.
         The  definition  of a singular  in this Clause will apply to plurals of
         the same words.

         Technical  and trade items not otherwise  defined  herein will have the
         meanings  assigned  to  them  as  generally  accepted  in the  aircraft
         manufacturing industry.


<PAGE>


1 -               SALE AND PURCHASE
                  -----------------

                  The  Seller  will cause to be  manufactured  and will sell and
                  deliver,  and the Buyer  will buy and take  delivery  of,  the
                  Aircraft at the  Delivery  Location,  subject to the terms and
                  conditions in this Agreement.


<PAGE>


2 -               SPECIFICATION
                  -------------

2.1               Specification Documents

2.1.1             The Aircraft  will be  manufactured  in  accordance  with,  as
                  applicable,  the A318 Specification or the A319 Specification.
                  The  Specifications  may be further modified from time to time
                  pursuant to the provisions of this Clause 2.

2.1.2             Specification Change Notice

                  Each Specification may be amended by written agreement between
                  the parties in an SCN. Each SCN will be  substantially  in the
                  form set out in  Exhibit  B hereto  and will set out in detail
                  the particular  change to be made to the Specification and the
                  effect, if any, of such change on design, performance, weight,
                  time  of   delivery   of  the   Aircraft,   and  text  of  the
                  Specification.  An SCN may  result in an  upward  or  downward
                  adjustment of the Base Price.

2.1.3             In the  event  that a duly  authorized  representative  of the
                  Buyer makes a written  request that the Seller  proceed with a
                  proposed change, the Seller will consider such request. If the
                  Seller  believes that the cost of studying the proposed change
                  will be significant, the Seller will provide the Buyer with an
                  estimate of such cost but will not proceed without the Buyer's
                  written approval * if the change is subsequently  incorporated
                  into the  Aircraft,  the cost of design and other work will be
                  included in the pricing of such change.

2.1.4             Development Changes

                  Each  Specification  may also be amended by the Seller without
                  the  Buyer's  consent  when  changes  are  made  to the  basic
                  specification for A318 or A319 model aircraft generally, which
                  do not  adversely  affect price,  time of delivery,  weight or
                  performance   of   the   Aircraft,    interchangeability    or
                  replaceability  requirements  under the  Specification.  These
                  changes are hereinafter defined as "Development  Changes." The
                  Seller  will  notify  the  Buyer  on a  regular  basis  of all
                  Development  Changes and furnish to the Buyer  without  charge
                  revised pages for the amended Specification.

2.2               Propulsion Systems

                  The  A318  Aircraft  will be  equipped  with  A318  Propulsion
                  Systems  and the A319  Aircraft  will be  equipped  with  A319
                  Propulsion Systems.

2.3               Customization Milestones Chart

                  Within a reasonable  period after  signature of the Agreement,
                  the  Seller  will  provide  the  Buyer  with  a  Customization
                  Milestones  Chart.  The  Customization  Milestones  Chart will
                  state the lead times before Delivery needed to reach agreement
                  on items requested by the Buyer from the specification changes
                  catalogs made available to the Seller.


<PAGE>


3 -               PRICE
                  -----

3.1               Base Price of the Aircraft

3.1.1             A318 Aircraft

                  The Base Price of each A318 Aircraft is the sum of

                  (i)      the Base Price of the A318 Aircraft as defined in the
                           A318   Standard   Specification    (excluding   Buyer
                           Furnished Equipment and SCNs), at delivery conditions
                           prevailing in January 1999, which is:

                           US $ *

                           (US dollars--* ), and

                  (ii)     the Base  Price of any and all SCNs  mutually  agreed
                           upon prior to the signature of this Agreement and set
                           forth  in  Appendix  1  to  Exhibit  A-1  hereto,  at
                           delivery conditions prevailing in January 1999, which
                           is:

                           US $ *

                           (US dollars--* ).

3.1.2             A319 Aircraft

3.1.2.1           The Base Price of each A319 Aircraft is the sum of:

                  (i)      the Base Price of the Airframe of the A319 Aircraft,
                           and

                  (ii)     the Base Price of the A319 Propulsion Systems.

3.1.2.2           Base Price of the Airframe

                  The Base Price of the Airframe of the A319 Aircraft is the sum
                  of

                  (i)      the Base  Price of the  Airframe,  as  defined in the
                           A319   Standard   Specification    (excluding   Buyer
                           Furnished Equipment and SCNs), at delivery conditions
                           prevailing in January 1999, which is:

                           US $ *

                           (US dollars--* ), and

                  (ii)     the Base  Price of any and all SCNs  mutually  agreed
                           upon prior to the signature of this Agreement and set
                           forth  in  Appendix  1  to  Exhibit  A-2  hereto,  at
                           delivery conditions prevailing in January 1999, which
                           is:

                           US $ *

                           (US dollars--* ).

3.1.2.3           Base Price of the A319 Propulsion Systems

3.1.2.3.1         The Base Price of the A319  Propulsion  Systems,  at  delivery
                  conditions prevailing in January 1999, is:

                  US $ *

                  (US dollars--* ).

                  Said Base Price has been  calculated  in  accordance  with the
                  Propulsion  Systems Price Revision  Formula from the Reference
                  Price  published by * of US $ * (US  dollars-- * ) at economic
                  conditions prevailing in July 1996.

3.1.2.3.2         Validity of A319 Propulsion Systems Prices

                  It is understood that the prices and Propulsion  Systems Price
                  Revision  Formula cited above for the A319 Propulsion  Systems
                  and related  equipment are based on information  received from
                  CFM  International and remain subject to any modification that
                  might   be   communicated   by   CFM   International   to  the
                  Manufacturer, the Seller and/or the Buyer.

3.2               Final Contract Price

3.2.1             The  Final  Contract Price of an A318 Aircraft will be the sum
                  of:

                  (i)      the  Base  Price of the A318 Aircraft, as adjusted to
                           the Delivery Date of such Aircraft in accordance with
                           the Seller Price Revision Formula;

                  (ii)     the price (as of delivery  conditions  prevailing  in
                           January 1999) of any SCNs for A318  Aircraft  entered
                           into after the date of execution  of this  Agreement,
                           as adjusted to the Delivery Date in  accordance  with
                           the Seller Price Revision Formula; and

(iii)                      any  other  amount  that is  expressly  stated  to be
                           included  in the  Final  Contract  Price  of an  A318
                           Aircraft  pursuant  to any other  provisions  of this
                           Agreement and/or any other written  agreement between
                           the  Buyer  and  the  Seller  relating  to  the  A318
                           Aircraft.

3.2.2             The Final Contract Price of an A319 Aircraft will be the sum o

                  (i)      the Base Price of the Airframe constituting a part of
                           such  Aircraft,  as adjusted to the Delivery  Date of
                           such  Aircraft in  accordance  with the Seller  Price
                           Revision Formula;

                  (ii)     the price (as of delivery  conditions  prevailing  in
                           January 1999) of any SCNs for A319  Aircraft  entered
                           into after the date of execution  of this  Agreement,
                           as adjusted to the Delivery Date in  accordance  with
                           the Seller Price Revision Formula;

                  (iii)    the Reference  Price of the installed A319 Propulsion
                           Systems  constituting  a part  of such  Aircraft,  as
                           adjusted to the Delivery Date in accordance  with the
                           Propulsion Systems Price Revision Formula; and

                  (iv)     any  other  amount  that is  expressly  stated  to be
                           included  in the  Final  Contract  Price  of an  A319
                           Aircraft  pursuant  to any other  provisions  of this
                           Agreement and/or any other written  agreement between
                           the  Buyer  and  the  Seller  relating  to  the  A319
                           Aircraft.

3.3               Taxes, Duties and Imposts

3.3.1             The  Seller  will bear and pay the amount of any and all taxes
                  (excluding taxes on the income of  the Buyer), duties, imposts
                  or similar charges of  any  nature  whatsoever  that  are  (i)
                  imposed  upon the Buyer, (ii) imposed upon the Seller  with an
                  obligation  on  the  Buyer  to  withhold or collect the amount
                  thereof  from  the Seller or (iii) imposed upon the Buyer with
                  an obligation on the Seller to withhold or collect such amount
                  from  the  Buyer,  and  that a re levied, assessed, charged or
                  collected   for   or  in   connection  with  the  fabrication,
                  manufacture, modification, assembly, sale, delivery, use of or
                  payment under  this Agreement  for  any  Aircraft,  component,
                  accessory, equipment or part delivered or furnished hereunder,
                  provided such taxes, duties, imposts or  similar  charges have
                  been  levied,  assessed,  charged  or  collected  under   laws
                  promulgated and  enforceable under the laws of the country  of
                  the Delivery Location *.

3.3.2             The  Buyer  will bear  and pay the amount of any and all taxes
                  (excluding taxes on the income of the Seller), duties, imposts
                  or similar charges of  any  nature  whatsoever  that  are  (i)
                  imposed  upon  the Seller, (ii) imposed upon the Buyer with an
                  obligation  on  the  Seller  to withhold or collect the amount
                  thereof  from  the Buyer or (iii) imposed upon the Seller with
                  an obligation for the Buyer to withhold or collect such amount
                  from  the  Seller,  and  that are levied, assessed, charged or
                  collected  for  or  in  connection  with    the   fabrication,
                  manufacture,  modification, assembly, sale, delivery or use of
                  or payment under this Agreement  for  any Aircraft, component,
                  accessory, equipment or part delivered or furnished hereunder,
                  provided  such  taxes, duties, imposts or similar charges have
                  been  levied,   assessed,  charged  or  collected  under  laws
                  promulgated  and  enforceable  in  countries  other  than  the
                  country of the Delivery Location *.

3.3.3             If a claim is made against either party (the "Indemnitee")  by
                  any  governmental  authority  for  taxes,  duties,  imposts or
                  similar charges of any nature for  which  liability  has  been
                  assumed  by  the  other  party  under  this  Clause  3.3  (the
                  "Indemnitor"), the Indemnitee will  promptly  give  notice  of
                  such claim  to  the  Indemnitor  and  the  Indemnitor  (unless
                  otherwise requested by the Indemnitee) will assume the defense
                  or settlement of such  claim,  as  the  Indemnitor  will  deem
                  prudent.  Notwithstanding the  foregoing,  if  the  Indemnitor
                  will request that the claim be  contested, the Indemnitee will
                  contest (or will permit the Indemnitor, if so desired  by  the
                  Indemnitee, to contest) the  claim  in  good  faith;  provided
                  that, (i) the Indemnitee will be required to contest any claim
                  beyond the level of administrative proceedings only if  timely
                  requested by the Indemnitor, and (ii) the Indemnitee will keep
                  the Indemnitor informed as to  the progress of any litigation.
                  The Indemnitee  will  not  be  required  to  take  any  action
                  pursuant to this Clause 3.3.3 unless (A) the  Indemnitor  will
                  have agreed to pay all costs and  expenses that the Indemnitee
                  may incur in connection with contesting such claim (including,
                  without  limitation,  reasonable legal and accounting fees and
                  disbursements, bonding fees,  penalties and interest); and (B)
                  the action to be taken will not result in any sale, forfeiture
                  or loss of, or the creation of any Lien on,  the  Aircraft  or
                  any interest therein, or if, in the opinion of the Indemnitor,
                  there  is  a reasonable risk thereof, the Indemnitor will have
                  provided to the  Indemnitee  a  bond  in  form  and  substance
                  reasonably  satisfactory  to the Indemnitee to protect against
                  such risk.  The provisions of this Clause 3.3 will survive the
                  expiration or earlier termination of this Agreement.

3.3.4             The Seller will  arrange for the  exportation  of the Aircraft
                  from the  country of the  Delivery  Location  and will pay any
                  customs  duties,  taxes  and  fees  required  to be paid  with
                  respect to such exportation of the Aircraft *.

3.3.5             The Buyer will  arrange for the  importation  of the  Aircraft
                  into any  country  or  jurisdiction  and will pay any  customs
                  duties,  taxes and fees  required  to be paid with  respect to
                  such importation of the Aircraft.


<PAGE>


4 -               PRICE REVISION
                  --------------

4.1               Seller Price Revision Formula

                  The Base Prices of the A318 Aircraft, the Airframe of the A319
                  Aircraft,  and of  SCNs  are  subject  to  revision  up to and
                  including the Delivery  Date,  in  accordance  with the Seller
                  Price Revision Formula.

4.2               Propulsion Systems Price Revision Formula

                  The  Reference  Price of the  Propulsion  Systems for the A319
                  Aircraft will be revised to the Delivery Date corresponding to
                  the Aircraft on which these Propulsion  Systems are installed,
                  in  accordance  with the  Propulsion  Systems  Price  Revision
                  Formula.


<PAGE>


5 -               PAYMENT TERMS
                  -------------

5.1               The Buyer will pay the  Predelivery  Payments,  the Balance of
                  the Final Contract Price and any other amount due hereunder in
                  immediately available funds in United States dollars to Credit
                  Lyonnais,  New York Branch, for transfer by Credit Lyonnais to
                  the  Seller's  account  with Credit  Lyonnais at 1,  Esplanade
                  Compans Caffarelli,  31000 Toulouse,  France, or to such other
                  account as may be designated by the Seller.

5.2               Predelivery Payments

5.2.1             Predelivery  Payments  will be paid by the Buyer to the Seller
                  for each Aircraft and will, in the  aggregate,  amount to * of
                  the  Predelivery  Payment  Reference  Price  of  the  Aircraft
                  defined below in Clause 5.2.2.

5.2.2             The  Buyer  will  pay  Predelivery  Payments  to  the   Seller
                  calculated on the Predelivery Payment  Reference Price of each
                  Aircraft.  The Predelivery Payment Reference Price is  defined
                  as:

                  A =               Pb (1 + 0.04N)

                  where

                  A                 = the  Predelivery  Payment  Reference Price
                                    for  Aircraft  to be  delivered  in calendar
                                    year T.

                  Pb =              the Base Price of the Aircraft as defined in
                                    Clause 3 above.

                  N  =              (T - 1999).

                  T  =              the   year   of   delivery   of the relevant
                                    Aircraft.



<PAGE>


5.2.3             Predelivery  Payments w ill be paid according to the following
                  schedules.

5.2.3.1           The schedule of Predelivery Payments for Firm Aircraft is as
                  follows:


                                                         Percentage of Aircraft
                                                         Predelivery Payment

         Payment Date                                    Reference Price

         *                                                       *

         TOTAL PAYMENT PRIOR TO DELIVERY                         *




<PAGE>


5.2.3.2  The schedule of Predelivery Payments for Option Aircraft is as follows:



                                                        Percentage of Aircraft
                                                        Predelivery Payment

         Payment Date                                   Reference Price


         *                                                     *

         TOTAL PAYMENT PRIOR TO DELIVERY                      15%

5.2.4             SCN Predelivery Payments

                  The Seller will be entitled  to request  Predelivery  Payments
                  for each SCN executed after signature of this Agreement.

                  (i)      For each SCN  executed  before the first day of the *
                           month before the Scheduled  Delivery Month, the Buyer
                           will make a Predelivery Payment equal to * of the SCN
                           price.  This Predelivery  Payment will be paid on the
                           first  day of the *  before  the  Scheduled  Delivery
                           Month.

                  (ii)     For each SCN  executed  after  the first day of * and
                           before  the first day of the * before  the  Scheduled
                           Delivery Month, this Predelivery  Payment will amount
                           to * of the SCN  price,  and for  each  SCN  executed
                           after the first day of the * and before the first day
                           of the * month before the  Scheduled  Delivery  Month
                           this payment will amount to * of the SCN price. These
                           payments will be paid on the first day of the * month
                           before the Scheduled Delivery Month.

5.3      Deposit

                  The Seller  acknowledges that it has already received from the
                  Buyer the sum of US$ * (US  dollars-- * ), which  represents a
                  deposit of US$ * (US  dollars-- * ) for each Firm Aircraft and
                  of US $* (US  dollars--  * ) for  each  Option  Aircraft.  The
                  deposit paid with respect to each particular  Aircraft will be
                  credited  without  interest  against  the  first   Predelivery
                  Payment for such Aircraft.

5.4               Payment of Balance of the Final Contract Price


                  Concurrently  with the  delivery of each  Aircraft,  the Buyer
                  will pay to the Seller the Balance of the Final Contract Price
                  for such Aircraft.  The Seller's receipt of the full amount of
                  all  Predelivery  Payments  and of the  Balance  of the  Final
                  Contract Price,  including any amounts due under Clause 5.5 or
                  5.6, will be a condition  precedent to the Seller's obligation
                  to deliver such Aircraft.

5.5               Payment of Other Amounts

5.5.1             Unless otherwise  expressly  provided for herein, any payments
                  due  hereunder  or in respect of an  Aircraft  in  addition to
                  those referred to in Clauses 5.2 and 5.4 above will be paid by
                  the Buyer  concurrently with the delivery of the corresponding
                  Aircraft  or, if the  Seller  elects to invoice  such  amounts
                  after  delivery of such  Aircraft,  within one (1) month after
                  the invoice date.

5.5.2             The Seller will give the Buyer written notice  of  any  amount
                  (whether  under  this  Agreement  or under any other agreement
                  between the Buyer and the Seller and  whether  at  the  stated
                  maturity of such amount, by acceleration or otherwise) that is
                  due and payable by the Buyer or its Affiliates and is not paid
                  in full in immediately available funds on the date due. *  the
                  Seller will have the right to debit and apply, in whole or  in
                  part,  the  unused  amount of any credit made available by the
                  Seller to the Buyer against such unpaid amount.   The Seller's
                  rights  under this Clause  5.5.2  are in addition to any other
                  rights the Seller may have at contract or at law  and  do  not
                  contravene its rights under Clause 21 herein.

5.6               Overdue Payments

5.6.1             If one or more Predelivery Payments in respect of any Aircraft
                  is or are  received  after  the due date  specified  in Clause
                  5.2.3,  such  that the  aggregate  number  of days of delay in
                  respect of such Aircraft  reaches thirty (30), then the Seller
                  will have the right to set back the Scheduled  Delivery  Month
                  for such  Aircraft  by a period  of one (1)  month  for  every
                  thirty (30) days of such delay.

                  Furthermore,  if such delays in payment exceed sixty (60) days
                  in the aggregate  for any  Aircraft,  in addition to any other
                  rights the Seller  may have under  Clause 21, the Seller  will
                  have  no  obligation  to  deliver  such  Aircraft  within  the
                  Scheduled Delivery Month as modified pursuant to the preceding
                  paragraph.  Upon  receipt  of the  full  amount  of  all  late
                  Predelivery Payments,  together with interest due under Clause
                  5.6,  provided  that the Seller has not exercised its right of
                  termination  under Clause 21, the Seller will inform the Buyer
                  of  a  new  Scheduled   Delivery   Month  for  such  Aircraft,
                  consistent  with Seller's  other  commitments  and  production
                  capabilities.

                  The Seller's rights under this Clause 5.6.1 are in addition to
                  any other rights and remedies available to the Seller.

5.6.2             If any payment due the Seller is not received by the Seller on
                  the date or dates agreed on  between the Buyer and the Seller,
                  the Seller will have the right to  claim  from  the Buyer  and
                  the  Buyer  will promptly pay to the Seller on receipt of such
                  claim interest at the rate of one  and one-half percent (1.5%)
                  per  month  on  the  amount  of  such  overdue  payment, to be
                  calculated from and including the due date of such payment  to
                  (but  excluding)  the  date  such  payment  is received by the
                  Seller.  The Seller's right to receive such interest  will  be
                  in addition to any other rights of the Seller hereunder or  at
                  law.



5.7               Refund of Predelivery Payments

                  The Buyer will have no right to any  refund of any  Deposit or
                  Predelivery Payment received by the Seller *.

5.8               Proprietary Interest

                  Notwithstanding  any  provision  of law to the  contrary,  the
                  Buyer  will  not,  by  virtue of  anything  contained  in this
                  Agreement  (including,  without  limitation,  any  Predelivery
                  Payments  hereunder,  or any designation or  identification by
                  the Seller of a  particular  Aircraft  as an Aircraft to which
                  any of the  provisions of this Agreement  refers)  acquire any
                  proprietary,  insurable or other  interest  whatsoever  in any
                  Aircraft before Delivery of and payment for such Aircraft,  as
                  provided in this Agreement.

5.9               Payment in Full

                  The  Buyer's   obligation  to  make  payments  to  the  Seller
                  hereunder  will  not be  affected  by and  will be  determined
                  without  regard  to  any  setoff,  counterclaim,   recoupment,
                  defense  or other  right that the Buyer may have  against  the
                  Seller or any other  person.  The Buyer will make all payments
                  to the  Seller  under  this  Agreement  without  deduction  or
                  withholding  on account of, and free from,  any and all taxes,
                  duties,  imposts  or  similar  charges  for which the Buyer is
                  responsible  pursuant to Clause  3.3.2(iii) of this Agreement,
                  except that if the Buyer is  compelled by law to make any such
                  deduction or  withholding  the Buyer will pay such  additional
                  amounts as may be necessary so that the net amount received by
                  the Seller after such deduction or withholding  will equal the
                  amounts  that would have been  received in the absence of such
                  deduction or withholding.  If timely requested by the Buyer in
                  writing,  the Seller will, at the Buyer's  expense,  take such
                  action as the Buyer may reasonably  direct with respect to any
                  claim for taxes, duties,  imposts and similar charges, and any
                  payment  by the  Seller  of such  amounts  will be made  under
                  protest, if, in the Buyer's judgment,  protest is appropriate,
                  and, in the reasonable opinion of the Seller such protest will
                  not involve  significant risk of any sale,  forfeiture or loss
                  of, or creation of any lien on, the  Aircraft or any  interest
                  therein,  or  on  any  other  aircraft   manufactured  by  the
                  Manufacturer  or sold by the Seller.  If payment is made,  the
                  Seller will, at the Buyer's  expense,  take such action as the
                  Buyer may reasonably  direct to recover such payment and will,
                  if requested,  permit the Buyer in the Seller's name to file a
                  claim or  prosecute an action to recover  such  payment.  If a
                  refund is  obtained  by the  Seller of all or any part of such
                  amount,  the Seller  will pay the Buyer the amount of any such
                  refund, plus interest on the refunded taxes, if any.

6 -               INSPECTION

6.1               Inspection Procedures

6.1.1             All  work  to be carried out on the Aircraft and all materials
                  and parts thereof will at all reasonable times during business
                  hours be open to inspection by duly authorized representatives
                  of  the  Buyer  or its designee at the respective works of the
                  Associated Contractors and, if possible, at the works of their
                  respective subcontractors.  These  representatives  will  have
                  access to  such  relevant  technical  data  as are  reasonably
                  necessary for this purpose (except that, if access to any part
                  of the respective works where construction is in  progress  or
                  materials or parts  are  stored  is  restricted  for  security
                  reasons,  the  Associated  Contractors  will  be   allowed   a
                  reasonable  time  to  make  the items available for inspection
                  elsewhere).  The  actual  detailed inspection of the Aircraft,
                  materials  and  parts  thereof  will  take  place  only in the
                  presence of the respective inspection department personnel  of
                  the  Associated   Contractors  or  their  subcontractors.  The
                  procedures for such inspections will be  agreed  on  with  the
                  Buyer before any inspection.

6.1.2             All   inspections,   examinations  and  discussions  with  the
                  Seller's,  the  Associated  Contractors'  or their  respective
                  subcontractors'  engineering  or other  personnel by the Buyer
                  and  its  said  representatives  will be  performed  in such a
                  manner as not to delay or hinder the work to be carried out on
                  the Aircraft or the proper  performance of this Agreement.  In
                  no event will the Buyer or its representatives be permitted to
                  inspect any aircraft other than the Aircraft.

6.2      Representatives

                  For the  purposes  of Clause 6.1 above,  at a mutually  agreed
                  date that will not,  in any event,  be later than  twelve (12)
                  months  before  the  date  on  which  the  first  Aircraft  is
                  scheduled  to be  delivered  to the  Buyer,  the  Seller  will
                  furnish  free-of-charge  adequate  secretarial  assistance and
                  suitable office space,  office  equipment and facilities in or
                  conveniently located with respect to the Delivery Location for
                  the use of not more than four (4) representatives of the Buyer
                  during the  aforementioned  period.  The Seller  will  provide
                  telecommunications  facilities  at  the  Buyer's  cost  to  be
                  invoiced on a monthly basis.

10.


<PAGE>


7 -      CERTIFICATION

7.1               Type Certification

                  The A318  aircraft will be and the A319 aircraft has been type
                  certificated  under JAA procedures for joint  certification in
                  the transport category.  The Seller will obtain or cause to be
                  obtained   the   relevant   type    certificate   (the   "Type
                  Certificate")  to allow the  issuance  of the  Certificate  of
                  Airworthiness for Export.

7.2               Certificate of Airworthiness for Export

                  Subject to the provisions of Clause 7.3, each Aircraft will be
                  delivered to the Buyer with the  Certificate of  Airworthiness
                  for Export  which,  assuming  compliance by the Buyer with all
                  requirements  of the FAA other than those  applicable  only to
                  the  Aircraft,  will entitle the Buyer (or an eligible  person
                  under then applicable law) to obtain at the time of Delivery a
                  Standard  Airworthiness  Certificate  issued pursuant to Title
                  14, Part 21 of the U.S. Code of Federal Regulations.

7.3               Specification  Changes  Before  Delivery:   Export  and Import
                  Requirements


7.3.1             If, any time before the date on which the  Aircraft  is  Ready
                  for  Delivery,  any  law,  rule  or  regulation  is   enacted,
                  promulgated, becomes effective and/or an interpretation of any
                  law, rule  or regulation is issued that requires any change to
                  the   Specification   for   the  purposes  of  obtaining   the
                  Certificate  of  Airworthiness for Export (a "Change in Law"),
                  the Seller will make the required modification and the parties
                  hereto will sign an SCN that specifies the effects, if any, on
                  the  guaranteed  performances,  weights,   interchangeability,
                  Delivery  Date,  price  of  the   Aircraft  and  text  of  the
                  Specification.

7.3.2             The Seller will as far as practicable  (in its sole discretion
                  and without  prejudice to Clause 7.3.3 (ii)) take into account
                  the  information  available to it concerning any proposed law,
                  rule or  regulation  or  interpretation  that  could  become a
                  Change in Law,  in order to  minimize  the costs of changes to
                  the Specification as a result of such proposed law, regulation
                  or  interpretation  becoming  effective  before the applicable
                  Aircraft is Ready for Delivery.

7.3.3             The  cost  of  implementing  the  modifications referred to in
                  Clause 7.3.1 above will be

                  (i)      for the account of the Seller if a Change in Law
                           becomes effective before the date of  this Agreement,
                           and

                  (ii)     shared  equally  by the  Seller  and the  Buyer  if a
                           Change  in Law  becomes  effective  after the date of
                           this Agreement.

7.3.4             Notwithstanding  the provisions of Clauses 7.3.3 (i) and (ii),
                  if a Change in Law relates to the  Propulsion  Systems and, in
                  particular,  to engine accessories,  quick engine change units
                  or thrust  reversers,  the costs  will be borne in  accordance
                  with such  arrangements as may be made separately  between the
                  Buyer and the Propulsion Systems manufacturer; the Seller will
                  have no obligation with respect thereto.

7.4               Specification Changes After Delivery

                  Clause 7.3 will not require the Seller to make any changes  or
                  modifications to, or to make any payments or  take  any  other
                  action with respect to,any Aircraft that is Ready for Delivery
                  before   the compliance date of any law or regulation referred
                  to in Clause 7.3. Any such changes or modifications made to an
                  Aircraft after it is Ready for Delivery will be at the Buyer's
                  expense.

7.5               Seller's Responsibility

                  Except  as set forth in this  Clause 7 and as may be  required
                  under Clause 9.3.1,  the Seller will not be required to obtain
                  any certificate or approval with respect to the Aircraft.




<PAGE>


8 -               TECHNICAL ACCEPTANCE


8.1               Technical Acceptance Process

8.1.1             Prior  to  Delivery,    the   Aircraft    will   undergo   the
                  Manufacturer's approved  technical  acceptance  process,  with
                  such  variations  as  may  be  proposed  by  the  Seller   and
                  reasonably acceptable to the  Buyer (the "Technical Acceptance
                  Process"). Satisfactory completion of the Technical Acceptance
                  Process will demonstrate the satisfactory functioning  of  the
                  Aircraft and will be deemed to demonstrate compliance with the
                  Specification. If the Aircraft fails to complete the Technical
                  Acceptance Process satisfactorily,  the  Seller  will  without
                  hindrance f rom  the  Buyer  be  entitled  to  carry  out  any
                  necessary  changes  and,  as  so on as practicable thereafter,
                  resubmit the Aircraft  in  order  to  complete  the  Technical
                  Acceptance Process.  On any such  resubmission,  the Technical
                  Acceptance Process will include such additional tests  as  are
                  necessary to demonstrate that  the  repairs  or  modifications
                  have  not  adversely  affected  other systems or components of
                  the Aircraft.


8.1.2             The Technical Acceptance Process will

                  (i)      start  on  a date notified by the Seller to the Buyer
                           at least * days in advance,

                  (ii)     take place at the Delivery Location,

                  (iii)    be carried out by the personnel of the Seller, and

                  (iv)     include a technical acceptance flight, which will not
                           exceed  three (3) hours,  unless an extended  time is
                           reasonably  necessary to demonstrate the satisfactory
                           functioning of the Aircraft.

8.2               Buyer's Attendance

8.2.1             The Buyer will be entitled to attend the Technical  Acceptance
                  Process.

8.2.2             If  the  Buyer  elects  to  attend   the  Technical Acceptance
                  Process, the Buyer

                  (i)      will  cooperate  in  complying  with  the  reasonable
                           requirements  of the Seller,  with the  intention  of
                           completing the Technical  Acceptance Process within *
                           Working Days, and

                  (ii)     may have a maximum of four (4) of its representatives
                           (no more than  three (3) of whom will have  access to
                           the cockpit at any one time)  accompany  the Seller's
                           representatives  on a  technical  acceptance  flight,
                           during which the Buyer's  representatives will comply
                           with    the     instructions    of    the    Seller's
                           representatives.

8.2.3             If the  Buyer  does not  attend or fails to  cooperate  in the
                  Technical  Acceptance Process,  the Seller will be entitled to
                  complete the Technical  Acceptance Process without the Buyer's
                  attendance,  and, * the Buyer will be deemed to have  accepted
                  the  Technical  Acceptance  Process  as  satisfactory  in  all
                  respects. *.

                  The Seller will make  available  such data with respect to the
                  Technical  Acceptance  Process  as the  Buyer  may  reasonably
                  request.

8.3               Certificate of Acceptance

                  Upon (i)  successful  completion of the  Technical  Acceptance
                  Process and (ii) issuance of the Certificate of  Airworthiness
                  for Export,  the Buyer will,  on or before the Delivery  Date,
                  sign and deliver to the Seller a certificate  of acceptance in
                  respect  of  the  Aircraft  in  the  form  of  Exhibit  D (the
                  "Certificate of Acceptance") hereto.

8.4               Finality of Acceptance

                  The  Buyer's  acceptance  of delivery  of each  Aircraft  will
                  constitute  waiver by the Buyer of any right it may have under
                  the  Uniform  Commercial  Code as  adopted by the State of New
                  York or  otherwise to revoke such  acceptance  for any reason,
                  whether  known  or  unknown  to  the  Buyer  at  the  time  of
                  acceptance.

8.5               Aircraft Utilization

                  The  Seller  will,  without  payment  or other  liability,  be
                  entitled to use the Aircraft  before  Delivery if necessary to
                  obtain the certificates required under Clause 7. Such use will
                  not, in and of itself,  prejudice  the Buyer's  obligation  to
                  accept Delivery hereunder.

                  *

<PAGE>


9 -               DELIVERY

9.1               Delivery Schedule

9.1.1             Subject to  Clauses  2, 7, 8, 10 and 18, the Seller  will have
                  the  Aircraft  Ready for  Delivery  at the  Delivery  Location
                  within  the  following  months  (each  a  "Scheduled  Delivery
                  Month").  Where no month is specified but only a quarter,  the
                  Seller will notify the Buyer of the Scheduled  Delivery  Month
                  by * months before the beginning of the quarter.

                  Firm Aircraft No.          Aircraft Type       Delivery
                  -----------------          -------------       --------
                          1                  *
                          2                  *
                          3                  *
                          4                  *
                          5                  *
                          6                  *
                          7                  *
                          8                  *
                          9                  *
                          10                 *
                          11                 *


                  Option Aircraft No.       Aircraft Type         Delivery
                  -------------------       -------------         --------
                          1                  *
                          2                  *
                          3                  *
                          4                  *
                          5                  *
                          6                  *
                          7                  *
                          8                  *
                          9                  *


9.1.2             The  Seller  will  give the Buyer at least *.  Thereafter  the
                  Seller  will  promptly  notify the Buyer of any change in such
                  date necessitated by the conditions of manufacture or flight.

9.2               Delivery

9.2.1             The  Buyer  will  send  its  representatives  to the  Delivery
                  Location to take Delivery within seven (7) days after the date
                  notified to it by the Seller in  accordance  with Clause 9.1.2
                  above on which the Aircraft is to be Ready for Delivery.

9.2.2             The  Seller  will  transfer title to the Aircraft to the Buyer
                  free and clear of all liens, claims, charges  or  encumbrances
                  of any kind whatsoever, provided that the Balance of the Final
                  Contract Price has been paid by the Buyer pursuant  to  Clause
                  5.4 and that the Certificate of Acceptance has been signed and
                  delivered to the Seller pursuant  to  Clause  8.3.  The Seller
                  will provide the Buyer with a bill of  sale  in  the  form  of
                  Exhibit  E  hereto  and  such  other  documentation confirming
                  transfer of title and receipt of the Final Contract  Price  as
                  may reasonably be requested by the Buyer.  Title  to, property
                  interest in and risk of loss or damage to the Aircraft will be
                  transferred to the Buyer on Delivery.

9.2.3             In respect of each Aircraft that is (a) Ready for Delivery and
                  (b) has been duly tendered to the Buyer  hereunder, should the
                  Buyer fail to

                  (i)      deliver the signed Certificate of  Acceptance  to the
                           Seller on or before the Delivery Date, or

                  (ii)     pay  the  Balance of the Final Contract Price for the
                           Aircraft to the Seller on the Delivery Date,

                  then the Seller  will  retain  title to the  Aircraft  and the
                  Buyer will indemnify and hold the Seller harmless  against any
                  and all  costs  (including  but not  limited  to any  parking,
                  storage  and  insurance  costs)  associated  with the  Buyer's
                  failure to accept  Delivery.  It is understood that the Seller
                  will be obliged only to exercise  reasonable care with respect
                  to the  Aircraft  following  the  Buyer's  failure  to  accept
                  Delivery  and will have no duty to park,  store or insure  the
                  Aircraft  in a manner  inconsistent  with the  Seller's  other
                  business and industrial constraints or obligations.

9.3               Flyaway

9.3.1             The Seller  will  obtain any  licenses,  permits or  approvals
                  required  for the purpose of exporting  the Aircraft  from the
                  Delivery Location, and the Buyer, at its expense, will provide
                  any reasonably necessary information and assistance.

9.3.2             Subject to Clauses 9.3.1 and 3.3.4 hereof, all expenses of, or
                  connected  with,  the  post-Delivery  flight from the Delivery
                  Location  will be borne by the  Buyer.  The  Buyer  will  make
                  direct  arrangements with the supplying companies for the fuel
                  and oil required for all post-Delivery flights.


<PAGE>


10 -              EXCUSABLE DELAY AND TOTAL LOSS

10.1              Scope of Excusable Delay

                  Neither the Seller nor the  Manufacturer  will be  responsible
                  for or be  deemed to be in  default  on  account  of delays in
                  delivery or failure to deliver or otherwise in the performance
                  of this Agreement or any part hereof due to causes  reasonably
                  beyond the  Seller's,  the  Manufacturer's  or any  Associated
                  Contractor's control ("Excusable Delay"),  including,  but not
                  limited  to:  (i)  acts of God or the  public  enemy,  natural
                  disasters,  fires,  floods,  storms beyond ordinary  strength,
                  explosions   or    earthquakes;    epidemics   or   quarantine
                  restrictions;  serious accidents;  total or constructive total
                  loss; any law,  decision,  regulation,  directive or other act
                  (whether or not having the force of law) of any  government or
                  of the Council of the European  Community or the Commission of
                  the European  Community or of any  national,  Federal,  State,
                  municipal or other governmental department, commission, board,
                  bureau, agency, court or instrumentality, domestic or foreign;
                  governmental  priorities,   regulations  or  orders  affecting
                  allocation of materials,  facilities or a completed  Aircraft;
                  war, civil war or warlike operations,  terrorism, insurrection
                  or riots; failure of transportation; strikes or labor troubles
                  causing cessation, slow down or interruption of work; delay in
                  obtaining any airworthiness or type  certification;  inability
                  after  due  and  timely   diligence   to  procure   materials,
                  accessories,   equipment  or  parts;   general   hindrance  in
                  transportation;  or failure of a subcontractor  or Supplier to
                  furnish  materials,  components,   accessories,  equipment  or
                  parts;  (ii) any delay caused  directly or  indirectly  by the
                  action or inaction  of the Buyer;  and (iii) delay in delivery
                  or  otherwise  in the  performance  of this  Agreement  by the
                  Seller  due in whole or in part to any delay in or  failure of
                  the delivery of, or any other event or  circumstance  relating
                  to,  the  Propulsion  Systems  or Buyer  Furnished  Equipment.
                  Notwithstanding  the  foregoing,  Excusable  Delays  will  not
                  include   any   delay   occasioned   by  the   Seller's,   the
                  Manufacturer's  or  any  Associated   Contractor's   fault  or
                  negligence.

10.2              Consequences of Excusable Delay

                  If an Excusable Delay occurs the Seller will

                  (i)      notify the Buyer of such Excusable Delay * as soon as
                           practicable after becoming aware of the same;

                  (ii)     not be deemed to be in default in the performance  of
                           its  obligations  hereunder  as  a  result   of  such
                           Excusable Delay

                  (iii)    *

                  (iv)     not be responsible for any damages arising from or in
                           connection  with  such  Excusable  Delay  suffered or
                           incurred by the Buyer;

                  (v)      as soon as practicable after the removal of the cause
                           of the delay resume  performance  of its  obligations
                           under this  Agreement and in  particular  will notify
                           the Buyer of the revised Scheduled Delivery Month.

10.3              Termination on Excusable Delay

10.3.1            If the Delivery of any Aircraft is delayed as a result  of  an
                  Excusable  Delay  for a period of more than twelve (12) months
                  after the last day  of  the  Scheduled  Delivery  Month,  then
                  either  party may terminate this Agreement with respect to the
                  affected Aircraft, by giving written notice to the other party
                  within thirty (30) days  after  the  expiration of such twelve
                  (12)month period.  However,  the Buyer will not be entitled to
                  terminate this  Agreement  pursuant  to  this  Clause  if  the
                  Excusable Delay is caused directly or indirectly by the action
                  or inaction of the Buyer.



10.3.2            In the event that the Seller  notifies  the Buyer of a revised
                  Scheduled  Delivery  Month  pursuant  to  Clause  10.2(v),  in
                  respect of a delay in  Delivery  of an  Aircraft  of more than
                  twelve  (12)  months  after  the  last  day of  the  Scheduled
                  Delivery Month, then either party may terminate this Agreement
                  with respect to the  affected  Aircraft.  Termination  will be
                  made by giving written notice to the other party within thirty
                  (30) days after the Buyer's receipt of the notice of a revised
                  Scheduled Delivery Month.

10.3.3            If this Agreement is not terminated under the terms of  Clause
                  10.3.1 or 10.3.2 above,  then  the  Seller will be entitled to
                  reschedule Delivery. In the case of delays described in Clause
                  10.3.1, *.  In the case of delays described in  Clause 10.3.2,
                  the new Scheduled Delivery  Month  will be the month specified
                  in the notice delivered  pursuant to  Clause 10.2.1 (iv).  The
                  Seller will notify the  Buyer  of  the  new Scheduled Delivery
                  Month after the thirty (30) day period  referred  to in Clause
                  10.3.1 or 10.3.2, and this new Scheduled Delivery  Month  will
                  be deemed to be  an  amendment  to  the  applicable  Scheduled
                  Delivery Month in Clause 9.1.1 of the Agreement.



10.4              Total Loss:  Lost, Destroyed or Damaged Aircraft

                  If, before delivery  thereof,  an Aircraft is lost,  destroyed
                  or, in the  reasonable  opinion of the Seller,  damaged beyond
                  economic  repair ("Total  Loss"),  then the Seller will notify
                  the Buyer to this effect as soon as reasonably  possible.  The
                  Seller will include in its notice, or as soon after the notice
                  as possible, a revised Scheduled Delivery Month, which will be
                  the earliest date that an aircraft to replace the Aircraft may
                  be delivered to the Buyer  consistent  with the Seller's other
                  obligations and production capabilities. However, in the event
                  the specified  revised  Scheduled  Delivery Month is more than
                  twelve  (12)  months  after  the  last  day  of  the  original
                  Scheduled  Delivery Month,  then this Agreement will terminate
                  with respect to such  Aircraft  unless the Buyer  notifies the
                  Seller  within  one (1)  month of the date of  receipt  of the
                  Seller's  notice  that it  desires  the  Seller  to  provide a
                  replacement  aircraft  during the month quoted in the Seller's
                  notice, in which case the parties will execute an amendment to
                  this  Agreement  recording  the  variation  in  the  Scheduled
                  Delivery  Month.  The  other  terms  and  conditions  of  this
                  Agreement  applicable  to  such  Aircraft  will  apply  to the
                  replacement aircraft.

                  Notwithstanding  the above,  nothing  herein will  require the
                  Seller to  manufacture  and deliver a replacement  aircraft if
                  manufacture    would   require   the   reactivation   of   the
                  Manufacturer's  production  line for the  model or  series  of
                  aircraft that includes the Aircraft.

10.5              Termination Rights Exclusive

                  In the event that this Agreement is terminated as provided for
                  under the terms of Clauses 10.3 or 10.4, such termination will
                  discharge  all  obligations  and  liabilities  of the  parties
                  hereunder   with  respect  to  such   affected   Aircraft  and
                  undelivered material, services, data or other items applicable
                  thereto and to be furnished  hereunder  and neither party will
                  have any claim against the other for any loss  resulting  from
                  such nondelivery,  *. The Seller will in no circumstances have
                  any liability whatsoever for Excusable Delay other than as set
                  forth in this Clause 10.

10.6              REMEDIES

                  THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE
                  BUYER FOR EXCUSABLE  DELAYS OR FAILURE TO DELIVER DUE TO TOTAL
                  LOSS, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD
                  OTHERWISE BE ENTITLED IN RESPECT THEREOF,  INCLUDING,  WITHOUT
                  LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES
                  OR  SPECIFIC  PERFORMANCE.  THE BUYER WILL NOT BE  ENTITLED TO
                  CLAIM THE REMEDIES  AND RECEIVE THE BENEFITS  PROVIDED IN THIS
                  CLAUSE 10 TO THE EXTENT THE DELAY  REFERRED  TO IN THIS CLAUSE
                  10 IS  CAUSED BY THE  NEGLIGENCE  OR FAULT OF THE BUYER OR ITS
                  REPRESENTATIVES.


<PAGE>


11 -              INEXCUSABLE DELAY

11.1              Liquidated Damages

                  Should  an  Aircraft  not be Ready for  Delivery  to the Buyer
                  within  thirty (30) days after the * last day of the Scheduled
                  Delivery  Month (as such  month  may be  changed  pursuant  to
                  Clauses 2, 7 or 10) (*, the "Delivery Period"), and such delay
                  is not as a result of Excusable Delay or Total Loss, then such
                  delay  will be termed an  "Inexcusable  Delay,"  and the Buyer
                  will  have the  right to claim,  and the  Seller  will pay the
                  Buyer,  liquidated damages of US $ * (US dollars--* ) for each
                  day of Inexcusable Delay,  starting on the first day after the
                  Delivery Period.

                  The amount of  liquidated  damages will in no event exceed the
                  total  of US $ *  (US  dollars--  *) in  respect  of  any  one
                  Aircraft.

                  The  Buyer's  right to  liquidated  damages  in  respect of an
                  Aircraft is  conditional  on the Buyer's  submitting a written
                  claim for liquidated damages to the Seller, as applicable, not
                  later than (i) thirty (30) days after  Delivery or (ii) thirty
                  (30) days after a termination under Clause 11.3 below.

11.2              Renegotiation

                  If as a result  of an  Inexcusable  Delay,  Delivery  does not
                  occur  within six (6) months after the  Delivery  Period,  the
                  Buyer will have the right,  exercisable  by written  notice to
                  the Seller given  between  fifteen (15) days and one (1) month
                  after  the six (6)  months,  to  require  from  the  Seller  a
                  renegotiation of the Scheduled Delivery Month for the affected
                  Aircraft.  Unless  otherwise agreed between the Seller and the
                  Buyer during such  renegotiation,  the said renegotiation will
                  not prejudice the Buyer's right to receive  liquidated damages
                  in   accordance   with   Clause  11.1  during  the  period  of
                  Inexcusable Delay.

11.3              Termination

                  If as a result  of an  Inexcusable  Delay,  Delivery  does not
                  occur within twelve (12) months after the Delivery  Period and
                  the parties have not  renegotiated  the Delivery Date pursuant
                  to  Clause  11.3,  then  both  parties  will  have the  right,
                  exercisable  by  written  notice  to the  other  party,  given
                  between  one (1) and two (2)  months  after  the  twelve  (12)
                  months, to terminate this Agreement in respect of the affected
                  Aircraft.  In the event of termination pursuant to this Clause
                  11.2,  neither  party will have any claim  against  the other,
                  except that the Seller will pay to the Buyer,  any amounts due
                  pursuant to Clause 11.1 and will pay the Buyer an amount equal
                  to the Predelivery Payments received from the Buyer in respect
                  of the affected Aircraft.

11.4              Setoff Payments

                  Notwithstanding anything to the contrary contained herein, the
                  Seller  will  have  the  right  to  apply  any  and  all  sums
                  previously  paid by the Buyer to the Seller with  respect to a
                  terminated  Aircraft to the  payment of any other  amounts the
                  Buyer  owes the  Seller  or any  Affiliate  thereof  under any
                  agreement  between  them,  before  being  required to make any
                  payments under 11.1 or 11.3.

11.5              REMEDIES

                  THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE
                  BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER ONE OR MORE
                  AIRCRAFT UNDER THIS  AGREEMENT,  OTHER THAN (A) SUCH DELAYS AS
                  ARE COVERED BY CLAUSE 10, AND *, THE BUYER  HEREBY  WAIVES ALL
                  RIGHTS TO WHICH IT WOULD  OTHERWISE  BE  ENTITLED  IN  RESPECT
                  THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL
                  OR CONSEQUENTIAL  DAMAGES OR SPECIFIC  PERFORMANCE.  THE BUYER
                  WILL NOT BE  ENTITLED  TO CLAIM THE  REMEDIES  AND RECEIVE THE
                  BENEFITS  PROVIDED IN THIS CLAUSE 11 WHERE THE DELAY  REFERRED
                  TO IN THIS CLAUSE 11 IS CAUSED BY THE  NEGLIGENCE  OR FAULT OF
                  THE BUYER OR ITS REPRESENTATIVES.


<PAGE>


12 -              WARRANTIES AND SERVICE LIFE POLICY

                  The Seller  represents and warrants that the  Manufacturer has
                  provided to the Seller the  following  Warranty,  Service Life
                  Policy,  Supplier  Warranties  and Interface  Commitment  with
                  respect to the  Aircraft,  subject  to the terms,  conditions,
                  limitations and restrictions  (including,  but not limited to,
                  the  Exclusivity  of  Warranties  and General  Limitations  of
                  Liability and Duplicate  Remedies  provisions)  as hereinafter
                  set out,  and that the same are in full  force and  effect and
                  have not been amended. The Seller hereby assigns to the Buyer,
                  and the Buyer hereby  accepts,  all of the Seller's rights and
                  obligations  as the "Buyer" under the said  Warranty,  Service
                  Life Policy, Supplier Warranties and Interface Commitment, and
                  the  Seller  subrogates  the  Buyer  to all  such  rights  and
                  obligations  in respect  of the  Aircraft.  The Seller  hereby
                  warrants to the Buyer that (i) it has all requisite  authority
                  to  make  the  foregoing  assignment  to  and  to  effect  the
                  foregoing  subrogation  in  favor  of  the  Buyer,  (ii)  such
                  assignment  and  subrogation  are  effective  to confer on the
                  Buyer  all of the  foregoing  rights  and  obligations  of the
                  Seller, and (iii) the Seller will not enter into any amendment
                  of the  provisions  so  assigned  without  the  prior  written
                  consent of the Buyer.

                  It is  understood  that, in the  provisions  below between the
                  words QUOTE and UNQUOTE,  capitalized  terms have the meanings
                  assigned  thereto in this Agreement,  except that (i) the term
                  "Seller,"   which  means  the   Manufacturer  as  between  the
                  Manufacturer  and the Seller,  also means the  Manufacturer in
                  this  Agreement,  and (ii) the term  "Buyer,"  which means the
                  Seller as between the Manufacturer  and the Seller,  means the
                  Buyer in this Agreement.

QUOTE

12.1              WARRANTY

12.1.1            Nature of Warranty

                  Subject  to the  limitations  and  conditions  as  hereinafter
                  provided,  and except as provided in Clause 12.1.2, the Seller
                  warrants to the Buyer that each  Aircraft  and each  Warranted
                  Part will at the time of delivery to the Buyer:

                  (i)      be free from defects in material,

                  (ii)     be  free  from  defects  in  workmanship,  including,
                           without limitation, processes of manufacture,

                  (iii)    be free from defects in  design (including,   without
                           limitation,  selection of materials) having regard to
                           the state of the art at the date of such design, and

                  (iv)     be free from defects arising  from failure to conform
                           to the  Specification,  except  as to those  portions
                           of the Specification  that are expressly  stated   in
                           the Specification to be estimates  or  approximations
                           or design aims.

                  For the purposes of this Agreement,  the term "Warranted Part"
                  will  mean  any  Seller  proprietary   component,   equipment,
                  accessory  or part that at the time of delivery of an Aircraft
                  (a) is installed on such Aircraft,  (b) is manufactured to the
                  detail design of the Seller or a  subcontractor  of it and (c)
                  bears a part number of the Seller.

12.1.2            Exceptions

                  The  warranties  set forth in Clause  12.1.1 will not apply to
                  Buyer Furnished Equipment,  nor to the Propulsion Systems, nor
                  to any  component,  accessory,  equipment or part purchased by
                  the Buyer that is not a  Warranted  Part,  provided,  however,
                  that:

                  (i)      any defect in the Seller's  workmanship in respect of
                           the  installation  of  such  items  in the  Aircraft,
                           including any failure by the Seller to conform to the
                           installation  instructions  of the  manufacturers  of
                           such items that  invalidates any applicable  warranty
                           from such manufacturers,  will constitute a defect in
                           workmanship  for the  purpose of this Clause 12.1 and
                           be  covered  by the  warranty  set  forth  in  Clause
                           12.1.1(ii), and

                  (ii)     any defect  inherent  in the  Seller's  design of the
                           installation,  in view of the state of the art at the
                           date of such  design,  that  impairs  the use of such
                           items  will  constitute  a defect in  design  for the
                           purposes  of this  Clause  12.1 and be covered by the
                           warranty set forth in Clause 12.1.1(iii).

12.1.3            Warranty Periods

                  The   warranties   described  in  Clauses  12.1.1  and  12.1.2
                  hereinabove  will be  limited  to those  defects  that  become
                  apparent  within  thirty-six (36) months after delivery of the
                  affected Aircraft.


<PAGE>



12.1.4            Limitations of Warranty

12.1.4.1          The Buyer's remedy and the Seller's obligation  and  liability
                  under Clauses 12.1.1 and 12.1.2 hereinabove are limited to, at
                  the  Seller's  expense  and option, the repair, replacement or
                  correction of, or the supply of modification  kits  rectifying
                  the defect to any  defective  Warranted  Part.  Alternatively,
                  the Seller may, at its option and with  the  Buyer's  consent,
                  furnish a credit to the Buyer for the future purchase of goods
                  and services (not including Aircraft) equal to  the  price  at
                  which the Buyer is then entitled to acquire a  replacement for
                  the defective Warranted  Part.  Nothing  herein contained will
                  obligate the Seller  to  correct any failure to conform to the
                  Specification  with  respect   to    components,    equipment,
                  accessories or parts that the parties agree in a writing other
                  than the Certificate of  Acceptance at the time of delivery of
                  the affected Aircraft are acceptable deviations  or  have   no
                  material adverse effect on the use, operation  or  performance
                  of an Aircraft.


12.1.4.2          In the event that the Seller  corrects  a  defect  covered  by
                  Clause 12.1.1(iii) that becomes apparent within the applicable
                  period set forth in Clause 12.1.3, the Seller will also, if so
                  requested by the Buyer in writing, make such correction in any
                  Aircraft that has not already  been delivered  to  the  Buyer.
                  However, the Seller will not be responsible nor deemed  to  be
                  in default on account of any delay in delivery of any Aircraft
                  or otherwise, in respect of performance of this Agreement, due
                  to the Seller's  undertaking  to  make  such  correction  and,
                  rather  than  accept a delay in delivery of any such Aircraft,
                  the Buyer and  the  Seller  may agree to deliver such Aircraft
                  with subsequent correction of the defect by the Buyer  at  the
                  Seller's expense, or the Buyer may elect  to  accept  delivery
                  and thereafter file a Warranty Claim as  though the defect had
                  become apparent immediately after delivery of such Aircraft.

12.1.5            Warranty Claim Requirements

                  The Buyer's  remedy and the Seller's  obligation and liability
                  under this Clause 12.1,  with respect to each claimed  defect,
                  are subject to the following conditions precedent:

                  (i)      the  existence  of a defect covered by the provisions
                           of this Clause 12.1,

                  (ii)     the  Buyer's  having  submitted  to  the Seller proof
                           reasonably   satisfactory   to   the  Seller  of  the
                           existence of a defect covered by  the  provisions  of
                           this Clause 12.1,

                  (iii)    the  defect's  having  become  apparent  within   the
                           applicable warranty period, as set  forth  in  Clause
                           12.1.3,

                  (iv)     the  defect's  not  having  resulted  from any act or
                           omission of the Buyer, including, but not limited to,
                           any  failure to operate  and  maintain  the  affected
                           Aircraft  or part  thereof  in  accordance  with  the
                           standards  or any  matter  set  forth or  covered  in
                           Clause 12.1.10,

                  (v)      the Buyer's  having  returned  as soon as  reasonably
                           practicable   the   Warranted   Part  claimed  to  be
                           defective  to  such  repair   facilities  as  may  be
                           designated  by the  Seller,  except  where  the Buyer
                           elects  to  repair  a  defective  Warranted  Part  in
                           accordance with the provisions of Clause 12.1.7, and

                  (vi)     the  Seller's   having   received  a  Warranty  Claim
                           fulfilling the  conditions of and in accordance  with
                           the provisions of Clause 12.1.6 below.

12.1.6            Warranty Administration

                  The warranties  set forth in Clause 12.1 will be  administered
                  as hereinafter provided:

                  (i)      Claim Determination

                           Warranty  Claim  determination  by the Seller will be
                           reasonably  based on the claim details,  reports from
                           the Seller's  representative,  historical  data logs,
                           inspections,  tests,  findings during repair,  defect
                           analysis   and   other    suitable    documents   and
                           information.

                  (ii)     Transportation Costs

                           Transportation costs associated with the sending of a
                           Warranted   Part  claimed  to  be  defective  to  the
                           facilities  designated by the Seller will be borne by
                           the Buyer. *.

                  (iii)    Return of an Aircraft

                           If an  Aircraft  must  be  returned  to the  Seller's
                           facility or to a repair  facility  designated  by the
                           Seller for  accomplishment  of a warranted  repair or
                           correction, pursuant to a Warranty Claim, *.

                           If the  Seller  desires  to  accomplish  a  warranted
                           repair or  correction  at the Buyer's  facilities  in
                           Denver or  wherever  the  Aircraft is located and the
                           Buyer nevertheless  desires to return the Aircraft to
                           the Seller for such repair or correction,  the Seller
                           will  designate the facility where the repair will be
                           accomplished, and the Buyer will pay the costs of the
                           ferry flights to and from such facility.

                  (iv)     On-Aircraft Work by the Seller

                           If the  work to  accomplish  a repair  or  correction
                           pursuant to a Warranty Claim must be  accomplished by
                           a  Seller   working   party,   the  Seller   will  be
                           responsible for all costs of labor and material *.

                           If such repair or  correction  is not  required to be
                           accomplished by a Seller working party, but the Buyer
                           nevertheless   desires  a  Seller  working  party  to
                           accomplish  the same,  the Seller will be responsible
                           for all costs of labor and material *.

                           If the repair or  correction is performed by a Seller
                           working party, the Seller and the Buyer will agree on
                           a schedule and place for the work to be performed.

                  (v)      Warranty Claim Substantiation

                           For each claim  under this Clause 12.1 the Buyer will
                           give  written  notice to the Seller that  contains at
                           least the data listed below with respect to a part or
                           Aircraft, as applicable ("Warranty Claim"). The Buyer
                           will * give the Seller  such  Warranty  Claim  within
                           sixty (60) days of discovering the defect giving rise
                           to such Warranty Claim, *.

                           (a)      Description of defect and action  taken,  if
                                    any.

                           (b)      Date of incident and/or of removal.

                           (c)      Description of the defective part.

                           (d)      Part number.

                           (e)      Serial number (if applicable).

                           (f)      Position on  Aircraft,  according to Catalog
                                    Sequence  Number  (CSN)  of the  Illustrated
                                    Parts Catalog,  Component Maintenance Manual
                                    or   Structural   Repair   Manual  (as  such
                                    documents  are  defined  in  Clause  14  and
                                    Exhibit F hereto) as applicable.

                           (g)      Total  flying  hours  or  calendar times, as
                                    applicable, at the date of  appearance  of a
                                    defect.

                           (h)      Time  since  last  shop visit at the date of
                                    defect appearance.

                           (i)      Manufacturer's serial number of the Aircraft
                                    and/or its registration number.

                           (j)      Aircraft total flying hours and/or number of
                                    landings at the date of defect appearance.

                           (k)      Claim number.

                           (l)      Date of claim.

                           (m)      Date  of  delivery of an Aircraft or part to
                                    the Buyer.

                           Claims are to be addressed as follows:

                           AIRBUS INDUSTRIE
                           CUSTOMER SERVICE DIVISION SG-C
                           WARRANTY ADMINISTRATION
                           1, ROND-POINT MAURICE BELLONTE
                           B.P. 33
                           F-31707 BLAGNAC
                           FRANCE

                  (vi)     Replacements

                           Replacements  made  pursuant to this Clause 12.1 will
                           be made within the lead time  defined in the Seller's
                           Spare  Parts  Price  Catalog.   Replaced  components,
                           equipment,  accessories  or  parts  will  become  the
                           Seller's  property.  The  Seller  will * to  expedite
                           replacement upon the Buyer's request.

                           Title to and risk of loss of any Aircraft, component,
                           accessory, equipment or part returned by the Buyer to
                           the Seller  will at all times  remain with the Buyer,
                           except that (i) when the Seller has  possession  of a
                           returned Aircraft, component, accessory, equipment or
                           part to which the Buyer has title,  the  Seller  will
                           have such responsibility therefor as is chargeable by
                           law to a bailee for hire,  but the Seller will not be
                           liable for loss of use, and (ii) title to and risk of
                           loss of a returned component, accessory, equipment or
                           part  will  pass to the  Seller  on  shipment  by the
                           Seller  to the  Buyer  of any item  furnished  by the
                           Seller to the Buyer as a replacement  therefor.  Upon
                           the Seller's shipment to the Buyer of any replacement
                           component,  accessory,  equipment or part provided by
                           the Seller pursuant to this Clause 12.1, title to and
                           risk of loss of such component,  accessory, equipment
                           or part will pass to the Buyer.

                  (vii)    Rejection

                           The   Seller   will   provide    reasonable   written
                           substantiation  in case of  rejection  of a  Warranty
                           Claim.   The  Buyer   will  (a)  pay  to  the  Seller
                           reasonable  inspection  and test charges  incurred by
                           the Seller in connection with the  investigation  and
                           processing of a rejected  Warranty  Claim and (b) pay
                           the costs of transportation to the ASCO Spares Center
                           in  Ashburn,  VA,  insurance,  and  any  other  costs
                           associated  with the sending of any Warranted Part or
                           any  other  item,  equipment,  component  or part for
                           which the Seller rejects the Buyer's Warranty Claim.

                  (viii)   Inspection

                           The  Seller  will  have  the  right  to  inspect  the
                           affected  Aircraft and  documents  and other  records
                           relating  thereto in the event of any Warranty  Claim
                           under this Clause 12.1.

12.1.7            In-house Warranty

                  (i)      Authorization

                  The  Buyer is  hereby  authorized  to  perform  the  repair of
                  Warranted  Parts,  subject to the terms of this Clause  12.1.7
                  ("In-house Warranty").  When the estimated cost of an In-house
                  Warranty  repair  exceeds $* (US  dollars-- *), the Buyer will
                  notify the Seller's  representative of its decision to perform
                  any in-house  repairs before such repairs are  commenced.  The
                  Buyer's notice will include  sufficient  detail  regarding the
                  defect, estimated labor hours and material to allow the Seller
                  to ascertain the  reasonableness  of the estimate.  The Seller
                  will use  reasonable  efforts to ensure a prompt  response and
                  will not unreasonably withhold authorization.

                  (ii)     Conditions of Authorization

                  The Buyer will be entitled to the  benefits  under this Clause
                  12.1.7 for repair of Warranted Parts

                           (a)      only  if  adequate  facilities and qualified
                                    personnel are available to the Buyer,

                           (b)      provided that repairs are  to  be  performed
                                    in   accordance  with  the  Seller's written
                                    instructions    set   forth  in   applicable
                                    Technical Data and Documentation, and

                           (c)      only to the extent specified by the  Seller,
                                    or,   in  the   absence  of   the   Seller's
                                    specifying,   to   the   extent   reasonably
                                    necessary   to   correct   the   defect,  in
                                    accordance with the standards set  forth  in
                                    Clause 12.1.10.

                  (iii)    Seller's Rights

                  The Seller will have the right to have any Warranted  Part, or
                  any part removed therefrom,  which is claimed to be defective,
                  returned to the Seller, as set forth in Clause 12.1.6(ii), if,
                  in the  judgment  of the  Seller,  the  nature  of the  defect
                  requires technical investigation.

                  The   Seller   will   further   have  the   right  to  have  a
                  representative present during the disassembly,  inspection and
                  testing of any Warranted Part claimed to be defective, subject
                  to its presence  being  practical and not unduly  delaying the
                  repair.

                  (iv)      n-house Warranty Claim Substantiation

                  Claims for In-house  Warranty  credit will be filed within the
                  time   period  set  forth  in,  and  will   contain  the  same
                  information   required  in,   Warranty   Claims  under  Clause
                  12.1.6(v) and in addition will include:

                           (a)      a  report of technical findings with respect
                                    to the defect,

                           (b)      for parts required to remedy the defect:

                                    - part numbers,

                                    - serial numbers (if applicable),

                                    - description of the parts,

                                    - quantity of parts,

                                    - unit price of parts,

                                    - total price of parts,

                                    - related Seller's or third party's invoices
                                    (if applicable),

                           (c)      detailed number of labor hours,

                           (d)      agreed In-house Warranty Labor Rate (defined
                                     below in Clause 12.1.7(v) (a)), and

                           (e)      total claim value.

                  (v)      Credit

                  The Buyer's sole remedy,  and the Seller's sole obligation and
                  liability,  in respect of In-house Warranty claims,  will be a
                  credit to the  Buyer's  account.  The  credit  to the  Buyer's
                  account  will be equal to the direct  labor cost  expended  in
                  performing  a  repair  and to the  direct  cost  of  materials
                  incorporated  in the repair.  Such costs will be determined as
                  set forth below.

                  (a)      To determine direct labor costs, only manhours  spent
                           on disassembly, inspection, repair,  reassembly,  and
                           final inspection and test (including  flight tests if
                           flight tests  prove  necessary  to  complete a repair
                           under  the  In-house  Warranty) of the Warranted Part
                           alone  will   be   counted.   Manhours  required  for
                           maintenance work concurrently being  carried  out  on
                           the Aircraft or Warranted Part will  not be included.
                           The manhours counted  as  set  forth  above  will  be
                           multiplied by an agreed hourly labor  rate  of  US$ *
                           (US  dollars--*) at economic conditions prevailing in
                           January 1999 (the "In-house Warranty Labor Rate").

                           The  In-house  Warranty  Labor  Rate  is  subject  to
                           adjustment  annually  by  multiplying  by  the  ratio
                           HEn/HEb. For the purposes of this Subclause 12.1.7(v)
                           only,  HEn is equal to the  Labor  Index  defined  in
                           Exhibit  G hereto  for  January  of the year in which
                           manhours  are  spent  and HEb is equal to such  Labor
                           Index for January 1999.

                  (b)      Direct material costs are determined by the prices at
                           which the Buyer acquired such material, excluding any
                           parts and materials used for overhaul  furnished free
                           of charge by the Seller.

                  (vi)     Limitation on Credit

                  The Buyer will in no event be credited for repair costs (labor
                  and material)  for any Warranted  Part to the extent that such
                  costs exceed

                  (a)      sixty-five  percent  (65%)  of  the  Seller's current
                           catalog price for a  replacement  of  such  defective
                           Warranted Part,

                  (b)      repair  costs  (labor and material)  that  would have
                           resulted if  repairs  had  been  carried  out at  the
                           Seller's facilities or

                  (c)      $* (US  dollars--  *),  unless  the  repair  has been
                           previously  approved by the Seller in accordance with
                           Clause 12.1.7(ii).

                  (vii)    Scrapped Material

                  The Buyer may,  with the  agreement of the  Seller's  Resident
                  Customer  Support  Representative,  scrap  any such  defective
                  parts that are beyond  economic  repair and not  required  for
                  technical evaluation.

                  If the Buyer  does not obtain the  agreement  of the  Seller's
                  Resident Customer Support  Representative to scrap a Warranted
                  Part defective  beyond  economic  repair,  then the Buyer will
                  retain such Warranted Part and any defective part removed from
                  a Warranted  Part during  repair for a period of either * days
                  after  the  date  of  completion  of  repair  or * days  after
                  submission of a claim for In-house  Warranty  credit  relating
                  thereto,  whichever is longer.  Such parts will be returned to
                  the Seller within * days of receipt of the Seller's request to
                  that effect.

                  Scrapped  Warranted  Parts  will be  evidenced  by a record of
                  scrapped material certified by an authorized representative of
                  the Buyer, which will be kept in the Buyer's file for at least
                  the duration of the warranty  periods set forth in this Clause
                  12.1.

                  (viii)   DISCLAIMER OF SELLER LIABILITY FOR BUYER'S REPAIR


                  THE SELLER WILL NOT BE LIABLE FOR ANY RIGHT,  CLAIM OR REMEDY,
                  AND THE BUYER WILL  INDEMNIFY THE SELLER AGAINST THE CLAIMS OF
                  ANY  THIRD  PARTIES  OTHER  THAN  THE   MANUFACTURER  AND  THE
                  ASSOCIATED  CONTRACTORS  AND AFFILIATES OF THE FOREGOING,  AND
                  THEIR  RESPECTIVE  OFFICERS,  DIRECTORS,  EMPLOYEES AND AGENTS
                  (EACH AN "EXCLUDED PERSON"),  FOR PERSONAL INJURIES,  DEATH OR
                  PROPERTY LOSSES DUE TO ANY DEFECT, NONCONFORMANCE OF ANY KIND,
                  ARISING OUT OF OR IN  CONNECTION  WITH ANY REPAIR OF WARRANTED
                  PARTS  UNDERTAKEN BY THE BUYER UNDER THIS SUBCLAUSE  12.1.7 OR
                  ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS SUBCLAUSE
                  12.1.7, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT,
                  OR  IS  PREMISED  ON  ALLEGED,  ACTUAL,  IMPUTED  OR  ORDINARY
                  NEGLIGENCE  OR  INTENTIONAL  ACTS OR OMISSIONS OF THE BUYER OR
                  THE SELLER,  PROVIDED  THAT THE FOREGOING  INDEMNITY  WILL NOT
                  APPLY TO THE EXTENT THAT ANY SUCH CLAIM IS CAUSED BY THE GROSS
                  NEGLIGENCE OR WILLFUL MISCONDUCT OF THE SELLER OR ANY EXCLUDED
                  PERSON.

12.1.8            Warranty Transferability

                  The  warranties  provided  for in  this  Clause  12.1  for any
                  Warranted  Part will  accrue to the  benefit of any airline in
                  revenue  service other than the Buyer,  if the Warranted  Part
                  enters into the  possession of any such airline as a result of
                  a pooling  agreement  between such  airline and the Buyer,  in
                  accordance  with the terms and subject to the  limitations and
                  exclusions of the foregoing  warranties and to applicable laws
                  or regulations.

12.1.9            Warranty for Corrected, Replacement or Repaired Warranted Part

                  Whenever any  Warranted  Part that contains a defect for which
                  the Seller is liable  under  Clause  12.1 has been  corrected,
                  repaired or replaced  pursuant to the terms of this Clause 12,
                  the  period of the  Seller's  warranty  with  respect  to such
                  corrected,  repaired or replacement  Warranted Part, whichever
                  may be the case, will be the remaining portion of the original
                  warranty in respect of such corrected, repaired or replacement
                  Warranted  Part. In the event that a defect is attributable to
                  a defective  repair or  replacement  by the Buyer,  a Warranty
                  Claim  with  respect  to such  defect  will not be  allowable,
                  notwithstanding any subsequent  correction or repair, and will
                  immediately  terminate  the  remaining  warranties  under this
                  Clause 12.1 in respect of the affected  Warranted Part, unless
                  such  defective  repair  is  caused  solely by an error in the
                  Seller's written repair instructions.

12.1.10            Good Airline Operation - Normal Wear and Tear

                  The Buyer's  rights  under this Clause 12.1 are subject to the
                  Aircraft and each  component,  equipment,  accessory  and part
                  thereof being maintained, overhauled, repaired and operated in
                  accordance  with  good  commercial   airline   practice,   all
                  technical  documentation and any other instructions  issued by
                  the  Seller,   the  Suppliers  or  the   manufacturer  of  the
                  Propulsion  Systems and all applicable rules,  regulations and
                  directives of the relevant Aviation Authorities.

                  The Seller's  liability under this Clause 12.1 will not extend
                  to normal wear and tear nor to

                  (i)      any Aircraft or  component,  equipment,  accessory or
                           part  thereof  that has  been  repaired,  altered  or
                           modified  after  delivery  by any  party  in a manner
                           other than that approved by the Seller;

                  (ii)     any  Aircraft or  component,  equipment, accessory or
                           part thereof that has  been  operated  in  a  damaged
                           state; or

                  (iii)    any  component,  equipment,  accessory  or part  from
                           which  the  trademark,  trade  name,  part or  serial
                           number  or  other   identification  marks  have  been
                           removed.

                  The foregoing  limitation of the Seller's  liability  will not
                  apply in the cases of Clause 12.1.10(i) and Clause 12.1.10(ii)
                  above if the Buyer submits evidence satisfactory to the Seller
                  that the defect did not arise from nor was  contributed  to by
                  either of said causes.

12.2              SELLER SERVICE LIFE POLICY

12.2.1            Scope and Definitions

                  In addition to the  warranties set forth in Clause 12.1 above,
                  the Seller  further  agrees that should a Failure occur in any
                  Item, then,  subject to the general conditions and limitations
                  set forth in  Clause  12.2.4  below,  the  provisions  of this
                  Clause 12.2 will apply.

                  For  the   purposes  of  this  Clause  12.2,   the   following
                  definitions will apply:

                  (i)      "Item" means any of the Seller components, equipment,
                           accessories or parts listed in Exhibit C hereto which
                           are  installed  on an Aircraft at any time during the
                           period of effectiveness of the Service Life Policy as
                           defined below in Clause 12.2.2.

                  (ii)     "Failure"  means any  breakage  of, or defect  in, an
                           Item that materially impairs the utility or safety of
                           the Item,  provided that (a) any such breakage of, or
                           defect in, any Item did not result from any  breakage
                           or defect in any other  Aircraft part or component or
                           from any other  extrinsic  force and (b) has occurred
                           or  can   reasonably   be  expected  to  occur  on  a
                           repetitive or fleetwide basis.

12.2.2            Periods and Seller's Undertaking

                  Subject to the general conditions and limitations set forth in
                  Clause  12.2.4  below,  the  Seller  agrees  that if a Failure
                  occurs in an Item  before the  Aircraft  in which such Item is
                  installed  has  completed * (*) flight  cycles or within * (*)
                  years  after the  delivery of the  applicable  Aircraft to the
                  Buyer,  whichever  occurs  first,  the Seller will, at its own
                  discretion,  as promptly as  practicable  and for a price that
                  reflects the Seller's  financial  participation as hereinafter
                  provided, either:

                  (i)      design and furnish to the Buyer a correction for such
                           Item  subject  to a  Failure  and  provide  any parts
                           required  for  such  correction   (including   Seller
                           designed   standard  parts  but  excluding   industry
                           standard parts), or,

                  (ii)     replace such Item.

12.2.3            Seller's Participation in the Cost

                  Any part or Item that the Seller is required to furnish to the
                  Buyer under this  Service Life Policy in  connection  with the
                  correction or  replacement of an Item will be furnished to the
                  Buyer at the Seller's  current sales price therefor,  less the
                  Seller's financial participation,  which will be determined in
                  accordance with the following formula:

                           C  (N  -  T)
                           ------------
                  P =           N

                  where

                  P:       financial participation of the Seller,

                  C:       the Seller's then current sales price for the
                           required Item or required Seller designed parts,

                  and,

                  (i)      T:       total number of flight cycles since delivery
                                    that have been accumulated by the particular
                                    Aircraft  in  which  the  Item  subject to a
                                    Failure was originally installed,

                  and,

                           N:       * flight cycles,

                  or,

                  (ii)     T:       total  time  in months since delivery of the
                                    particular  Aircraft  in  which   the   Item
                                    subject  to   a   Failure   was   originally
                                    installed,

                  and,

                           N:       * months,



whichever of the foregoing clauses (i) and (ii) yields the lower ratio of:

                                     N  -  T

                                        N

12.2.4            General Conditions and Limitations

12.2.4.1          Notwithstanding  Clause 12.2.3, the undertakings given in this
                  Clause  12.2  will not be valid  during  the  warranty  period
                  applicable to an Item under Clause 12.1.3.

12.2.4.2          The Buyer's  remedy and the Seller's  obligation and liability
                  under this  Service Life Policy are subject to  compliance  by
                  the Buyer with the following conditions precedent:

                  (i)      The  Buyer   will   maintain   log  books  and  other
                           historical records with respect to each Item adequate
                           to enable the Seller to determine whether the alleged
                           Failure is covered by this  Service  Life Policy and,
                           if so, to define the  portion of the cost to be borne
                           by the Seller in accordance with Clause 12.2.3 above.

                  (ii)     The  Buyer  will  keep  the  Seller  informed  of any
                           significant   incidents   relating  to  an  Aircraft,
                           howsoever occurring or recorded.

                  (iii)    The  conditions  of  Clause  12.1.10  will  have been
                           complied with.

                  (iv)     The  Buyer   will  carry  out   specific   structural
                           inspection programs for monitoring purposes as may be
                           established  from  time to time by the  Seller.  Such
                           programs will be, to the extent possible,  compatible
                           with the Buyer's operational requirements and will be
                           carried out at the Buyer's expense.  Reports relating
                           thereto will be regularly furnished to the Seller.

                  (v)      In the case of any breakage or defect, the Buyer will
                           * to report the same in writing to the Seller  within
                           *, after any  breakage  or defect in an Item  becomes
                           apparent,  whether or not said breakage or defect can
                           reasonably   be   expected  to  occur  in  any  other
                           Aircraft,  and the Buyer  will  inform  the Seller in
                           sufficient  detail  about the  breakage  or defect to
                           enable the Seller to determine  whether said breakage
                           or defect is subject to this Service Life Policy.

12.2.4.3          Except as otherwise  provided in this Clause  12.2,  any claim
                  under  this  Service  Life  Policy  will  be  administered  as
                  provided  in, and will be subject to the terms and  conditions
                  of, Clause 12.1.6.

12.2.4.4          In   the  event  that  the  Seller  has  issued a modification
                  applicable to an Aircraft, the purpose of which is to avoid  a
                  Failure,   the  Seller  may  elect  to  supply  the  necessary
                  modification  kit free  of  charge or under a pro rata formula
                  established by the Seller.  If such a kit is so offered to the
                  Buyer, then, in respect of such Failure and any Failures  that
                  could ensue therefrom, the validity of the Seller's commitment
                  under  this  Clause  12.2  will  be  subject  to  the  Buyer's
                  incorporating  such  modification  in  the  relevant Aircraft,
                  within a reasonable time,  as promulgated by the Seller and in
                  accordance with the Seller's instructions.

12.2.4.5          THIS  SERVICE  LIFE  POLICY IS NEITHER A WARRANTY, PERFORMANCE
                  GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME
                  COMPONENTS TO CONFORM TO NEW  DEVELOPMENTS  OCCURRING  IN  THE
                  STATE OF AIRFRAME DESIGN AND MANUFACTURING ART.   THE SELLER'S
                  OBLIGATION UNDER THIS SUBCLAUSE 12.2 IS  TO  MAKE  ONLY  THOSE
                  CORRECTIONS  TO  THE ITEMS OR FURNISH REPLACEMENTS THEREFOR AS
                  PROVIDED IN THIS SUBCLAUSE 12.2. THE BUYER'S SOLE  REMEDY  AND
                  RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION  OR  LIABILITY
                  OF THE SELLER ARISING UNDER OR  BY VIRTUE OF THIS SERVICE LIFE
                  POLICY WILL BE IN MONETARY  DAMAGES, LIMITED TO THE AMOUNT THE
                  BUYER  REASONABLY  EXPENDS  IN   PROCURING  A   CORRECTION  OR
                  REPLACEMENT FOR ANY ITEM THAT IS  THE  SUBJECT  OF  A  FAILURE
                  COVERED  BY  THIS  SERVICE  LIFE  POLICY  AND  TO  WHICH  SUCH
                  NONPERFORMANCE  IS  RELATED,  LESS  THE  AMOUNT THAT THE BUYER
                  OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS SUBCLAUSE
                  12.2  IN  RESPECT  OF  SUCH  CORRECTED  OR  REPLACEMENT  ITEM.
                  WITHOUT  LIMITING  THE EXCLUSIVITY  OF  WARRANTIES AND GENERAL
                  LIMITATIONS OF LIABILITY PROVISIONS  SET  FORTH  IN  SUBCLAUSE
                  12.5, THE BUYER HEREBY  WAIVES,  RELEASES  AND  RENOUNCES  ALL
                  CLAIMS  TO  ANY  FURTHER  DIRECT,  INCIDENTAL OR CONSEQUENTIAL
                  DAMAGES, INCLUDING LOSS  OF  PROFITS  AND  ALL  OTHER  RIGHTS,
                  CLAIMS  AND  REMEDIES,  ARISING  UNDER  OR  BY  VIRTUE OF THIS
                  SERVICE LIFE POLICY.


12.2.5            Transferability

                  Except  as  specifically  provided  for in  Clause  20 of this
                  Agreement,  the Buyer's rights under this Clause 12.2 will not
                  be assigned, sold, leased,  transferred or otherwise alienated
                  by operation of law or otherwise,  without the Seller's  prior
                  written consent.

                  Any unauthorized  assignment,  sale, lease,  transfer or other
                  alienation  of the  Buyer's  rights  under this  Service  Life
                  Policy  will,  as  to  the   particular   Aircraft   involved,
                  immediately void this Service Life Policy in its entirety.

12.3              SUPPLIER WARRANTIES

12.3.1            Seller's Support

                  Prior to  delivery  of the first  Aircraft,  the  Seller  will
                  provide the Buyer with the  warranties,  service life policies
                  and patent  indemnities that the Seller has obtained  pursuant
                  to the Supplier Product Support Agreements.

12.3.2            Supplier's Default

12.3.2.1          In  the event that any Supplier under any warranty obtained by
                  the Seller pursuant to Clause 12.3.1  hereof  defaults  in the
                  performance of any material  obligation  under  such  warranty
                  with respect to a Supplier Part, and the  Buyer submits within
                  a reasonable time to the Seller  reasonable  proof  that  such
                  default has occurred, then  Clause 12.1 of this Agreement will
                  apply to the extent it would have  applied  had  such Supplier
                  Part been  a  Warranted  Part  except  that,  for  obligations
                  covered  under  Clause 12.1, the shorter of (i) the Supplier's
                  warranty  period  indicated  in  the  Supplier Product Support
                  Agreements  manual  and  (ii)  the  Seller's  warranty  period
                  indicated in Clause 12.1.3 of this Agreement will apply.

12.3.2.2          In the event that any Supplier under any Supplier service life
                  policy obtained by the Seller pursuant to Clause 12.3.1 hereof
                  defaults in the  performance of any material  obligation  with
                  respect thereto,  and the Buyer submits within reasonable time
                  to the Seller reasonable proof that such default has occurred,
                  then  Clause 12.2 of this  Agreement  will apply to the extent
                  the same would have  applied  had such  component,  equipment,
                  accessory or part been listed in Exhibit C hereto.

12.3.2.3          At the Seller's request,  the Buyer will assign to the Seller,
                  and the  Seller  will be  subrogated  to,  all of the  Buyer's
                  rights  against the  relevant  Supplier,  with  respect to and
                  arising by reason of such  default and the Buyer will  provide
                  reasonable  assistance  to enable the  Seller to  enforce  the
                  rights so assigned.

12.4              INTERFACE COMMITMENT

12.4.1            Interface Problem

                  If  the  Buyer   experiences  any  technical  problem  in  the
                  operation of an Aircraft or its systems due to a  malfunction,
                  the cause of which, after due and reasonable investigation, is
                  not  readily  identifiable  by the Buyer,  but which the Buyer
                  reasonably   believes  to  be   attributable   to  the  design
                  characteristics  of one or more components of the Aircraft (an
                  "Interface  Problem"),  the Seller  will,  if requested by the
                  Buyer, and without additional charge to the Buyer,  except for
                  transportation  of  the  Seller's  personnel  to  the  Buyer's
                  facilities,    promptly   conduct   or   have   conducted   an
                  investigation  and analysis of such problem to  determine,  if
                  possible,  the cause or causes of the problem and to recommend
                  such corrective action as may be feasible,  provided, however,
                  that  if it is  determined,  after  such  due  and  reasonable
                  investigation, that the Interface Problem was due to or caused
                  by any act or omission of the Buyer in its  performance of its
                  obligations hereunder, the Buyer will pay to the Seller *. The
                  Buyer will furnish to the Seller all data and  information  in
                  the Buyer's  possession  relevant to the Interface Problem and
                  will  cooperate with the Seller in the conduct of the Seller's
                  investigations  and  such  tests  as may be  required.  At the
                  conclusion  of such  investigation  the Seller  will  promptly
                  advise the Buyer in writing of the Seller's  opinion as to the
                  cause or  causes of the  Interface  Problem  and the  Seller's
                  recommendations as to corrective action.

12.4.2            Seller's Responsibility

                  If  the  Seller  determines  that  the  Interface  Problem  is
                  primarily  attributable to the design of a Warranted Part, the
                  Seller will, if requested by the Buyer,  correct the design of
                  such Warranted  Part,  pursuant to the terms and conditions of
                  Clause 12.1.

12.4.3            Supplier's Responsibility

                  If  the  Seller  determines  that  the  Interface  Problem  is
                  primarily attributable to the design of any Supplier Part, the
                  Seller will, if requested by the Buyer,  reasonably assist the
                  Buyer in  processing  any  warranty  claim  the Buyer may have
                  against the manufacturer of such Supplier Part.

12.4.4            Joint Responsibility

                  If  the  Seller  determines  that  the  Interface  Problem  is
                  attributable  partially to the design of a Warranted  Part and
                  partially to the design of any Supplier Part, the Seller will,
                  if  requested by the Buyer,  seek a solution to the  Interface
                  Problem  through  cooperative  efforts  of the  Seller and any
                  Supplier  involved.  The Seller will promptly advise the Buyer
                  of any corrective  action  proposed by the Seller and any such
                  Supplier.  Such  proposal  will be  consistent  with  any then
                  existing  obligations of the Seller  hereunder and of any such
                  Supplier  to  the  Buyer.  Such  corrective   action,   unless
                  reasonably   rejected  by  the  Buyer,  will  constitute  full
                  satisfaction  of any claim the Buyer may have  against  either
                  the Seller or any such Supplier with respect to such Interface
                  Problem.

12.4.5            General

12.4.5.1          All  requests  under this Clause 12.4 will be directed both to
                  the Seller and the affected Suppliers.

12.4.5.2          Except as  specifically  set forth in this Clause  12.4,  this
                  Clause  12.4 will not be deemed  to impose on the  Seller  any
                  obligations   not  expressly  set  forth   elsewhere  in  this
                  Agreement.

12.4.5.3          All  reports,   recommendations,   data  and  other  documents
                  furnished  by the Seller to the Buyer  pursuant to this Clause
                  12.4 will be deemed to be delivered  under this  Agreement and
                  will be subject to the terms,  covenants  and  conditions  set
                  forth in this Clause 12 and in Clause 22.5.

12.5              EXCLUSIVITY OF WARRANTIES

                  THIS CLAUSE 12 (INCLUDING  ITS  SUBPROVISIONS)  SETS FORTH THE
                  EXCLUSIVE  WARRANTIES,  EXCLUSIVE  LIABILITIES  AND  EXCLUSIVE
                  OBLIGATIONS  OF  THE  SELLER,   AND  THE  EXCLUSIVE   REMEDIES
                  AVAILABLE  TO THE  BUYER,  WHETHER  UNDER  THIS  AGREEMENT  OR
                  OTHERWISE,  ARISING  FROM ANY DEFECT OR  NONCONFORMITY  OF ANY
                  KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART OR
                  SERVICE DELIVERED UNDER THIS AGREEMENT.

                  THE BUYER  HEREBY  WAIVES,  RELEASES AND  RENOUNCES  ALL OTHER
                  WARRANTIES,  OBLIGATIONS,  GUARANTEES  AND  LIABILITIES OF THE
                  SELLER AND ALL OTHER RIGHTS,  CLAIMS AND REMEDIES OF THE BUYER
                  AGAINST THE SELLER,  WHETHER  EXPRESS OR IMPLIED BY  CONTRACT,
                  TORT,  OR  STATUTORY  LAW OR  OTHERWISE,  WITH  RESPECT TO ANY
                  NONCONFORMITY   OR  DEFECT  OF  ANY  KIND  IN  ANY   AIRCRAFT,
                  COMPONENT,  EQUIPMENT,  ACCESSORY,  PART OR SERVICE  DELIVERED
                  UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

(1)      ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY  GENERAL
         OR PARTICULAR PURPOSE;

(2)      ANY  IMPLIED  OR  EXPRESS  WARRANTY ARISING FROM COURSE OF PERFORMANCE,
         COURSE OF DEALING OR USAGE OF TRADE;

(3)      ANY  RIGHT,  CLAIM  OR  REMEDY  FOR BREACH OF CONTRACT RELATING TO OR A
         RISING OUT OF THIS CLAUSE 12;

(4)      ANY   RIGHT,  CLAIM  OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY,
         HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS  AND/OR  CLAIMS
         FOR NEGLIGENCE,  GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD,
         IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT  LIABILITY  OR  FAILURE  TO
         WARN;

(5)      ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR
         ANY OTHER STATE OR FEDERAL STATUTE;

(6)      ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS  OR  STANDARDS
         IMPOSED  BY  ANY  INTERNATIONAL,  NATIONAL,  STATE  OR LOCAL STATUTE OR
         AGENCY;

(7)      ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

(a)      LOSS  OF  USE  OR  REPLACEMENT  OF  ANY AIRCRAFT, COMPONENT, EQUIPMENT,
         ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

(b)      LOSS OF, OR DAMAGE OF ANY KIND TO,  ANY AIRCRAFT, COMPONENT, EQUIPMENT,
         ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

(c)      LOSS OF PROFITS AND/OR REVENUES;

(d)      ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

                  THE  WARRANTIES  AND  SERVICE  LIFE  POLICY  PROVIDED  BY THIS
                  AGREEMENT WILL NOT BE EXTENDED,  ALTERED OR VARIED EXCEPT BY A
                  WRITTEN  INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE
                  EVENT  THAT ANY  PROVISION  OF THIS  CLAUSE 12 SHOULD  FOR ANY
                  REASON  BE HELD  UNLAWFUL,  OR  OTHERWISE  UNENFORCEABLE,  THE
                  REMAINDER  OF THIS  CLAUSE 12 WILL  REMAIN  IN FULL  FORCE AND
                  EFFECT.

12.6              DUPLICATE REMEDIES

                  The remedies  provided to the Buyer under this Clause 12 as to
                  any defect in respect of the  Aircraft or any part thereof are
                  mutually  exclusive  and not  cumulative.  The  Buyer  will be
                  entitled to the remedy that  provides  the maximum  benefit to
                  it,  as  the  Buyer  may  elect,  pursuant  to the  terms  and
                  conditions  of this Clause 12 for any such  particular  defect
                  for  which   remedies  are  provided  under  this  Clause  12;
                  provided,  however,  that the Buyer  will not be  entitled  to
                  elect  a  remedy  under  one  part  of  this  Clause  12  that
                  constitutes  a duplication  of any remedy  elected by it under
                  any other part hereof for the same defect.  The Buyer's rights
                  and remedies herein for the  nonperformance of any obligations
                  or liabilities  of the Seller  arising under these  warranties
                  will be in  monetary  damages  limited to the amount the Buyer
                  expends in  procuring  a  correction  or  replacement  for any
                  covered part subject to a defect or nonperformance  covered by
                  this  Clause  12,  and the  Buyer  will not have any  right to
                  require specific performance by the Seller.

                  Nothing  contained  in  the  foregoing  Clause  12.5  will  be
                  interpreted  to deprive  the Buyer of its right to enforce the
                  rights and remedies set forth in this Clause 12.

UNQUOTE

                  In  consideration  of the  assignment  and  subrogation by the
                  Seller  under this  Clause 12 in favor of the Buyer in respect
                  of  the  Seller's   rights  against  and  obligations  to  the
                  Manufacturer  under the  provisions  quoted  above,  the Buyer
                  hereby accepts such  assignment and  subrogation and agrees to
                  be  bound  by all of the  terms,  conditions  and  limitations
                  therein contained, specifically including, without limitation,
                  the  Exclusivity  of  Warranties  and General  Limitations  of
                  Liability provisions and Duplicate Remedies provisions.

                  THIS CLAUSE 12 (INCLUDING  ITS  SUBPROVISIONS)  SETS FORTH THE
                  EXCLUSIVE  WARRANTIES,  EXCLUSIVE  LIABILITIES  AND  EXCLUSIVE
                  OBLIGATIONS  OF  THE  SELLER,   AND  THE  EXCLUSIVE   REMEDIES
                  AVAILABLE  TO THE  BUYER,  WHETHER  UNDER  THIS  AGREEMENT  OR
                  OTHERWISE,  ARISING  FROM ANY DEFECT OR  NONCONFORMITY  OF ANY
                  KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART OR
                  SERVICE DELIVERED UNDER THIS AGREEMENT.

                  THE BUYER  HEREBY  WAIVES,  RELEASES AND  RENOUNCES  ALL OTHER
                  WARRANTIES,  OBLIGATIONS,  GUARANTEES  AND  LIABILITIES OF THE
                  SELLER AND ALL OTHER RIGHTS,  CLAIMS AND REMEDIES OF THE BUYER
                  AGAINST THE SELLER,  WHETHER  EXPRESS OR IMPLIED BY  CONTRACT,
                  TORT,  OR  STATUTORY  LAW OR  OTHERWISE,  WITH  RESPECT TO ANY
                  NONCONFORMITY   OR  DEFECT  OF  ANY  KIND  IN  ANY   AIRCRAFT,
                  COMPONENT,  EQUIPMENT,  ACCESSORY,  PART OR SERVICE  DELIVERED
                  UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

(1)      ANY  IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL
         OR PARTICULAR PURPOSE;

(2)      ANY  IMPLIED  OR  EXPRESS  WARRANTY ARISING FROM COURSE OF PERFORMANCE,
         COURSE OF DEALING OR USAGE OF TRADE;

(3)      ANY  RIGHT, CLAIM OR REMEDY  FOR  BREACH  OF  CONTRACT  RELATING  TO OR
         ARISING OUT OF THIS CLAUSE 12;

(4)      ANY RIGHT,  CLAIM  OR REMEDY  FOR TORT,  UNDER ANY THEORY OF LIABILITY,
         HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS  AND/OR  CLAIMS
         FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL  DISREGARD,
         IMPLIED  WARRANTY, PRODUCT  LIABILITY, STRICT LIABILITY OR  FAILURE  TO
         WARN;

(5)      ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR
         ANY OTHER STATE OR FEDERAL STATUTE;

(6)      ANY  RIGHT,  CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS
         IMPOSED BY ANY INTERNATIONAL,  NATIONAL,  STATE  OR  LOCAL  STATUTE  OR
         AGENCY;

(7)      ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

        (a)      LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT,COMPONENT,EQUIPMENT,
                 ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

        (b)      LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT,
                 EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

        (c)      LOSS OF PROFITS AND/OR REVENUES;

        (d)      ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

                  THE  WARRANTIES  AND  SERVICE  LIFE  POLICY  PROVIDED  BY THIS
                  AGREEMENT WILL NOT BE EXTENDED,  ALTERED OR VARIED EXCEPT BY A
                  WRITTEN  INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE
                  EVENT  THAT ANY  PROVISION  OF THIS  CLAUSE 12 SHOULD  FOR ANY
                  REASON  BE HELD  UNLAWFUL,  OR  OTHERWISE  UNENFORCEABLE,  THE
                  REMAINDER  OF THIS  CLAUSE 12 WILL  REMAIN  IN FULL  FORCE AND
                  EFFECT.

                  The remedies  provided to the Buyer under this Clause 12 as to
                  any defect in respect of the  Aircraft or any part thereof are
                  mutually  exclusive  and not  cumulative.  The  Buyer  will be
                  entitled to the remedy that  provides  the maximum  benefit to
                  it,  as  the  Buyer  may  elect,  pursuant  to the  terms  and
                  conditions  of this Clause 12 for any such  particular  defect
                  for  which   remedies  are  provided  under  this  Clause  12;
                  provided,  however,  that the Buyer  will not be  entitled  to
                  elect  a  remedy  under  one  part  of  this  Clause  12  that
                  constitutes  a duplication  of any remedy  elected by it under
                  any other part hereof for the same defect.  The Buyer's rights
                  and remedies herein for the  nonperformance of any obligations
                  or liabilities  of the Seller  arising under these  warranties
                  will be in  monetary  damages  limited to the amount the Buyer
                  expends in  procuring  a  correction  or  replacement  for any
                  covered part subject to a defect or nonperformance  covered by
                  this  Clause  12,  and the  Buyer  will not have any  right to
                  require specific performance by the Seller.

                  Nothing  contained  in  the  foregoing  Clause  12.6  will  be
                  interpreted  to deprive  the Buyer of its right to enforce the
                  rights and remedies set forth in this Clause 12.

12.7              NEGOTIATED AGREEMENT

                  The Buyer specifically acknowledges that

                  (i)      this Agreement, and in particular this Clause 12, has
                           been the subject of discussion and negotiation and is
                           fully understood  by the Buyer;

                  (ii)     the  price  of the  Aircraft  and  the  other  mutual
                           agreements  of the Buyer set forth in this  Agreement
                           were arrived at in consideration  of, inter alia, the
                           provisions of this Clause 12, specifically  including
                           the  Exclusivity  of  Warranties  set forth in Clause
                           12.5.


<PAGE>



13 -              PATENT AND COPYRIGHT INDEMNITY
                  ------------------------------

                  The Seller  represents and warrants that the  Manufacturer has
                  provided to the Seller the following  indemnity against patent
                  and  copyright  infringements  with  respect to the  Aircraft,
                  subject to the terms, conditions, limitations and restrictions
                  (including,  but not limited to, the Exclusivity of Warranties
                  and Duplicate Remedies provisions) as hereinafter set out, and
                  that the same are in full  force and  effect and have not been
                  amended. The Seller hereby assigns to the Buyer, and the Buyer
                  hereby accepts,  all of the Seller's rights and obligations as
                  the  "Buyer"  under  the said  indemnity  against  patent  and
                  copyright  infringements,  and the Seller subrogates the Buyer
                  to all such rights and obligations in respect of the Aircraft.
                  The Seller  hereby  warrants  to the Buyer that (i) it has all
                  requisite  authority to make the foregoing  assignment  and to
                  effect the foregoing  subrogation in favor of the Buyer,  (ii)
                  such assignment and subrogation are effective to confer on the
                  Buyer  all of the  foregoing  rights  and  obligations  of the
                  Seller, and (iii) the Seller will not enter into any amendment
                  of the  provisions  so  assigned  without  the  prior  written
                  consent of the Buyer.

                  It is  understood  that, in the  provisions  below between the
                  words QUOTE and UNQUOTE,  capitalized  terms have the meanings
                  assigned  thereto in this Agreement,  except that (i) the term
                  "Seller,"   which  means  the   Manufacturer  as  between  the
                  Manufacturer  and the Seller,  also means the  Manufacturer in
                  this  Agreement,  and (ii) the term  "Buyer,"  which means the
                  Seller as between the Manufacturer  and the Seller,  means the
                  Buyer in this Agreement.

QUOTE

13.1              Indemnity

13.1.1            Subject to the  provisions of Clause  13.2.3,  the Seller will
                  indemnify  the Buyer and its officers,  directors,  agents and
                  employees  from and against any  damages,  costs and  expenses
                  including legal costs  (excluding  damages,  costs,  expenses,
                  loss  of  profits  and  other  liabilities  in  respect  of or
                  resulting  from loss of use of the Aircraft)  resulting from a
                  claim  that the  Airframe  or any part or  software  installed
                  therein at Delivery infringes

                  (i)      any British, French, German, Spanish or U.S.  patent;
                           and

                  (ii)     any patent issued under the laws of any other country
                           in which the Buyer may lawfully operate the Aircraft,
                           provided  that  from  the  time  of  design  of  such
                           Airframe or any part or software installed therein at
                           Delivery and until infringement  claims are resolved,
                           the country of the patent and the flag country of the
                           Aircraft are both parties to

                        (1)      the  Chicago  Convention on International Civil
                                 Aviation of December 7, 1944 and are each fully
                                 entitled to all benefits of Article 27 thereof,
                                 or,

                        (2)      the International Convention for the Protection
                                 of Industrial  Property of March 20, 1883  (the
                                 "Paris Convention"); and

                  (iii)    in  respect of  computer  software  installed  on the
                           Aircraft,  any copyright,  provided that the Seller's
                           obligation   to   indemnify   will  be   limited   to
                           infringements  in  countries  which,  at the  time of
                           infringement,  are  members  of The  Berne  Union and
                           recognize  computer  software  as a "work"  under the
                           Berne Convention.

13.1.2            Clause 13.1.1 will not apply to

                  (i)      Buyer Furnished Equipment;

                  (ii)     the Propulsion Systems;

                  (iii)    parts supplied pursuant to a Supplier Product Support
                           Agreement; or

                  (iv)     software not created by the Seller.


13.1.3            In the event that the Buyer, due to circumstances contemplated
                  in Clause 13.1.1 is prevented from using the Aircraft (whether
                  by a valid judgment of a court of competent jurisdiction or by
                  a settlement arrived at among the claimant, the Seller and the
                  Buyer), the Seller will at its expense either

                  (i)      procure for the Buyer the right to use  the  affected
                           Airframe, part or software free of charge; or

                  (ii)     replace the infringing  part or  software  as soon as
                           possible with a noninfringing substitute.

13.2              Administration of Patent and Copyright Indemnity Claims


13.2.1            If the Buyer  receives a written claim or a suit is threatened
                  or begun  against  the Buyer for  infringement  of a patent or
                  copyright referred to in Clause 13.1, the Buyer will

                  (i)      forthwith  notify  the  Seller,  giving   particulars
                           thereof;

                  (ii)     furnish to the Seller all data,  papers  and  records
                           within the Buyer's control or possession  relating to
                           such patent or claim;

                  (iii)    refrain from admitting  any  liability  or making any
                           payment, or assuming any expenses, damages,  costs or
                           royalties,or otherwise acting in a manner prejudicial
                           to the defense or denial of the  suit  or  claim,  it
                           being agreed that nothing in this Clause  13.2.1(iii)
                           will prevent  the Buyer from paying the sums that may
                           be required to obtain the release of  the   Aircraft,
                           provided  that  paymentis  accompanied by a denial of
                           liability and is made without prejudice;

                  (iv)     fully cooperate with, and render * assistance to, the
                           Seller  as  may be pertinent to the defense or denial
                           of the suit or claim;

                  (v)      *  mitigate damages and/or  to reduce  the  amount of
                           royalties  that may be payable, and to minimize costs
                           and expenses.

13.2.2            The  Seller  will be  entitled  either  in its own  name or on
                  behalf of the Buyer to conduct  negotiations with the party or
                  parties  alleging  infringement and may assume and conduct the
                  defense or settlement of any suit or claim in the manner that,
                  in the Seller's opinion, it deems proper.

13.2.3            The Seller's  liability  hereunder  will be conditional on the
                  strict  and timely  compliance  by the Buyer with the terms of
                  this  Clause  and is in lieu  of any  other  liability  to the
                  Buyer,  whether  express or  implied,  which the Seller  might
                  incur  at law as a  result  of any  infringement  or  claim of
                  infringement of any patent or copyright.

UNQUOTE

                  In  consideration  of the  assignment  and  subrogation by the
                  Seller  under this  Clause 13 in favor of the Buyer in respect
                  of  the  Seller's   rights  against  and  obligations  to  the
                  Manufacturer  under the  provisions  quoted  above,  the Buyer
                  hereby accepts such  assignment and  subrogation and agrees to
                  be  bound  by all of the  terms,  conditions  and  limitations
                  therein contained (specifically including, without limitation,
                  the waiver, release and renunciation provision).

                  THE INDEMNITY  PROVIDED IN THIS CLAUSE 13 AND THE  OBLIGATIONS
                  AND  LIABILITIES  OF  THE  SELLER  UNDER  THIS  CLAUSE  13 ARE
                  EXCLUSIVE  AND IN  SUBSTITUTION  FOR,  AND  THE  BUYER  HEREBY
                  WAIVES,   RELEASES  AND  RENOUNCES   ALL  OTHER   INDEMNITIES,
                  WARRANTIES,  OBLIGATIONS,  GUARANTEES  AND  LIABILITIES ON THE
                  PART OF THE SELLER AND  RIGHTS,  CLAIMS  AND  REMEDIES  OF THE
                  BUYER AGAINST THE SELLER,  EXPRESS OR IMPLIED,  ARISING BY LAW
                  OR OTHERWISE  (INCLUDING  WITHOUT  LIMITATION ANY  OBLIGATION,
                  LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT
                  TO LOSS OF USE OR  REVENUE  OR  CONSEQUENTIAL  DAMAGES),  WITH
                  RESPECT TO ANY ACTUAL OR ALLEGED  PATENT  INFRINGEMENT  OR THE
                  LIKE BY ANY AIRFRAME,  PART OR SOFTWARE  INSTALLED  THEREIN AT
                  DELIVERY,  OR THE USE OR SALE THEREOF,  PROVIDED  THAT, IN THE
                  EVENT  THAT ANY OF THE  AFORESAID  PROVISIONS  SHOULD  FOR ANY
                  REASON  BE  HELD  UNLAWFUL  OR  OTHERWISE   INEFFECTIVE,   THE
                  REMAINDER OF THIS CLAUSE WILL REMAIN IN FULL FORCE AND EFFECT.
                  THIS INDEMNITY AGAINST PATENT AND COPYRIGHT INFRINGEMENTS WILL
                  NOT  BE  EXTENDED,  ALTERED  OR  VARIED  EXCEPT  BY A  WRITTEN
                  INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.


<PAGE>



14 -              TECHNICAL DATA AND DOCUMENTATION



14.1              General

                  This Clause covers the terms and  conditions for the supply of
                  Technical  Data  and  Documentation.  The  Technical  Data and
                  Documentation  will be supplied in the English  language using
                  aeronautical terminology in common use.

14.2              Scope

                  Range, form, type, format,  ATA/non-ATA  compliance,  revision
                  and  quantity  of the  Technical  Data and  Documentation  are
                  covered in Exhibit F hereto.

14.3              Delivery

                  The  Technical  Data  and   Documentation   and  corresponding
                  revisions  to be  supplied  by the Seller  will be sent to one
                  address only as advised by the Buyer.

                  Technical Data and  Documentation  and their revisions will be
                  delivered  Free Carrier  (FCA)  Toulouse,  France  and/or Free
                  Carrier (FCA) Hamburg, Germany, as determined by the Seller.

                  The delivery  schedule of the Technical Data and Documentation
                  will be phased as mutually  agreed to correspond with Aircraft
                  deliveries.  The Buyer  agrees to  provide  forty  (40)  days'
                  notice when requesting a change to the delivery schedule.

                  Subject  to  the  Seller's   performance  of  its  obligations
                  pursuant  to Clause  7.3.5,  the  Buyer  will  coordinate  and
                  satisfy  local  Aviation  Authorities  needs for the Technical
                  Data and Documentation.

                  Technical  Data  and  Documentation  will  correspond  to  the
                  Specification  as defined  six (6) months  before  delivery of
                  each  Aircraft.   If  the  full   Specification  will  not  be
                  introduced into a scheduled revision of the Technical Data and
                  Documentation  before  delivery  of  any  Aircraft,  temporary
                  revisions for outstanding  Specification items will be issued.
                  Such   temporary   revisions   will  remain  in  effect  until
                  incorporation  of the full  Specification  into the  Technical
                  Data and Documentation for such Aircraft.  Full  incorporation
                  will be  effected  by no later  than  eight (8)  months  after
                  delivery  of such  Aircraft.  The Seller will supply a list of
                  the differences  between the  Specification  and the Technical
                  Data and Documentation at delivery of each Aircraft.

14.4              Revision Service

14.4.1            General

                  Unless otherwise specifically stated, revision service will be
                  offered  free  of  charge  *  .  Mandatory   changes  will  be
                  incorporated  into the Technical Data and  Documentation at no
                  charge for as long as * Aircraft is in service with the Buyer.

14.4.2            Service Bulletins (SB)


                  On the Buyer's request,  Service Bulletin  information will be
                  incorporated into the Technical Data and Documentation for the
                  Aircraft  after  formal  notification  by  the  Buyer  of  its
                  intention  to  accomplish a Service  Bulletin.  The Buyer will
                  make this request  within * after the Seller  issues a Service
                  Bulletin.  For Technical  Data and  Documentation  relating to
                  maintenance,  the  split  effectivity  for  the  corresponding
                  Service  Bulletin  will  remain  in such  Technical  Data  and
                  Documentation  until the Buyer notifies the Seller that it has
                  accomplished the Service Bulletin on all applicable  Aircraft.
                  For  Technical  Data  and  Documentation  relating  to  flight
                  operations, only the pre- or post-Service Bulletin status will
                  be shown in the Technical Data and Documentation.  This clause
                  will  remain  in  effect  so long as the  Buyer  has  revision
                  service.

This Clause applies only to the following Technical Data and Documentation: *

14.4.3            Customer Originated Changes

14.4.3.1          Customer  Originated  Changes  (COC) data may be  incorporated
                  into   the   following    customized    Technical   Data   and
                  Documentation:

                  - Aircraft Maintenance Manual
                  - Illustrated Parts Catalog
                  - Trouble Shooting Manual
                  - Wiring Manual (Schematics, Wirings, Lists)

                  COC data will be  established  by the Buyer  according  to the
                  "Guidelines  for Customer  Originated  Changes"  issued by the
                  Seller.

                  The COC data will be labeled "COC" to show that they are Buyer
                  originated.  The Seller will endeavor to incorporate  COC data
                  into the customized  Technical Data and  Documentation  within
                  two (2)  revisions  following  the  receipt  of  complete  and
                  accurate data for processing.

                  COC data will be  incorporated  by the Seller in all  affected
                  customized Technical Data and Documentation,  unless the Buyer
                  specifies   in   writing   into  which   Technical   Data  and
                  Documentation   the  COC  data  will  be   incorporated.   The
                  customized Technical Data and Documentation into which the COC
                  data  are   incorporated   will   only   show   the   Aircraft
                  configuration   that   reflects  the  COC  data  and  not  the
                  configuration before incorporation of the COC data.

14.4.3.2          The  Buyer will  ensure  that  any such COC data have received
                  prior agreement from its local Aviation Authorities.

14.4.3.3          The  Buyer   hereby   acknowledges   and   accepts   that  the
                  incorporation   of  any  COC  into  the  Technical   Data  and
                  Documentation  issued by the Seller  will be  entirely  at the
                  Buyer's  risk.  Accordingly,  the  Seller  will  be  under  no
                  liability  whatsoever in respect of either the contents of any
                  COC, including any omissions or inaccuracies  therein,  or the
                  effect  that  the  incorporation  of such  COC may have on the
                  Technical Data and Documentation.

                  The  Seller  will  not be  required  to  check  any  COC  data
                  submitted for incorporation as aforesaid.

                  Further,   the  Buyer  acknowledges  full  liability  for  the
                  effects, including all related costs, that any COC may have on
                  all subsequent Service Bulletins and modifications.

14.4.3.4          In the event that the Seller is required under any judgment or
                  settlement to indemnify any third party for  injury,  loss  or
                  damage   incurred   directly  or  indirectly  as  a  result of
                  incorporation  of   any   COC  into  the  Technical  Data  and
                  Documentation  issued  by  the  Seller,  the  Buyer  agrees to
                  reimburse the Seller for all payments or settlements  made  in
                  respect of such  injury, loss or damage including any expenses
                  (including reasonable legal fees) incurred by  the  Seller  in
                  defending such claims, *.

                  The  Seller's  liability  will in no event be  affected by any
                  communication,  whether  written or oral,  that the Seller may
                  make to the Buyer with respect to such documentation.

14.4.3.5          The Seller's  costs with respect to the  incorporation  of any
                  COC will be invoiced to the Buyer under  conditions  specified
                  in ASCO's Customer  Services  Catalog in effect at the time of
                  the Buyer's request for incorporation.

14.5              Supplier Equipment

                  Information  relating to Supplier  equipment that is installed
                  on the Aircraft by the Seller will be included  free of charge
                  in the basic issue of the Technical Data and  Documentation to
                  the extent  necessary  for the  understanding  of the  systems
                  concerned.

                  The Buyer will  supply or cause to be  supplied  to the Seller
                  the data related to Buyer Furnished Equipment and to any other
                  equipment  not  covered  in the  Seller's  Standard  Furnished
                  Equipment  definition  at least * months  before the scheduled
                  delivery of the customized  Technical Data and  Documentation.
                  The Buyer will supply these data in English.

                  The  Seller  will  introduce  into  the  basic  issue  of  the
                  Technical  Data and  Documentation  the data  related to Buyer
                  Furnished Equipment. Costs for shipping these data will be the
                  Buyer's responsibility.

14.6              Aircraft Identification Technical Data and Documentation


                  For the customized  Technical Data and Documentation the Buyer
                  agrees to the allocation of Fleet Serial Numbers (FSNs) in the
                  form of a block of numbers  selected  in the range from 001 to
                  999.

                  The sequence  will be  interrupted  only if two (2)  different
                  Propulsion Systems or different Aircraft models are selected.

                  The Buyer will  indicate to the Seller the FSNs  allocated  to
                  the Aircraft  within * days after execution of this Agreement.
                  The allocation of FSNs to Manufacturer's Serial Numbers (MSNs)
                  will  not  constitute  any  proprietary,  insurable  or  other
                  interest of the Buyer in any Aircraft  before  delivery of and
                  payment for Aircraft as provided in this Agreement.

                  The affected customized Technical Data and Documentation are:

                  - Aircraft Maintenance Manual
                  - Illustrated Parts Catalog
                  - Trouble Shooting Manual
                  - Wiring Manual (Schematics, Wirings, Lists)

14.7              Performance Engineer's Programs

                  Complementary to the standard Operational Manuals,  covered in
                  Exhibit  F  hereto,  the  Seller  will  provide  to the  Buyer
                  Performance   Engineer's   Programs   (PEPs)   under   license
                  conditions defined in Exhibit F hereto.

14.8              CD-ROM


                  Certain  Technical  Data and  Documentation  are  provided  on
                  CD-ROM under license conditions defined in Exhibit F hereto.

                  The  affected   Technical  Data  and   Documentation  are  the
                  following:

                  - Trouble Shooting Manual
                  - Aircraft Maintenance Manual
                  - Illustrated Parts Catalog

                  From time to time,  the Seller may extend this list to include
                  other  Technical Data and  Documentation  and related  license
                  conditions specified by the Seller.

14.9              Warranty Disclaimer

                  The   Seller   represents   that   the   Technical   Data  and
                  Documentation are prepared in accordance with the state of the
                  art  at  the  date  of  their  conception.  Should  any of the
                  Technical  Data  and  Documentation  prepared  by  the  Seller
                  contain error or omission, the sole and exclusive liability of
                  the Seller will be to take all reasonable and proper steps to,
                  at its option,  correct or replace any such Technical Data and
                  Documentation. Notwithstanding the above, no warranties of any
                  kind are given for the Customer  Originated  Changes addressed
                  in Clause  14.4.3.  The  provisions of Clauses 12.5,  12.6 and
                  12.7 will apply to all Technical Data and Documentation.

14.10             Proprietary Rights

14.10.1           All proprietary  rights,  including but not limited to patent,
                  design  and   copyrights,   relating  to  Technical  Data  and
                  Documentation  will remain with the Seller. All Technical Data
                  and  Documentation  are  supplied to the Buyer for the Buyer's
                  sole use.

                  These  proprietary  rights will also apply to any  translation
                  into a  language  or  languages  or media  that may have  been
                  performed or caused to be performed by the Buyer.

14.10.2           Whenever  this  Agreement  provides for  manufacturing  by the
                  Buyer,  the consent  given by the Seller will not be construed
                  as express or implicit approval of the manufactured  products.
                  The supply of the Technical Data and Documentation will not be
                  construed  as any  further  right  for the  Buyer to design or
                  manufacture any Aircraft or part thereof or spare part.


<PAGE>


15 -              FIELD ASSISTANCE


15.1              Seller's Service

                  The Seller  will  provide or cause to be provided at no charge
                  to the Buyer the services  described in this Clause 15, at the
                  Buyer's main base or at other locations to be mutually agreed.

15.1.1            The Seller will provide a Resident  Customer  Support  Manager
                  starting  at or  about  delivery  of the  first  Aircraft  and
                  continuing for as long *.

15.1.2            The  Seller  will  also  provide  the  services  of a team  of
                  Customer  Support   Representatives   acting  in  an  advisory
                  capacity  at  the  Buyer's  main  base  starting  at or  about
                  delivery of the first  Aircraft  for a total of *  man-months.
                  The actual number of Customer Support Representatives assigned
                  to the Buyer at any one time will be mutually agreed, but will
                  not be fewer than one (1) or more than three (3) persons.

15.1.3            The  Seller  has  set  up a  global technical services network
                  available for the nonexclusive use of  operators  of  aircraft
                  manufactured by the Manufacturer. The  Buyer  will  have  free
                  access to this global network at any time in the course of its
                  operation of the Aircraft.  In particular, the Buyer will have
                  access  to   the  regional  Customer  Support  Representatives
                  closest to the Buyer's main base after the end of  the  period
                  referred  to  above  in  Clause 15.1.1,  or  to  cover for the
                  temporary absence of the Customer Support Representative(s). A
                  list  of  the  contacts  for  the  global  technical  services
                  network,    including   the    regional    Customer    Support
                  Representatives, will be provided to the Buyer.

15.2              Customer Support Director

                  The Seller  will  provide  the  services  of one (1)  Customer
                  Support Director based in Herndon, Virginia, to liaise between
                  the  Manufacturer  and the Buyer on  product  support  matters
                  after  signature  of this  Agreement  for as long as the Buyer
                  operates at least one (1) Aircraft.

15.3              Buyer's Service

15.3.1            For  as  long  as  the  Customer   Support   Representative(s)
                  specified in Clause 15.1.1 above remain(s) with the Buyer, the
                  Buyer will  furnish  without  charge  secretarial  assistance,
                  suitable office space,  office  equipment and facilities in or
                  conveniently near the Buyer's maintenance facilities *.

15.3.2            In  accordance  with  the  Buyer's regulations, the Buyer will
                  provide at no charge to the Seller


                  (i)      airline  tickets * confirmed and  guaranteed  between
                           the locations  mentioned  above in Subclause 15.1 and
                           the international  airport nearest Toulouse,  France,
                           that  is on the  Buyer's  network  for  the  Customer
                           Support Representative(s) mentioned in Clauses 15.1.1
                           and 15.1.2; and

                  (ii)     when  said  Customer  Support  Representative(s)  are
                           assigned away from the locations  mentioned  above in
                           Clause 15.1 at the Buyer's request, transportation on
                           a space-available  coach class basis between the said
                           locations and the place of assignment.

15.3.3            The  parties  will give each  other all  necessary  reasonable
                  assistance with general  administrative  functions specific to
                  their  respective  countries and  procurement of the documents
                  necessary to live and work there.

15.4              Representatives' Status

                  In  providing  the  above  technical  service,   the  Seller's
                  employees,  including Customer Support  Representative(s)  and
                  the Customer Support  Director,  are deemed to be acting in an
                  advisory  capacity  only and at no time will they be deemed to
                  be acting,  either  directly  or  indirectly,  as the  Buyer's
                  employees or agents.

15.5              Temporary Assignment of Customer Support Representative
                  -------------------------------------------------------

                  The Buyer agrees that,  subject to Clause  15.1.2,  the Seller
                  will  have the right to  transfer  or  recall  any  individual
                  Customer Support Representative(s) on a temporary or permanent
                  basis.


<PAGE>


16 -              TRAINING AND TRAINING AIDS
                  --------------------------

16.1.             General

                  This Clause covers the terms and  conditions for the supply of
                  training  and  training  aids  for the  Buyer's  personnel  to
                  support the Aircraft operation.

16.2.             Scope

16.2.1            The range and  quantities  of training and training aids to be
                  provided  free of charge under this  Agreement  are covered in
                  Appendix  A  to  this  Clause  16.  The  Seller  will  arrange
                  availability of such training and training aids in relation to
                  the delivery of the Aircraft.

16.2.2            The  contractual  training  courses,  defined in Appendix A to
                  this  Clause  16,  will be  provided  up to one (1) year after
                  delivery of the last Aircraft.

16.2.3            In the event  that the Buyer  should  use none or only part of
                  the training or training aids to be provided  pursuant to this
                  Clause,  no  compensation  or  credit  of  any  sort  will  be
                  provided.

16.3.             Training Organization / Location

16.3.1            The  Seller  will  provide the training at the Airbus Training
                  Center in Miami, or * at of one  of  its  affiliated  training
                  centers.

16.3.2            In  the  event  of  the   nonavailability   of  facilities  or
                  scheduling   imperatives   making   training   by  the  Seller
                  impractical,   the  Seller  will  make  arrangements  for  the
                  provision to the Buyer of such training support elsewhere, *.

16.3.3            Upon the Buyer's  request the Seller may also provide  certain
                  training at one of the Buyer's bases, if and when  practicable
                  for the  Seller,  under  terms and  conditions  to be mutually
                  agreed upon. In this event,  all additional  charges listed in
                  Clause 16.6.2 will be borne by the Buyer.

16.4              Training Courses

16.4.1            Training  courses,  as well as the minimum and maximum numbers
                  of trainees per course provided for the Buyer's personnel, are
                  defined in the Seller's applicable Training Course Catalog and
                  will be  scheduled  as mutually  agreed upon during a training
                  conference  (the  "Training  Conference")  to be held at least
                  twelve (12) months prior to delivery of the first Aircraft.

16.4.2            The  following  terms will apply when training is performed by
                  the Seller :

                  (i)        Training  courses  will  be the  Seller's  standard
                             courses  as  described  in  the  Seller's   current
                             Training  Course   Catalog.   The  Seller  will  be
                             responsible   for  all  training   course  syllabi,
                             training aids and training equipment  necessary for
                             the organization of the training courses

                  (ii)       The training curricula and the  training  equipment
                             may not  be  fully  customized.  However,  academic
                             curricula  may  be  modified  to  include  the most
                             significant aspects of the  Specification  (to  the
                             exclusion of Buyer Furnished Equipment) as known at
                             the latest  six (6) months prior to the date of the
                             first training course planned for the Buyer.    The
                             equipment   used   for   training   of  flight  and
                             maintenance personnel will not be fully customized;
                             however, this equipment will be configured in order
                             to   obtain   the   relevant  Aviation  Authority's
                             approval  and  to  support  the  Seller's  teaching
                             programs.

                  (iii)      Training  data  and  documentation   necessary  for
                             training  detailed  in Appendix A to this Clause 16
                             will be  free-of-charge  and will  not be  revised.
                             Training data and documentation will be marked "FOR
                             TRAINING ONLY" and as such will be supplied for the
                             sole and express purpose of training.

                  (iv)       Upon the  request  of the Buyer,  the  Seller  will
                             collect and pack for  consolidated  shipment to the
                             Buyer's    facility,    all   training   data   and
                             documentation  of the  Buyer's  trainees  attending
                             training  at the Airbus  Training  Center in Miami,
                             Florida.  This training data and documentation will
                             be  delivered  Free  Carrier  (FCA)  Miami.  It  is
                             understood  that  title  to and risk of loss of the
                             training  data and  documentation  will pass to the
                             Buyer upon delivery.

16.4.3            In the event  the Buyer  decides  to  cancel or  reschedule  a
                  training  course,  a  minimum  advance  notice  of sixty  (60)
                  calendar  days will be  required.  Any later  cancellation  or
                  change,  when courses cannot be allocated to other  customers,
                  will be deducted from the training  allowances  defined herein
                  or will be charged to the Buyer, as applicable.

16.4.4            In fulfillment of its obligation to provide training  courses,
                  when the Seller performs the training courses, the Seller will
                  deliver to the trainees a certificate of completion at the end
                  of any such training course. The Seller's certificate does not
                  represent  authority or qualification by any official Aviation
                  Authorities but may be presented to such officials in order to
                  obtain relevant formal qualification.

                  In the event that training is provided by a training  provider
                  selected  by the Seller,  the Seller will cause such  training
                  provider to deliver a certificate  of completion at the end of
                  any such training course.  Such certificate will not represent
                  authority   or   qualification   by  any   official   Aviation
                  Authorities but may be presented to such officials in order to
                  obtain relevant formal qualification.

16.5              Prerequisites

16.5.1            Training  will be conducted  in English and all training  aids
                  and materials are written in English using common aeronautical
                  terminology. Trainees must have the prerequisite jet transport
                  category  experience  as defined in  Appendix B to this Clause
                  16.

                  It is clearly  understood that the Seller's  training  courses
                  are "Transition  Training Courses" and not "Ab Initio Training
                  Courses."

                  Furthermore,  the Buyer will be responsible  for the selection
                  of the  trainees  and for any  liability  with  respect to the
                  entry knowledge level of the trainees.

16.5.2            The Buyer will provide the Seller with an  attendance  list of
                  the trainees for each course with the validated  qualification
                  of each  trainee.  The Seller  reserves the right to check the
                  trainees'  proficiency and previous  professional  experience.
                  The Seller will in no case warrant or otherwise be held liable
                  for any  trainee's  performance  as a result  of any  training
                  services provided.

16.5.3            Upon the  Buyer's  request,  the  Seller may be  consulted  to
                  direct the above mentioned trainee(s) through a relevant entry
                  level training  program,  which will be at the Buyer's charge,
                  and,  if  necessary,  to  coordinate  with  competent  outside
                  organizations for this purpose. Such consultation will be held
                  during the Training Conference.

                  In the event the Seller should  determine that a trainee lacks
                  the  required  entry  level,  such  trainee  will,   following
                  consultation with the Buyer, be withdrawn from the program and
                  will then be considered to be at the Buyer's disposal.

16.6.             Logistics

16.6.1            Trainees

16.6.1.1          When training is done at the Airbus  Training Center in Miami,
                  Florida,  the Seller will provide a free-of-charge  rental car
                  for  all of the  Buyer's  trainees  at  the  beginning  of the
                  training  course  on the  basis  of one  rental  car per  four
                  maintenance,  operations and cabin attendant  trainees and one
                  rental car per flight crew.

                  The  Seller  will  provide   rental  cars  from  a  nationally
                  recognized  vendor of its choosing with unlimited  mileage and
                  buy-back of collision  damage waiver (CDW), and the Buyer will
                  pay for gas,  and  fines,  if any.  However,  the  Buyer  will
                  indemnify  and hold the Seller  harmless  from and against all
                  liabilities,  claims,  damages,  costs  and  expenses  for any
                  injury to or death of any of the Buyer's  trainees  occasioned
                  during the course of such transportation.

16.6.1.2          When  training  is  done  at the  Airbus  Training  Center  in
                  Blagnac,  France,  or Beijing,  China, the Seller will provide
                  free local  transportation  by bus for the Buyer's trainees to
                  and from designated pick up points and the training center.

16.6.1.3          Living  expenses  for  the Buyer's trainees are to be borne by
                  the Buyer.

16.6.2            Training at External Location

16.6.2.1          Seller's Instructors

                  In  the  event  that,  at the  Buyer's  request,  training  is
                  provided by the Seller's  instructors  at any  location  other
                  than the Seller's training  centers,  the Buyer will reimburse
                  the  Seller  for all the  expenses,  defined  below in Clauses
                  16.6.2.2,  16.6.2.3,  16.6.2.4  and  16.6.2.5  related  to the
                  assignment of such  instructors  and their  performance of the
                  duties as aforesaid.

16.6.2.2          Living Expenses for the Seller's Instructors

                  Such  expenses,   covering  the  entire  period  from  day  of
                  secondment to day of return to the Seller's base, will include
                  but  will  not  be   limited  to   lodging,   food  and  local
                  transportation  to and  from  the  place  of  lodging  and the
                  training course location.  The Buyer will reimburse the Seller
                  for  such   expenses   on  the   basis  of  a  per  diem  rate
                  corresponding  to the current per diem rate used by the Seller
                  for its personnel.

16.6.2.3          Air Travel

                  The  Buyer  will  reimburse  the  Seller  for the costs of the
                  Seller's  * the  Buyer's  designated  training  site  and  the
                  Seller's training center.

16.6.2.4          Instructor's Material

                  The Buyer will  reimburse  the Seller for the cost of shipping
                  the instructor's material needed to conduct such courses.

16.6.2.5          Buyer's Indemnity

                  The Buyer will be solely  liable for any and all  cancellation
                  or delay in the  performance  of the  training  outside of the
                  Seller's training centers  associated with the  transportation
                  services  described  above  and  will  indemnify  and hold the
                  Seller harmless from such delay and any  consequences  arising
                  therefrom.

16.6.2.6          Training Equipment Availability

                  Training  equipment  necessary for course  performance  at any
                  course  location other than the Seller's  training  centers or
                  the facilities of the training provider selected by the Seller
                  will be provided by the Buyer in accordance  with the Seller's
                  specifications.

16.7              Flight Operations Training

16.7.1            Flight Crew Training Course

16.7.1.1          The Seller  will  perform a flight  crew  transition  training
                  course  program for the Buyer's  flight  crews,  each of which
                  will consist of one captain (1) and one (1) first officer,  as
                  defined in Appendix A to this Clause 16. The  training  manual
                  used will be the Seller's Flight Crew Operating Manual.

16.7.1.2          The Buyer will use its  delivered  Aircraft  for any  required
                  Aircraft in-flight training. This training will not exceed one
                  (1)  session  of one and a half (1.5)  hours per  pilot.  When
                  Aircraft  in-flight  crew  training is  performed  in Blagnac,
                  France,   the  Seller   will   provide   free-of-charge   line
                  maintenance,   including   servicing,   preflight  checks  and
                  changing of minor components,  subject to conditions agreed in
                  the present Agreement.

16.7.1.3          The Buyer will provide mutually agreed spare parts as required
                  to support said Aircraft  in-flight  training and will provide
                  insurance in line with Clause 16.12.

16.7.1.4          In  all  cases, the Buyer will bear all expenses such as fuel,
                  oil and landing fees.

16.7.2.           Flight Crew Line Initial Operating Experience

16.7.2.1          In order to assist the Buyer with initial operating experience
                  after delivery of the first Aircraft,  the Seller will provide
                  to the Buyer pilot  instructor(s)  as defined in Appendix A to
                  this Clause 16.

16.7.2.2          The Buyer will reimburse the expenses for each such instructor
                  in accordance with Clause 16.6.2. Additional pilot instructors
                  can be provided at the Buyer's  expense and upon conditions to
                  be mutually agreed upon.

16.7.3            Cabin Attendants' Familiarization Course

                  The Seller will  provide  cabin  attendants'  course(s) to the
                  Buyer's  cabin  attendants,  as defined in  Appendix A to this
                  Clause 16.

                  The cabin attendants'  course, when incorporating the features
                  of the  Aircraft,  can be given at the  earliest two (2) weeks
                  before the delivery date of the first Aircraft.

16.7.4            Performance / Operations Course

                  The Seller will  provide  performance/operations  training for
                  the Buyer's  personnel as defined in Appendix A to this Clause
                  16.

                  The  available  courses are listed in the Seller's  applicable
                  Training Course Catalog.

16.8              Maintenance Training

16.8.1            The Seller will provide  maintenance  training for the Buyer's
                  ground personnel as defined in Appendix A to this Clause 16.

                  The  available  courses are listed in the Seller's  applicable
                  Training Course Catalog.

16.8.2            On-the-Job Training

                  Upon the  Buyer's  request,  the  Seller may be  consulted  to
                  identify competent outside organizations to provide on-the-job
                  training, which will be at the Buyer's charge.

16.8.3            Line Maintenance Initial Operating Experience Training

                  In order to assist the Buyer  during the entry into service of
                  the Aircraft, the Seller will provide to the Buyer maintenance
                  instructor(s)  at the Buyer's base as defined in Appendix A to
                  this Clause 16.

16.8.3.1          This line maintenance  initial operating  experience  training
                  will cover  training in handling  and  servicing  of Aircraft,
                  flight crew and maintenance coordination,  use of paper and/or
                  electronic  documentation,  and/or any other  activities which
                  may be deemed necessary after delivery of the first Aircraft.

16.8.3.2          The Seller will pay the expenses for said instructor(s).
                  Additional  maintenance  instructors  can  be  provided at the
                  Buyer's expense.

16.9              Supplier and  Engine Manufacturer Training

                  A  copy  of  the  Supplier  Training  Catalogue,  listing  the
                  suppliers that provide training, will be supplied to the Buyer
                  on request.

16.10             Training  Aids  and  Materials  for   the   Buyer's   Training
                  Organization


16.10.1           The Seller will provide to the Buyer the Airbus Computer Based
                  Training (CBT) System,  training aids and material, as used in
                  the Seller's  training  centers,  free of charge as defined in
                  Appendix A to this Clause 16.

                  The Airbus CBT System,  training aids and material supplied to
                  the Buyer will be similar to those used in the  Manufacturer's
                  training centers for the training  provided for the Buyer. The
                  Seller has no obligation to cause the  Manufacturer  to revise
                  the Airbus CBT System.

16.10.2           Delivery

16.10.2.1         The Seller  will  deliver to the Buyer the Airbus CBT  System,
                  training  aids and  materials as defined in Appendix A to this
                  Clause 16, at a date to be mutually agreed during the Training
                  Conference.

16.10.2.2         Those items  supplied to the Buyer  pursuant to Clause 16.10.1
                  above will be delivered FCA Toulouse,  Blagnac Airport.  Title
                  to and risk of loss of said  items will pass to the Buyer upon
                  delivery.

16.10.2.3         All costs  related to  transportation  and  insurance  of said
                  items from the FCA point to the Buyer's  facilities will be at
                  the Buyer's expense.

16.10.3           Installation

16.10.3.1         Upon the Buyer's request, the Seller may assist the Buyer with
                  the  initial  installation  of the  Airbus  CBT  System at the
                  Buyer's  facility  following  notification in writing that the
                  various    components,    which   are   in   accordance   with
                  specifications  defined in the Airbus CBT  Technical  Catalog,
                  are  ready  for  installation  and  available  at the  Buyer's
                  facility.

16.10.3.2         The Buyer will provide any and all the  necessary  hardware on
                  which the Airbus CBT System will be installed  and Seller will
                  not be responsible  for any  incompatibility  of such hardware
                  with the Airbus CBT System.

16.10.3.3         The  Airbus  CBT  System  will  be  installed  by the  Buyer's
                  personnel who have completed the Airbus CBT training,  and the
                  Seller will be held  harmless from any damage to person and/or
                  to  property  caused  by or in  any  way  connected  with  the
                  handling  and/or  installation of the Airbus CBT System by the
                  Buyer's personnel.

16.10.3.4         The Buyer will  reimburse  the  expenses  in  accordance  with
                  Clause  16.6.2,  for the  Seller's  personnel  required at the
                  Buyer's facility to conduct Airbus CBT Training and/or provide
                  installation assistance.

16.10.4           License

16.10.4.1         The  Seller  will  grant the Buyer a license to use the Airbus
                  CBT System, as defined in Appendix C to this Clause 16.

16.10.4.2         Supply of additional sets of courseware  supports,  as well as
                  any  extension  to the  license for such  courseware,  will be
                  subject to terms and conditions to be mutually agreed.

16.10.5           The Seller will not be  responsible  and hereby  disclaims any
                  and all  liabilities  resulting from or in connection with the
                  use by the Buyer of the  training  aids and  materials  at the
                  Buyer's facilities.

16.11             Proprietary Rights

                  The  Seller's  training  data and  documentation,  Airbus  CBT
                  System,  training  aids and  material are  proprietary  to the
                  Manufacturer  and its  suppliers  and the Buyer  agrees not to
                  disclose the content of the  courseware or any  information or
                  documentation  provided  by the Seller in relation to training
                  in whole or in part,  to any  third  party  without  the prior
                  written consent of the Seller.

16.12             Indemnification and Insurance

                  Indemnification  provisions  additional  to  those  in  Clause
                  16.6.2.5 and insurance requirements are as set forth in Clause
                  19.


<PAGE>


                                                         APPENDIX A TO CLAUSE 16

                               TRAINING ALLOWANCE

1.                FLIGHT OPERATIONS TRAINING

1.1               Flight Crew Training

                  The  Seller  will  provide   flight  crew  training   (regular
                  transition or CCQ as  applicable)  free of charge for * of the
                  Buyer's flight crews. *.

1.2               Flight Crew Line Initial Operating Experience

                  The Seller will provide to the Buyer pilot  instructor(s)  for
                  one (1)  pilot  instructor  month to assist  with  flight-crew
                  initial operating experience.

                  The  maximum  number of pilot  instructors  present at any one
                  time will be limited to two (2) pilot instructors.

1.3               Cabin Attendants' Familiarization Course

                  The  Seller  will  provide  to  the  Buyer  cabin  attendants'
                  training  free of charge for  twenty-four  (24) of the Buyer's
                  cabin attendants.

1.4               Performance/Operations Course(s)

                  The Seller will provide to the Buyer two hundred (200) trainee
                  days of performance/operations training free of charge for the
                  Buyer's personnel.

                  The  above   trainee   days  will  be  used   solely  for  the
                  performance/operations  training  courses  as  defined  in the
                  Seller's applicable Training Course Catalog.

                                                         APPENDIX A TO CLAUSE 16

2.                MAINTENANCE TRAINING

2.1               Maintenance Training Courses

                  The  Seller  will  provide  to the  Buyer  *  trainee  days of
                  maintenance training free of charge for the Buyer's personnel.

                  These  trainee  days will be used  solely for the  Maintenance
                  training  courses  as  defined  in  the  Seller's   applicable
                  Training Course  Catalog.  The number of Engine Run-up courses
                  will be limited to one (1) course for three (3)  trainees  per
                  Aircraft.

2.2               Line Maintenance Initial Operating Experience Training

                  The Seller will provide to the Buyer maintenance instructor(s)
                  at the Buyer's base free of charge for a period of * weeks.

3.                TRAINEE DAYS ACCOUNTING

                  Trainee days are counted as follows:

                  -  For instruction at the Seller's training  centers,  one (1)
                     day of  instruction  for one  (1)  trainee  equals  one (1)
                     trainee day, and the number of trainees at the beginning of
                     the  course  will be  counted  as the  number  of  trainees
                     considered to have taken the course.

                  -  For instruction  outside of the Seller's  training centers,
                     one (1) day of  secondment  of one  (1)  Seller  instructor
                     equals the actual  number of trainees  attending the course
                     or a minimum of twelve (12) trainee days.

4.                TRAINING AIDS AND CBT SYSTEM FOR BUYER'S TRAINING ORGANIZATION

4.1               The Seller will provide the Buyer with the following  training
                  aids:

                  -  *  sets  of  cockpit color paper panel drawings (scale 1/1)
                     and one (1) reproducible CD ROM

                  -  * set of cockpit color paper panel drawings (scale1/2)  and
                     one (1) reproducible CD ROM

4.2               The  Seller  will  provide  to the Buyer one (1)  "Airbus  CBT
                  System," defined in Clause 2.1.3 of Appendix C hereto, related
                  to the  Aircraft.  The Seller will also provide free of charge
                  updates to  courseware  in Clause 4.2 below when  developed by
                  the Manufacturer, for five (5) years after initial delivery of
                  the courseware.

                  The Airbus CBT System supplied to the Buyer will consist of

                  -  one (1) Airbus CBT installation/utilization guide

                  -  one (1) set of CD-ROM with run time software related to the
                     delivered courseware.

                  For Flight Operations Training

                  The A320  Family  flight crew  Airbus CBT  courseware  will be
                  delivered  with  - one  (1)  set  of CD ROM  with  Airbus  CBT
                  courseware files, including ADOPT/ACOPI tools - one (1) set of
                  Training  Interface  for  Performance  and Weight and  Balance
                  (TIPWB)

                  For Maintenance Training

                  The A320  Family  maintenance  Airbus CBT  courseware  will be
                  delivered  with  - one  (1)  set  of CD ROM  with  Airbus  CBT
                  courseware  files  - one  (1)  set of  training  documentation
                  master,  whenever  applicable - one (1) set of menu listings -
                  six (6) sets of videodisks, whenever applicable



                                                         APPENDIX B TO CLAUSE 16

                        MINIMUM RECOMMENDED QUALIFICATION

                      IN RELATION TO TRAINING REQUIREMENTS

                          (Regular Transition Courses)

The  prerequisites  listed  below  are  the  minimum  recommended   requirements
specified  for Airbus  training.  If the  appropriate  regulatory  agency or the
specific   airline   policy  of  the  trainee   demand   greater  or  additional
requirements, they will apply as prerequisites.

-                 CAPTAIN prerequisites
                  ---------------------

                  .  Fluency in English

                  . 1500 hours minimum  flying  experience as pilot . 1000 hours
                  experience on FAR/JAR 25 aircraft

                  . 200 hours experience as airline, corporate pilot or military
                  pilot . Must have flown  transport  type  aircraft,  as flying
                  pilot, within the last 12 months.

-                 FIRST OFFICER prerequisites
                  ---------------------------

                  .  Fluency in English

                  . 500 hours minimum  flying  experience as pilot of fixed wing
                  aircraft . 300 hours  experience  on FAR/JAR 25 aircraft . 200
                  hours flying  experience as airline pilot or a corporate pilot
                  or military  pilot . Must have flown  transport type aircraft,
                  as flying pilot, within the last 12 months.

                  For both CAPTAIN and FIRST  OFFICER,  if one or several of the
                  above criteria are not met, the trainee must follow

                  (i)      an adapted course (example: if not fluent in English,
                           an adapted course with a translator), or

                  (ii)     an Entry Level Training  ELT) program before entering
                           the regular or the adapted course.

                  Such course(s), if required, will be at the Buyer's expense.

-        MAINTENANCE PERSONNEL prerequisites

                  .  Fluency in English

                  .  Experience  on first or  second  generation  jet  transport
                     category   aircraft.   Knowledge   of  digital  techniques,
                     including ARINC 429, for electrics / avionics specialists.

If this criterion is not met the trainee must follow a Basic Digital Course.

<PAGE>



                                                         APPENDIX C TO CLAUSE 16


                LICENSE FOR USE OF AIRBUS COMPUTER BASED TRAINING

1.       GRANT

         The  Seller  grants  the Buyer  the  right,  pursuant  to the terms and
         conditions  herein,  to use the Airbus CBT System for the term (defined
         in Clause 4 below) of this license (the "License").

2.       DEFINITIONS

2.1      For  the  purpose  of  this  Appendix C  to  Clause 16,  the  following
         definitions will apply :


2.1.1    "Airbus CBT Courseware" means the programmed  instructions that provide
         flight crew and maintenance training.

2.1.2    "Airbus CBT Software" means the system software that permits the use of
         the Airbus CBT Courseware.

2.1.3    "Airbus  CBT  System"  means the combination of the Airbus CBT Software
         and the Airbus CBT Courseware.

2.1.4    "Student/Instructor Mode"  means  the  mode that allows the user to run
         the Airbus CBT Courseware.

2.1.5    "Airbus CBT Training" means the training enabling the Buyer to load and
         use the Airbus CBT System.

2.2      For the purpose of clarification,  it is hereby stated that all related
         hardware  required  for the  operation  of the Airbus CBT System is not
         part of the  Airbus  CBT  System  and will be  procured  under the sole
         responsibility of the Buyer.

3.       COPIES

3.1      The Buyer will be permitted to copy the Airbus CBT Software for back-up
         and  archiving  purposes  and for  loading of the  Airbus CBT  Software
         exclusively on the Buyer's workstations.  In such cases, the Buyer will
         advise  the  Seller in writing  stating  the number and  purpose of any
         copies made. Any other copying is strictly prohibited.

3.2      The Buyer agrees to reproduce  the  copyright and other notices as they
         appear on or within the  original  media on any  copies  that the Buyer
         makes of the Airbus CBT Software.

4.       TERM

         The rights  under this License will be granted to the Buyer for as long
         as the  Buyer  operates  the  aircraft  model to which the  Airbus  CBT
         Software  and the Airbus CBT  courseware  apply.  When the Buyer  stops
         operating  said  Aircraft  model,  the Buyer will return the Airbus CBT
         System and any  copies  thereof to the  Seller,  accompanied  by a note
         certifying that the Buyer has returned all existing copies.

5.       PERSONAL ON-SITE LICENSE

5.1      The above  described  License is  personal  to the Buyer for use of the
         Airbus  CBT  System   within  the  Buyer's   premises   only,   and  is
         nontransferable and nonexclusive.

5.2      The Buyer may not (i)  distribute  or  sublicense  any  portion  of the
         Airbus CBT  System,  (ii) modify or prepare  derivative  works from the
         Airbus CBT Software, (iii) publicly display visual output of the Airbus
         CBT Software,  or (iv) transmit the Airbus CBT Software  electronically
         by any means.

6.       CONDITIONS OF USE

6.1      Use of the Airbus CBT Software

         For  the  student  delivery  mode,  the  Buyer  will use the Airbus CBT
         Software for the exclusive purpose of

         (i)      including  students  on  the roster for one or several courses
                  syllabi in order to follow students' progression,

         (ii)     rearranging   course   syllabi  or  creating  new  ones  using
                  available  courseware  modules,  it being  understood that the
                  Seller  disclaims any  responsibility  regarding any course(s)
                  that may be modified or rearranged by the Buyer.


6.2      Use of the Airbus CBT Courseware

         The Buyer will use the Airbus CBT Courseware for the exclusive  purpose
         of performing  training  instructions  for its personnel,  or for third
         party personnel contracted to perform work on the Aircraft on behalf of
         the Buyer.  Such training will be performed at the Buyer's  facility or
         at a  subcontractor's  facility provided it is conducted by the Buyer's
         personnel.

7.       PROPRIETARY RIGHTS AND NONDISCLOSURE

         The Airbus CBT Software and Airbus CBT  Courseware,  the copyrights and
         any and all other author rights, intellectual, commercial or industrial
         proprietary  rights of whatever  nature in the Airbus CBT  Software and
         Airbus  CBT  Courseware  are and will  remain  with the  Seller  or its
         suppliers,  as the case may be. The Airbus CBT  Software and Airbus CBT
         Courseware and their contents are designated as confidential. The Buyer
         will not take any commercial advantage by copy or presentation to third
         parties of the Airbus CBT Software,  the documentation,  the Airbus CBT
         Courseware, and/or any rearrangement, modification or copy thereof.

         The Buyer  acknowledges the  Manufacturer's  proprietary  rights in the
         Airbus  CBT  System  and  undertakes  not to  disclose  the  Airbus CBT
         Software or Airbus CBT Courseware or parts thereof or their contents to
         any third  party  without  the prior  written  consent  of the  Seller.
         Insofar  as it is  necessary  to  disclose  aspects  of the  Airbus CBT
         Software  and Airbus CBT  Courseware  to the  Buyer's  personnel,  such
         disclosure  is permitted  only for the purpose for which the Airbus CBT
         Software and Airbus CBT  Courseware are supplied to the Buyer under the
         License.

8.       LIMITED WARRANTY

8.1      The  Seller  warrants  that  the  Airbus  CBT  System  is  prepared  in
         accordance  with the  state  of the art at the date of its  conception.
         Should the Airbus CBT System be found to contain any  nonconformity  or
         defect,  the Buyer will notify the Seller promptly thereof and the sole
         and  exclusive  liability  of the Seller  under this  Clause 8.1 of the
         Airbus CBT License will be to correct the same at its own expense.

 8.2     WAIVER, RELEASE AND RENUNCIATION

         THE WARRANTIES,  OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES
         OF  THE  BUYER  SET  FORTH  IN  THIS  LICENSE  ARE   EXCLUSIVE  AND  IN
         SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES,  RELEASES AND RENOUNCES,
         ALL OTHER  WARRANTIES,  OBLIGATIONS  AND  LIABILITIES OF THE SELLER AND
         RIGHTS, CLAIMS AND REMEDIES OF THE BUYER  AGAINST  THE  SELLER, EXPRESS
         OR  IMPLIED,  ARISING  BY  LAW  OR  OTHERWISE   WITH   RESPECT  TO  ANY
         NONCONFORMITY  OR DEFECT  IN  AIRBUS  CBT  SYSTEM  DELIVERED UNDER THIS
         LICENSE INCLUDING BUT NOT LIMITED TO:

(A)      ANY WARRANTY AGAINST HIDDEN DEFECTS;

(B)      ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

(C)      ANY  IMPLIED  WARRANTY  ARISING  FROM  COURSE OF PERFORMANCE, COURSE OF
         DEALING OR USAGE OF TRADE;

(D)      ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER  CONTRACTUAL
         OR IN TORT AND WHETHER OR NOT ARISING  FROM  THE  SELLER'S  NEGLIGENCE,
         ACTUAL OR IMPUTED; AND

(E)      ANY OBLIGATION,  LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR   DAMAGE
         TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF.

         THE SELLER WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR
         LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT,  INCIDENTAL, OR
         CONSEQUENTIAL  DAMAGES WITH RESPECT TO ANY  NONCONFORMITY  OR DEFECT IN
         THE AIRBUS CBT SYSTEM DELIVERED UNDER THIS LICENSE.

         Nothing  contained in the foregoing  Clause 8.2 will be  interpreted to
         deprive the Buyer of its right to enforce the rights and  remedies  set
         forth in this License.


<PAGE>


17 -              EQUIPMENT SUPPLIER PRODUCT SUPPORT
                  ----------------------------------

17.1              Equipment Supplier Product Support Agreements

17.1.1            The  Seller  has  obtained Supplier Product Support Agreements
                  transferable to the Buyer from Suppliers of  Seller  Furnished
                  Equipment listed in the Specification.

17.1.2            These   agreements  are  based  on  the  "World  Airlines  and
                  Suppliers Guide" and include Supplier commitments contained in
                  the Supplier  Product  Support  Agreements,  which include the
                  following:

                  (i)      Technical  data  and  manuals  required  to  operate,
                           maintain, service and  overhaul  the  Supplier  items
                           will  (a)  be  prepared  in   accordance   with   the
                           applicable  provisions  of ATA  Specification 100 and
                           101 in accordance with Clause 14  of  this Agreement,
                           (b) include revision service, and (c) be published in
                           the English language.   The  Seller  recommends  that
                           software data, supplied in the form of an appendix to
                           the  Component  Maintenance  Manual,  be  provided in
                           compliance with ATA Specification 102 up to  level  3
                           to protect Supplier's proprietary interests.

                  (ii)     Warranties  and  guarantees,   including   Suppliers'
                           standard warranties,  and in the case of Suppliers of
                           landing  gear,  service  life  policies  for selected
                           landing gear structures.

                  (iii)    Training to ensure efficient  operation,  maintenance
                           and overhaul of the Suppliers'  items for the Buyer's
                           instructors, shop and line service personnel.

                  (iv)     Spares data in compliance with ATA  Specification 200
                           or 2000, initial provisioning recommendations, spares
                           and   logistics   service,   including   routine  and
                           emergency deliveries.

                  (v)      Technical   service   to  assist   the   Buyer   with
                           maintenance,    overhaul,   repair,   operation   and
                           inspection  of  Supplier  items  as well as  required
                           tooling and spares provisioning.

17.2              Supplier Compliance

                  The Seller  will  monitor  Supplier  compliance  with  support
                  commitments defined in the Supplier Product Support Agreements
                  and will take action together with the Buyer if necessary.

17.3              Supplier Part Repair Stations

17.3.1            The   Manufacturer   has   developed   with  the  Suppliers  a
                  comprehensive  network of repair stations in North America for
                  those Supplier Parts originating from outside this territory.

                  As a  result,  most  Supplier  Parts are  repairable  in North
                  America,  and corresponding  repair stations are listed in the
                  AOG and Repair Guide, which is issued and regularly updated by
                  the Manufacturer.

                  The Seller  undertakes that the Supplier Parts that have to be
                  forwarded  for repair  outside North America will be sent back
                  to the Buyer with proper tagging as required by the FAA.

17.3.2            The Seller  will  support  the Buyer in cases where the agreed
                  repair turn time of an approved  repair  station is not met by
                  causing  free-of-charge loans or exchanges as specified in the
                  relevant Supplier Product Support  Agreements to be offered to
                  the Buyer.


<PAGE>


18 -              BUYER FURNISHED EQUIPMENT
                  -------------------------

18.1              Administration

18.1.1            Without   additional   charge  and  in  accordance   with  the
                  Specification,  the  Seller  will  cause the  Manufacturer  to
                  provide for the installation of the BFE, provided that the BFE
                  is referred to in the Airbus BFE Catalog of Approved Suppliers
                  by Products valid at the time the BFE is ordered.

                  The Seller will cause the  Manufacturer to advise the Buyer of
                  the dates by and location to which,  in the planned release of
                  engineering  for the  Aircraft,  the  Manufacturer  requires a
                  written detailed engineering definition. This description will
                  include the  description  of the dimensions and weight of BFE,
                  the information  related to its  certification and information
                  necessary  for the  installation  and operation  thereof.  The
                  Buyer will furnish such detailed  description  and information
                  by the dates specified. Thereafter, no information, dimensions
                  or weights will be revised unless authorized by an SCN.

                  The  Seller  will  also  provide  the Buyer in due time with a
                  schedule of dates and shipping  addresses  for delivery of BFE
                  and (when  requested  by the Seller)  additional  spare BFE to
                  permit installation of the BFE in the Aircraft and delivery of
                  the Aircraft in  accordance  with the delivery  schedule.  The
                  Buyer  will  provide  the BFE by such  dates in a  serviceable
                  condition,  to allow  performance  of any  assembly,  test, or
                  acceptance process in accordance with the industrial schedule.

                  The  Buyer  will  also   provide,   when   requested   by  the
                  Manufacturer,  at  Aerospatiale  works  and/or at DASA  works,
                  adequate field service,  including  support from BFE suppliers
                  to act in a technical  advisory  capacity to the Seller in the
                  installation, calibration and possible repair of any BFE.

18.1.2            The BFE will be imported  into  France or into  Germany by the
                  Buyer under a suspensive customs system ("Regime de l'entrepot
                  industriel pour fabrication  coordonnee" or  "Zollverschluss")
                  without  application  of any  French or German  tax or customs
                  duty,  and will be Delivered  Duty Unpaid (DDU) (as defined in
                  the April 1990 edition of  publication  No. 460,  published by
                  the International Chamber of Commerce), to

                  AEROSPATIALE MATRA S.A.
                  316 Route de Bayonne
                  31300 TOULOUSE
                  FRANCE

                  or

                  DAIMLER CHRYSLER AEROSPACE AIRBUS GmbH
                  Division Hamburger Flugzeugbau
                  Kreetslag 10
                  21129 HAMBURG
                  FEDERAL REPUBLIC OF GERMANY

                  as provided in Clause 18.1.1.

18.1.3            If the Buyer requests the Seller to  supply  directly  certain
                  items that are considered BFE  according to the Specification,
                  and if such request is notified to the Seller  in  due time in
                  order not to affect the delivery date  of  the  Aircraft,  the
                  Seller may agree to order such items  subject to the execution
                  of  an    SCN  reflecting  the  effect  on  price,  escalation
                  adjustment, and any other conditions of the Agreement. In such
                  a case the Seller  will  be  entitled  to  the  payment  of  a
                  reasonable  handling  charge  and  will  bear  no liability in
                  respect of delay and  product  support  commitments  for  such
                  items.

18.2              Requirements

                  The Buyer is  responsible  for, at its  expense,  and warrants
                  that BFE will (i) be  manufactured  by a  qualified  supplier,
                  (ii) meet the  requirements  of the applicable  Specification,
                  (iii)  comply with  applicable  requirements  incorporated  by
                  reference  to the  Type  Certificate  and  listed  in the Type
                  Certificate  Data Sheet,  and (iv) be approved by the Aviation
                  Authorities  delivering the Certificate of  Airworthiness  for
                  Export and by the Buyer's Aviation  Authority for installation
                  and  use on the  Aircraft  at the  time  of  Delivery  of such
                  Aircraft.  The Seller  will be  entitled to refuse any item of
                  BFE  that  is  incompatible   with  the   Specification,   the
                  engineering  definition  mentioned in the second  paragraph of
                  Clause 18.1.1 or the certification requirements.

18.3              Buyer's Obligation and Seller's Remedies

18.3.1            Any delay or failure in

                  (i)      furnishing  the  BFE  in serviceable condition at the
                           requested delivery date,

                  (ii)     complying  with  the  warranty in  Clause  18.2 or in
                           providing  the  descriptive  information  or  service
                           representatives mentioned in Clause 18.1.1, or

                  (iii)    in obtaining any required approval for such equipment
                           under  the  above  mentioned   Aviation   Authorities
                           regulations may delay the  performance  of any act to
                           be  performed by the  Seller,  and  cause  the  Final
                           Contract Price of the  Aircraft  to  be  adjusted  in
                           accordance  with  the  updated   delivery   schedule,
                           including, in particular, the costs the Seller incurs
                           that   are  attributable  to  the  delay  or  failure
                           described above, such as storage,   taxes,  insurance
                           and costs of out-of sequence installation.

18.3.2            In addition to the consequences outlined in Clause  18.3.1, in
                  the event of a delay or failure described in Clause 18.3.1,

                  (i)      the Seller  may, after  consultation  with the Buyer,
                           select, purchase and install equipment similar to the
                           BFE at issue, in which event the Final Contract Price
                           of the affected Aircraft will also  be  increased  by
                           the purchase price of such equipment, plus reasonable
                           costs  and  expenses  incurred  by  the  Seller  for
                           handling    charges,    transportation,    insurance,
                           packaging and, if required  and not already  provided
                           for in the price of  the Aircraft, for adjustment and
                           calibration; or

                  (ii)     if the BFE is  delayed more  than  thirty  (30)  days
                           beyond, or unapproved  within thirty (30) days of the
                           date pursuant to Clause  18.1.1,  then the Seller may
                           deliver or the Buyer may  elect to have the  Aircraft
                           delivered without the installation of such equipment,
                           notwithstanding the terms of Clause 7.2 insofar as it
                           may otherwise have applied,whereon the Seller will be
                           relieved of all obligations to install such equipment

18.4              Title and Risk of Loss

                  Title to and risk of loss of BFE will at all times remain with
                  the  Buyer,  except  that  risk  of loss  (limited  to cost of
                  replacement  of said BFE and excluding in  particular  loss of
                  use) will be with the  Seller for as long as the BFE is in the
                  care, custody and control of the Seller.


<PAGE>



19-               Indemnities and Insurance

19.1              Seller's Indemnities

                  The Seller will be solely  liable for and will  indemnify  and
                  will  hold the  Buyer,  its  directors,  officers,  agents  or
                  employees,  harmless against all losses,  liabilities,  costs,
                  expenses and  damages,  including  court costs and  reasonable
                  attorneys' fees ("Losses"), arising from

                  (i)      claims for injuries  to, or deaths of, the  Seller's,
                           Manufacturer's   or   any   Associated   Contractor's
                           respective directors,  officers, agents or employees,
                           or  loss  or  damage  to   property  of  the  Seller,
                           Manufacturer  or any  Associated  Contractor or their
                           respective employees when such losses occur during or
                           are  incidental  to (a) the  Buyer's  exercise of its
                           inspection  rights under Clause 7, (b) the  Technical
                           Acceptance  Process  described  in  Clause 8, (c) the
                           provision of Field  Assistance  pursuant to Clause 15
                           or (d) the  provision of training  pursuant to Clause
                           16, and

                  (ii)     claims for injuries to or deaths of third parties, or
                           loss of property of third parties,  occurring during,
                           or  incidental  to (a) the  Buyer's  exercise  of its
                           inspection  rights  pursuant  to  Clause 7 or (b) the
                           Technical Acceptance Process described in Clause 8,

                  provided  that  such  Losses  do not  result  from  the  gross
                  negligence or willful  misconduct of the Buyer, its directors,
                  officers, agents or employees.

19.2              Buyer's Indemnities

                  The Buyer  will be solely  liable for and will  indemnify  and
                  will hold the Seller, the Manufacturer, each of the Associated
                  Contractors and their respective subcontractors, Affiliates of
                  the Seller, the Seller's  representatives,  and the respective
                  assignees,  directors, officers, agents, and employees of each
                  of the foregoing, harmless against all Losses arising from

                  (i)      claims  for  injuries  to or  deaths  of the  Buyer's
                           directors,  officers, agents or employees, or loss or
                           damage to  property  of the  Buyer or its  employees,
                           when such losses  occur during or are  incidental  to
                           (a) the  Buyer's  exercise of its  inspection  rights
                           under Clause 7; (b) the Technical  Acceptance Process
                           described  in  Clause 8, (c) the  provision  of Field
                           Assistance   pursuant   to  Clause  15,  or  (d)  the
                           provision of training pursuant to Clause 16; and

                  (ii)     claims for injuries to or deaths of third parties, or
                           loss of property of third parties,  where such losses
                           occur during or  incidental  to (a) the  provision of
                           Field  Services  under  Clause 15 or (b) arise out of
                           the provision of training pursuant to Clause 16,

                  provided  that  such  Losses  do not  result  from  the  gross
                  negligence or willful misconduct of the Seller.

19.3              Notice and Defense of Claims

                  (i)      If  any  claim  is  made or suit is brought against a
                           party  or  entity  entitled  to indemnification under
                           this Clause 19 (the  "Indemnitee")  for  damages  for
                           which  liability  has been assumed by the other party
                           under   this   Clause  19,  (the  "Indemnitor"),  the
                           Indemnitee  will  promptly   give   notice   to   the
                           Indemnitor  and  the  Indemnitor  (unless   otherwise
                           requested by the Indemnitee) will assume and  conduct
                           the defense, or settlement,  of  such  suit,  as  the
                           Indemnitor will deem prudent.  Notice of the claim or
                           suit will be accompanied by all information pertinent
                           to the matter  as  is  reasonably  available  to  the
                           Indemnitee  and  will be followed by such cooperation
                           by the Indemnitee as the Indemnitor  or  its  counsel
                           may  reasonably   request  at   the  expense  of  the
                           Indemnitor.

                  (ii)     In the event that the Indemnitor  fails or refuses to
                           assume the  defense of any claim or lawsuit  notified
                           to it under this Clause 19, the Indemnitee  will have
                           the right to proceed  with the defense or  settlement
                           of the claim or lawsuit as it deems  prudent and will
                           have a claim  over  against  the  Indemnitor  for any
                           judgments,  settlements, costs or expenses, including
                           reasonable  attorneys' fees.  Further, in such event,
                           the  Indemnitor  will be  deemed to have  waived  any
                           objection or defense to the Indemnitee's  claim based
                           on the reasonableness of any settlement.

19.4              Insurance

                  (i)      Each  party  will  maintain  adequate   insurance  to
                           support  its  undertakings  under this Clause 19, and
                           will  bear any  deductible  amounts  set forth in the
                           applicable  policies.  With respect to Clause 19.1(i)
                           and  19.2(i),  the  Buyer  and the  Seller  will each
                           provide a certificate  of insurance,  if requested by
                           the other  party,  prepared  by an  insurance  broker
                           licensed   and  skilled  in  the  field  of  aviation
                           insurance,  in English and containing  such specifics
                           as the requesting party may reasonably demand.

                  (ii)     With  respect  to  the  Buyer's undertaking in Clause
                           19.2(ii), the Buyer will

                           (a)      cause  the  Seller,   its  Affiliates,   the
                                    Manufacturer,   each   of   the   Associated
                                    Contractors     and     their     respective
                                    subcontractors,   Seller's  representatives,
                                    and  the  respective  assignees,   officers,
                                    directors,   agents  and  employees  of  the
                                    foregoing,   to  be  named   as   additional
                                    insureds   under   the   Buyer's   liability
                                    policies;

                           (b)      obtain  and cause the  carriers  of its hull
                                    all  risks  and hull war  risk  policies  to
                                    waive all rights of subrogation  against the
                                    Seller,  its Affiliates,  the  Manufacturer,
                                    each of the Associated Contractors, Seller's
                                    representatives     and    the    respective
                                    assignees,  officers,  directors, agents and
                                    employees of the foregoing; and

                           (c)      not less than seven (7) Working  Days before
                                    the  commencement of training to be provided
                                    under  Clause  16,  furnish  to  the  Seller
                                    certificates of insurance,  in English, from
                                    a licensed  insurance  broker skilled in the
                                    field of aviation insurance, certifying that

(1)      the  requirements  of  the  foregoing Clauses 19.4 (ii)(a) and (b) have
         been met;

(2)      the limits and insurance periods of each applicable policy;

(3)      the  applicable  policies  are primary and noncontributory to any other
         insurance maintained by the Seller;

(4)      the applicable policies contain a cross-liability provision; and

(5)      the  insurance  coverage  will not become  ineffective,   canceled,  or
         materially decreased or changed except on seven(7)Working  Days' notice
         to the Seller.


<PAGE>


20 -              ASSIGNMENTS AND TRANSFERS
                  -------------------------

20.1              Successors and Assigns

                  Subject to the  provisions  of this Clause 20, this  Agreement
                  will  inure  to  the  benefit  of  and  be  binding  upon  the
                  successors and assigns of the parties  hereto.  This Agreement
                  may not be  assigned  in  whole  or in part  by  either  party
                  without  the prior  written  consent of the  other,  except as
                  specifically provided herein.

20.2              Assignments and Transfers by the  Seller
                  ----------------------------------------

20.2.1            Seller Designations

                  The  Seller  may at  any  time,  with  notice  to  the  Buyer,
                  designate the Manufacturer, ASCO, any Associated Contractor or
                  any Affiliate of the Seller,  or any particular  facilities or
                  particular personnel of each, to be responsible for, and/or to
                  provide the goods and  services  to be  provided or  performed
                  under this  Agreement.  No such  designation  will release the
                  Seller from any of its obligations hereunder.

20.2.2            Seller Assignments

                  The Seller may at any time assign any of its rights to receive
                  money,  and any of its duties to effect  sale and  delivery of
                  the  Aircraft,  or  any  of its  responsibilities,  duties  or
                  obligations to perform any other obligations hereunder, to the
                  Manufacturer,  any of the Associated Contractors,  ASCO or any
                  Affiliate  of the Seller,  the  Manufacturer,  the  Associated
                  Contractors  or ASCO.  No such  assignment  will  release  the
                  Seller from any of its obligations hereunder.

20.2.3            Transfer of Rights and Obligations upon Reorganization

                  If at any time until the date upon  which all the  obligations
                  and  liabilities  of the Seller under this Agreement have been
                  discharged,   the  legal  structure,  the  membership  or  the
                  business of the Seller is reorganized or the legal form of the
                  Seller is  changed  and as a  consequence  thereof  the Seller
                  wishes the Buyer to accept the  substitution  of the Seller by
                  another  entity within the  restructured  Airbus group (or the
                  Seller in its new legal form) ("Newco") as contemplated below,
                  the Seller will promptly notify the Buyer of its wish.

                  In such event,  the Seller may request the Buyer to enter into
                  a novation  agreement  and/or other agreement  having the same
                  effect whereby the Seller's rights and obligations  under this
                  Agreement are novated or transferred  in favor of Newco.  Upon
                  receipt of such request,  the Buyer will enter into a novation
                  agreement and/or other  appropriate  agreement,  provided that
                  the Buyer's  rights and  obligations  under this Agreement are
                  not  materially  adversely  affected by such  novation  and/or
                  other agreement. *.

                  Until   any   such   novation   agreement/other    appropriate
                  documentation has come into effect, this Agreement will remain
                  in full force and effect,  and each party will act  diligently
                  and in good faith to implement the novation  agreement  and/or
                  other  appropriate  documentation as soon as practicable after
                  Newco has come into existence.

20.3              Assignments by the Buyer

20.3.1            Assignment on Sale, Merger or Consolidation

                  *

20.3.2            Assignment to Affiliate

                  The Buyer may assign its rights and obligations hereunder with
                  respect  to one or  more  Aircraft  to any of its  Affiliates,
                  provided  that (i) such  Affiliate  has executed an assumption
                  agreement,  in form and substance  satisfactory to the Seller,
                  agreeing to assume all of the Buyer's  obligations  under this
                  Agreement,  and (ii) the Buyer remains obligated to the Seller
                  under this  Agreement as though the  assignment  had not taken
                  place.

20.3.3            Assignments for Financing Purposes

                  (i)      At or following delivery,  the Buyer will be entitled
                           to assign its rights and  obligations  under  Clauses
                           12,  13 and 17 hereof to any  provider  of  financing
                           with respect to one or more  Aircraft,  to the extent
                           that  such  Clauses  apply to the  Aircraft  that are
                           being   financed,   as   security   for  the  Buyer's
                           obligations with respect to such financing,  provided
                           that  such  assignment  does  not,  in  the  Seller's
                           reasonable  judgment,  adversely  affect the Seller's
                           rights hereunder.

                  (ii)     The Buyer  will be  entitled  to assign its rights to
                           take title to one or more  Aircraft at delivery,  and
                           its rights and  obligations  under Clauses 12, 13, 17
                           and this Clause 20, to the extent such Clauses  apply
                           to the Aircraft being delivered,  to a trust or other
                           special  purpose  entity,  in each case in connection
                           with the financing of one or more Aircraft,  provided
                           that  the  assignment   does  not,  in  the  Seller's
                           reasonable  judgment,  adversely  affect the Seller's
                           rights hereunder.

20.3.4            Post-Delivery Sale or Lease

                  The Seller agrees that, upon the  post-delivery  sale or lease
                  of an  Aircraft  (including  a sale  or  lease  for  financing
                  purposes) all of the Buyer's rights and obligations  remaining
                  at the time of such sale or lease under Clauses 12, 13, and 17
                  of this  Agreement  and this Clause 20.3.4 with respect to the
                  affected  Aircraft will inure to the benefit of the transferee
                  upon  delivery  to the  Seller of notice of such sale or lease
                  and written agreement by the transferee, in form and substance
                  satisfactory to the Seller, to be bound by the terms thereof.

20.3.5            Seller's Cooperation with Financing

                  The Seller agrees to cooperate  with the Buyer's  financing of
                  the Aircraft by providing written consents, legal opinions and
                  such other documents as the Buyer or its lender may reasonably
                  request.

21 -              TERMINATION FOR CERTAIN EVENTS
                  ------------------------------

21.1              Buyer Termination Events

21.1.1            Each of the  following  will  constitute a "Buyer  Termination
                  Event"  under  this   Agreement  and   immediately   upon  the
                  occurrence of a Buyer Termination Event, the Buyer will notify
                  the Seller of such occurrence in writing as provided in Clause
                  22.2 hereof, provided,  however, that any failure by the Buyer
                  to notify the Seller will not  prejudice  the Seller's  rights
                  hereunder:

                  (1)      The  Buyer  or any of its  Affiliates  commences  any
                           case,  proceeding or other action with respect to the
                           Buyer or any of its  Affiliates  in any  jurisdiction
                           relating to bankruptcy,  insolvency,  reorganization,
                           relief  from  creditors,   arrangement,   winding-up,
                           liquidation, dissolution or other relief with respect
                           to its debts (a "Buyer Insolvency Proceeding") or any
                           other party commences a Buyer  Insolvency  Proceeding
                           against the Buyer or any of its  Affiliates  and such
                           Insolvency  Proceeding remains unstayed,  undismissed
                           or undischarged for * days.

                  (2)      An action is commenced  seeking the  appointment of a
                           receiver,   trustee,   custodian  or  other   similar
                           official for the Buyer or any of its  Affiliates  for
                           all or  substantially  all of its  assets,  and  such
                           action remains unstayed,  undismissed or undischarged
                           for * days,  or the  Buyer  or any of its  Affiliates
                           makes a general  assignment  for the  benefit  of its
                           creditors.

                  (3)      An action is  commenced  against  the Buyer or any of
                           its  Affiliates  seeking  issuance  of a  warrant  of
                           attachment,  execution,  distraint or similar process
                           against  all or any  substantial  part of its assets,
                           and such  action  remains  unstayed,  undismissed  or
                           undischarged for * days.

                  (4)      The Buyer or any of its Affiliates becomes  insolvent
                           or  fails  generally  to pay its debts as they become
                           due.

                  (5)      The Board of Directors (or other governing  corporate
                           body) of the Buyer directs or authorizes  the Buyer's
                           management to commence  negotiations with one or more
                           of its  significant  creditors with a view to general
                           readjustment  or  rescheduling of all or any material
                           part of its indebtedness which it would otherwise not
                           be able to pay as it falls due.

                  (6)      The Buyer or any permitted  assignee or transferee of
                           the Buyer  fails to make any  payment  of a  deposit,
                           Predelivery  Payment,  Final Contract Price or amount
                           due for Initial  Provisioning when such payment comes
                           due.

                  (7)      The Buyer or any of its Affiliates  fails to make any
                           other payment when due under this  Agreement or under
                           any other  agreement  between the Buyer or any of its
                           Affiliates  and the  Seller or any of its  Affiliates
                           within * of  receiving  notice  from Seller that such
                           payment is due.

                  (8)      The Buyer  defaults in its  obligations  under Clause
                           9.2 of this Agreement to take delivery of an Aircraft
                           which  is  Ready  for  Delivery  and  has  been  duly
                           tendered to the Buyer,  which  failure will be deemed
                           to be a rejection of the Aircraft without warrant.

                  (9)      The Buyer  defaults in the  observance or performance
                           of any material  covenant,  undertaking or obligation
                           contained  in this  Agreement  or any other  material
                           agreement  between  the Buyer and the Seller  and, if
                           such  breach or default  is  capable of being  cured,
                           such  breach  or  default  is not  cured  within  any
                           specified  cure  period,  or if  no  cure  period  is
                           specified,  within  * of  receiving  notice  of  such
                           breach or default.

21.1.2            In  the  event  of any Buyer Termination Event the Seller will
                  have  the  right  to elect one or more of the remedies in this
                  Clause    21.1.2.  The  Seller's  remedies  will  specifically
                  include,  without  limitation,  the right by written notice to
                  the   Buyer,   effective   immediately,  to  (i)  suspend  its
                  performance   under   this  Agreement   and  under  any  other
                  agreements between the Buyer and the  Seller;  (ii)  terminate
                  this Agreement or any other  agreement  between  the Buyer and
                  the Seller with respect to any or all  Aircraft  or  aircraft,
                  equipment,  services,  data  and  other  items  undelivered or
                  unfurnished on the effective date of such  termination;  (iii)
                  reschedule the Delivery Date of any and all Aircraft remaining
                  to be delivered under this Agreement as of  the  date  of  the
                  occurrence of the Buyer  Termination  Event;  (iv)  reschedule
                  delivery  of  any  and  all aircraft remaining to be delivered
                  under any other agreement between the Buyer and the  Seller as
                  of the date of the occurrence of the Buyer Termination  Event;
                  and (v) in the event of termination of this Agreement, retain,
                  as damages for breach and not as a penalty, an amount equal to
                  (a) all Predelivery Payments previously received by the Seller
                  from the Buyer under this Agreement in respect of the Aircraft
                  terminated, (b) any other advance payments to the  Seller made
                  theretofore  under  this  Agreement  or  any  other  agreement
                  between the  Buyer  or any of its Affiliates and the Seller or
                  any of its Affiliates  in  respect of the Aircraft terminated,
                  and (c) any other amounts agreed to between the Buyer  and the
                  Seller pursuant to this Agreement in respect of  the  Aircraft
                  terminated.

                  The  Seller  will  have the  right to elect one or more of the
                  foregoing  remedies,  and  exercise of any one or more of such
                  remedies  will not be deemed a waiver  of any other  remedy or
                  remedies provided herein or under applicable law.

21.2              Seller Termination Events

                  *.

21.3              Insecurity Events

21.3.1            Each of the following will  constitute an  "Insecurity  Event"
                  and any remedies therefor provided in this Clause 21.3 will be
                  without  prejudice to and will be in addition to, and not as a
                  substitute  for any rights  the Seller may have,  at law or as
                  set forth in Clause 21.1 hereof, to terminate this Agreement:

                  (1)      With  respect  to  any  credit  or  lease   financing
                           facility  or  similar  agreement,  including  but not
                           limited to any  agreement  signed  subsequent  to the
                           date hereof, for the lease or use of aircraft, either
                           (i) the commitment to lend,  finance or lease, as the
                           case may be, is  terminated  (other than by the Buyer
                           or for reasons  unrelated to the financial  condition
                           or  performance  of the  Buyer)  or (ii) a  financial
                           covenant  thereunder  is breached  and such breach is
                           not waived or cured within *.

                  (2)      The Buyer or any of its Affiliates  fails to make any
                           payments  as they become due to or for the benefit of
                           the Propulsion Systems manufacturer or an A320 family
                           operating lessor, under their respective  agreements,
                           provided that the applicable cure period, if any, has
                           expired.

                  (3)      The  Buyer  is  involuntarily   removed  from  active
                           membership   and   participation   in   any   airline
                           clearinghouse   (or  any  substitute  or  replacement
                           arrangement),  or the Buyer is placed on a cash basis
                           by  such   clearinghouse   (or  such   substitute  or
                           replacement arrangement),  in either case as a result
                           of  the  Buyer's  failure  to  meet  financial  tests
                           mandated by such clearinghouse or to make payments to
                           or for the benefit of such clearinghouse when due.

                  (4)      The Buyer defaults in (i) the payment of principal or
                           interest  under one or more  agreements  for borrowed
                           money and/or (ii) the payment of rent or  indemnities
                           under  one or  more  lease  agreements  that,  in the
                           aggregate,   have  a  principal   amount  of  $*  (US
                           dollars--  *) or  more  (determined  in the  case  of
                           borrowed money by the amount  outstanding and, in the
                           case  of  a  lease,  by  the  present  value  of  the
                           remaining  rent payable  thereunder  discounted  at *
                           when the same becomes due, if such nonpayment  either
                           allows  or  results  in  the   acceleration  of  such
                           indebtedness.

                  (5)      At the end of each calendar month, the Buyer fails to
                           have a minimum of $* (US  dollars--  *) of  liquidity
                           resources   represented   by  the  aggregate  of  the
                           following:  (a) any unencumbered  cash balances,  (b)
                           any  trade  receivables  created  by the Buyer in the
                           ordinary   course   of   business   that   have  been
                           outstanding  for  fewer  than *  days  and  that  are
                           current,  due and  payable  within * days and against
                           which no  provisions  have been made by the Buyer and
                           (c) any unused lines of credit available to the Buyer
                           from reputable financial institutions on which, under
                           the terms of the  applicable  credit  agreement,  the
                           Buyer is then eligible to draw.

21.3.2            Within * of the occurrence of an Insecurity  Event,  the Buyer
                  will  notify the Seller of such  occurrence  in writing and by
                  courier or facsimile  (in either case in  accordance  with the
                  notice provisions of this Agreement),  provided however,  that
                  any  failure  by the  Buyer  to  notify  the  Seller  will not
                  prejudice the Seller's rights hereunder.

21.3.3            Upon receipt of notice from the Buyer under Clause 21.3.2,  or
                  on becoming aware by any other means of the occurrence  of  an
                  Insecurity Event, the  Seller  will  be  entitled  to  request
                  assurance  from  the  Buyer  of  the  Buyer's  ability to duly
                  perform each of the Buyer's obligations under  this  Agreement
                  and any other agreement between the Buyer and the  Seller  (or
                  any  of  their  respective  Affiliates)  ("Assurance").   Such
                  Assurance will be evidenced in writing  and  will  consist  of
                  either (i) evidence that the event or circumstance giving rise
                  to  the  Insecurity Event has been cured or eliminated or (ii)
                  assurance  substantially   identical   to   that  constituting
                  "adequate assurance of due performance" within the meaning  of
                  Article 2-609 of the Uniform Commercial Code as in  effect  in
                  the state of New York on the date of this Agreement.

21.3.4            In the event that the Buyer does not provide Assurance to  the
                  Seller within * of the request therefor  by  the  Seller,  the
                  Seller will have the right, at its option, to exercise any one
                  or more of the remedies in this Clause  21.3.4.   The Seller's
                  remedies will specifically include,  without  limitation,  the
                  right by written notice to the Buyer,  effective  immediately,
                  to (i)  suspend its performance under this Agreement and under
                  any  other  agreements  between the Buyer and the Seller; (ii)
                  terminate this Agreement or any other  agreement  between  the
                  Buyer and the Seller with respect  to  any  or all Aircraft or
                  aircraft,   equipment,   services,   data   and   other  items
                  undelivered or unfurnished  on  the  effective  date  of  such
                  termination; (iii) reschedule the Delivery Date of any and all
                  Aircraft  remaining to be delivered under this Agreement as of
                  the date of the  occurrence  of  the  Insecurity  Event;  (iv)
                  reschedule delivery of any and all aircraft  remaining  to  be
                  delivered under any other agreement between the  Buyer and the
                  Seller as of the date of  the  occurrence  of  the  Insecurity
                  Event;  and  (v) in the event of termination of this Agreement
                  retain, as  damages for breach and not as a penalty, an amount
                  equal to (a)  all  Predelivery Payments previously received by
                  the Seller from the Buyer under this Agreement in  respect  of
                  the Aircraft terminated, (b) any other advance payments to the
                  Seller made theretofore under  this  Agreement  or  any  other
                  agreement between the Buyer or  any  of its Affiliates and the
                  Seller of any of its Affiliates in  respect  of  the  Aircraft
                  terminated, and (c)  any  other  amounts agreed to between the
                  Buyer and the Seller pursuant to this Agreement in  respect of
                  the Aircraft terminated.

                  The  Seller  will  have the  right to elect one or more of the
                  foregoing  remedies,  and  exercise of any one or more of such
                  remedies  will not be deemed a waiver  of any other  remedy or
                  remedies provided herein or under applicable law.

21.4              Information Covenants

                  The Buyer hereby  covenants and agrees that,  from the date of
                  this Agreement  until no further  Aircraft are to be delivered
                  hereunder,  the Buyer will furnish or cause to be furnished to
                  the Seller the following:

                  (a)      Annual Financial Statements.  As  soon  as  available
                           and in any event within 120 days  after  the close of
                           each  fiscal year of the Buyer, (i) a copy of the SEC
                           Form 10-K filed by the Buyer with the Securities  and
                           Exchange  Commission  or  any  successor thereto (the
                           "SEC") for such fiscal year, or, if no such Form 10-K
                           was filed by the Buyer for such a  fiscal  year,  the
                           consolidated  balance  sheet  of  the  Buyer  and its
                           Subsidiaries, as at the end of such fiscal  year  and
                           the related consolidated statements of operations, of
                           common stockholders' equity  (deficit)  and  of  cash
                           flows for such fiscal year, setting forth comparative
                           consolidated figures as of the end  of  and  for  the
                           preceding fiscal year, and examined by (x)  any  "Big
                           Five" accounting  firm  or  (y)  any  other  firm  of
                           independent public accountants of recognized standing
                           selected  by  the  Buyer and reasonably acceptable to
                           the Seller, whose opinion will not be qualified as to
                           the scope of audit or as to the status of  the  Buyer
                           as  a  going  concern, and (ii) a certificate of such
                           accounting  firm   stating  that  its  audit  of  the
                           business  of  the  Buyer  was conducted in accordance
                           with generally accepted auditing standards.

                  (b)      Quarterly Financial Statements.  As soon as available
                           and  in  any  event within 45 days after the close of
                           each of the first three quarterly accounting  periods
                           in each fiscal year of the Buyer, a copy of  the  SEC
                           Form 10-Q filed by the Buyer with the  SEC  for  such
                           quarterly period, or, if no such Form 10-Q was  filed
                           by the Buyer  with  respect  to  any  such  quarterly
                           period, the consolidated balance sheet of  the  Buyer
                           and its Subsidiaries, as at the end of such quarterly
                           period and the  related  consolidated  statements  of
                           operations  for  such  quarterly  period  and for the
                           elapsed portion of the fiscal  year  ended  with  the
                           last  day  of  such quarterly period and in each case
                           setting forth comparative consolidated figures as  of
                           the end of and for the related periods in  the  prior
                           fiscal year, all of which will  be  certified  by  an
                           Authorized  Officer  of the Buyer, subject to changes
                           resulting  from  audit  and  normal  year-end   audit
                           adjustments.

                  (c)      Other   Information.   Promptly   upon   transmission
                           thereof,  copies  of any  filings  and  registrations
                           with,  and reports to, the SEC by the Buyer or any of
                           its  Subsidiaries,  and, with reasonable  promptness,
                           such other  information  or documents  (financial  or
                           otherwise) as the Seller may reasonably  request from
                           time to time.

                  For the purposes of this  Subclause  21.4,  (x) an "Authorized
                  Officer" of the Buyer will mean the Chief  Executive  Officer,
                  the Chief  Financial  Officer or any Vice  President and above
                  who reports  directly  or  indirectly  to the Chief  Financial
                  Officer and (y)  "Subsidiaries"  will mean,  as of any date of
                  determination,  those  companies  owned  by  the  Buyer  whose
                  financial  results  the Buyer is  required  to  include in its
                  statements of consolidated operations and consolidated balance
                  sheets.

21.5              Nothing contained in this Clause 21 will be deemed to waive or
                  limit the rights and remedies  available  to the parties under
                  the Uniform Commercial Code  as in effect in the State of  New
                  York  as  of the effective date of this Agreement (the "UCC"),
                  including,  but  not  limited  to,  those  rights and remedies
                  described in Article 2, Section 609 of the UCC.

21.6              NOTWITHSTANDING  ANY  PROVISIONS  OF THIS CLAUSE 21, OR OF ANY
                  OTHER  PROVISION  OF THIS  AGREEMENT,  INCLUDING  CLAUSE 11.5,
                  NEITHER   THE  BUYER  NOR  THE  SELLER   WILL  BE  LIABLE  FOR
                  INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING
                  OUT OF OR IN CONNECTION  WITH THIS AGREEMENT OR THE RIGHTS AND
                  OBLIGATIONS ARISING HEREUNDER.


<PAGE>


22 -              MISCELLANEOUS PROVISIONS
                  ------------------------

22.1              Data Retrieval

                  On the Seller's reasonable request, the Buyer will provide the
                  Seller with all the necessary data, as customarily compiled by
                  the Buyer and pertaining to the operation of the Aircraft,  to
                  assist  the  Seller  in making an  efficient  and  coordinated
                  survey of all reliability,  maintenance,  operational and cost
                  data with a view to  improving  the safety,  availability  and
                  operational costs of the Aircraft.

22.2              Notices

                  All notices and requests required or authorized hereunder will
                  be  given  in  writing  either  by  personal   delivery  to  a
                  responsible  officer of the party to whom the same is given or
                  by  commercial  courier,  certified  air mail (return  receipt
                  requested) or facsimile at the addresses and numbers set forth
                  below.  The date on which  any such  notice or  request  is so
                  personally delivered, or if such notice or request is given by
                  commercial courier,  certified air mail or facsimile, the date
                  on which sent, will be deemed to be the effective date of such
                  notice or request.

                  The Seller will be addressed at:

                  2, rond-point Maurice Bellonte

                  31700 BLAGNAC  FRANCE
                  Attention:  Director - Contracts
                  Telephone: 33 05 61 30 40 12
                  Telecopy:   33 05 61 30 40 11

                  The Buyer will be addressed at:

                  12015 East 46th Avenue, Suite 200
                  Denver, CO   80239-3116
                  Attention: Vice President Administration and General Counsel
                  Telephone:  303-371-7400, Ext. 1004
                  Fax:  303-371-9669

                  From time to time,  the party  receiving the notice or request
                  may designate another address or another person.

22.3              Waiver

                  The failure of either  party to enforce at any time any of the
                  provisions  of this  Agreement,  to exercise  any right herein
                  provided  or to require at any time  performance  by the other
                  party  of any  of  the  provisions  hereof  will  in no way be
                  construed to be a present or future waiver of such  provisions
                  nor in any way to affect the validity of this Agreement or any
                  part  hereof  or the right of the other  party  thereafter  to
                  enforce each and every such  provision.  The express waiver by
                  either party of any  provision,  condition or  requirement  of
                  this  Agreement  will not  constitute  a waiver of any  future
                  obligation  to  comply  with  such  provision,   condition  or
                  requirement.

22.4              INTERPRETATION AND LAW

                  THIS  AGREEMENT  WILL BE  GOVERNED  BY AND  CONSTRUED  AND THE
                  PERFORMANCE  THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE
                  LAWS OF THE STATE OF NEW YORK,  WITHOUT  GIVING  EFFECT TO ITS
                  CONFLICTS  OF  LAWS   PROVISIONS  THAT  WOULD  RESULT  IN  THE
                  APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

                  Each  of the  Seller  and the  Buyer  (i)  hereby  irrevocably
                  submits itself to the nonexclusive  jurisdiction of the courts
                  of the  state of New  York,  New York  County,  of the  United
                  States  District Court for the Southern  District of New York,
                  for the  purposes  of any  suit,  action  or other  proceeding
                  arising out of this  Agreement,  the subject  matter hereof or
                  any of the  transactions  contemplated  hereby  brought by any
                  party or parties  hereto,  and (ii) 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,  any defense  based on sovereign or other
                  immunity  or that the suit ,  action  or  proceeding  which is
                  referred to in clause (i) above is brought in an  inconvenient
                  forum,  that the venue of such suit,  action or  proceeding is
                  improper,  or that this Agreement or the subject matter hereof
                  or any of the  transactions  contemplated  hereby  may  not be
                  enforced in or by these courts.  The Seller hereby  designates
                  and appoints CT Corporation, New York City offices, to receive
                  for and on its behalf  service  of  process in any  proceeding
                  with  respect  to  any  matter  as  to  which  it  submits  to
                  jurisdiction  as set forth above, it being agreed that service
                  on CT Corporation will constitute valid service on the Seller.
                  The Buyer hereby  generally  consents to service of process by
                  registered mail, return receipt requested,  at its address for
                  notice under this Agreement.

                  THE  PARTIES   HEREBY  ALSO  AGREE  THAT  THE  UNITED  NATIONS
                  CONVENTION  ON CONTRACTS FOR THE  INTERNATIONAL  SALE OF GOODS
                  WILL NOT APPLY TO THIS TRANSACTION.

22.5              Confidentiality and Disclosure

22.5.1            Subject  to  any  legal  or   governmental   requirements   of
                  disclosure,  the parties  (which for this purpose will include
                  their  employees  and  agents)  will  maintain  the  terms and
                  conditions  of this  Agreement  and any reports or other data,
                  including  Technical Data and Documentation (the "Confidential
                  Material"), furnished hereunder strictly confidential.

22.5.2            Without limiting the generality of the foregoing, the  Buyer *
                  limit the disclosure  of  the  Confidential  Material  to  the
                  extent legally permissible in any filing required to  be  made
                  by the Buyer with any governmental agency and will  make  such
                  applications as will be reasonably necessary to implement  the
                  foregoing.  With respect to any public disclosure  or  filing,
                  the  Buyer  agrees  to  submit to  the  Seller  a  copy of the
                  document proposed to be filed  or  disclosed.  The Buyer  will
                  give the Seller a reasonable period of time in which to review
                  the said document, and will consult with the Seller before the
                  making of any such public disclosure or filing.



22.5.3            The Buyer may disclose the Technical Data and Documentation to
                  parties providing  maintenance of the Aircraft,  provided that
                  the Buyer  causes any such  maintenance  provider to execute a
                  confidentiality  agreement  containing,  at a  minimum,  terms
                  substantially  the same in scope  and  effect  as the terms in
                  Exhibit I hereto.

22.5.4            Notwithstanding any other provision of this  Clause 22.5,  the
                  Buyer will be permitted to  disclose the Confidential Material
                  without the Seller's consent



                  (i)      to its professional advisors,



                  (ii)     *



                  (iii)    *



                  (iv)     where  necessary,  and o nly to the extent necessary,
                           for the Buyer to prosecute, or defend  itself  in,  a
                           legal action to which the Buyer may become  a  party,
                           and

                  (v)      to the extent that such Confidential Information:

                           (a)   becomes generally available to the public other
                                 than  as  a  result  of  a  violation  of  this
                                 Agreement;

                           (b)   was   available   to   the    Buyer   on      a
                                 non-confidential basis prior to its  disclosure
                                 hereunder;

                           (c)   becomes  available  on a non-confidential basis
                                 from a third party source  under  circumstances
                                 reasonably believed by the Buyer not to violate
                                 this or any other confidentiality agreement.

22.5.5            The  provisions  of   this   Clause  22.5  will  survive   any
                  termination of this Agreement.

22.6              Severability

                  In the event that any provision of this  Agreement  should for
                  any reason be held to be without effect, the remainder of this
                  Agreement will remain in full force and effect.  To the extent
                  permitted by  applicable  law, each party hereto hereby waives
                  any  provision  of law which  renders  any  provision  of this
                  Agreement prohibited or unenforceable in any respect.

22.7              Alterations to Contract

                  This   Agreement,   including  its  Exhibits  and  Appendixes,
                  contains the entire agreement between the parties with respect
                  to the subject  matter hereof and thereof and  supersedes  any
                  previous   understanding,   commitments   or   representations
                  whatsoever,  whether oral or written.  This Agreement will not
                  be varied  except by an  instrument  in  writing  of even date
                  herewith or subsequent  hereto  executed by both parties or by
                  their fully authorized representatives.

22.8              Inconsistencies

                  In the event of any  inconsistency  between  the terms of this
                  Agreement   and  the  terms   contained   in  either  (i)  the
                  Specification annexed in Exhibit A-1 or Exhibit A-2 hereto, or
                  (ii) any other Exhibit hereto,  in each such case the terms of
                  this   Agreement   will   prevail   over  the   terms  of  the
                  Specification or any other Exhibit hereto.  For the purpose of
                  this  Clause  22.8,  the term  Agreement  will not include the
                  Specification or any other Exhibit hereto.

22.9              Language

                  All correspondence, documents and any other written matters in
                  connection with this Agreement will be in English.

22.10             Headings

                  All  headings  in  this  Agreement  are  for   convenience  of
                  reference only and do not constitute a part of this Agreement.

22.11             Counterparts

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


<PAGE>


23.               CERTAIN REPRESENTATIONS OF THE PARTIES

23.1.             Buyer's Representations

                  The Buyer represents and warrants to the Seller:

                  (i)      the Buyer is a corporation  organized and existing in
                           good standing under the laws of the State of Colorado
                           and has the  corporate  power and  authority to enter
                           into  and   perform   its   obligations   under  this
                           Agreement;

                  (ii)     neither the  execution  and  delivery by the Buyer of
                           this  Agreement,  nor the  consummation of any of the
                           transactions by the Buyer contemplated  thereby,  nor
                           the  performance  by the  Buyer  of  the  obligations
                           hereunder,  constitutes  a breach of any agreement to
                           which the Buyer is a party or by which its assets are
                           bound;

                  (iii)    this Agreement has been duly authorized, executed and
                           delivered  by the Buyer and  constitutes  the  legal,
                           valid and binding obligation of the Buyer enforceable
                           against the Buyer in accordance with its terms.

23.2              Seller's Representations

                  The Seller represents and warrants to the Buyer:

                  (i)      the  Seller  is a societe  a  responsabilite  limitee
                           organized  and  existing in good  standing  under the
                           laws of the Republic of France and has the  corporate
                           power and  authority  to enter into and  perform  its
                           obligations under the Agreement;

                  (ii)     neither the  execution  and delivery by the Seller of
                           this  Agreement,  nor the  consummation of any of the
                           transactions by the Seller contemplated  thereby, nor
                           the  performance  by the  Seller  of the  obligations
                           hereunder,  constitutes  a breach of any agreement to
                           which the  Seller  is a party or by which its  assets
                           are bound;

                  (iii)    this Agreement has been duly authorized, executed and
                           delivered  by the Seller and  constitutes  the legal,
                           valid   and   binding   obligation   of  the   Seller
                           enforceable against the Seller in accordance with its
                           terms.


<PAGE>



IN WITNESS  WHEREOF,  these  presents  were  entered into as of the day and year
first above written.

                           AVSA, S.A.R.L.


                           By: ________________________

                           Title:



                           FRONTIER AIRLINES, INC.



                           By: __________________________

                           Title:





                                                                     EXHIBIT A-1


The A318 Standard Specification is contained in a separate folder.

                                                       APPENDIX 1 TO EXHIBIT A-1


SCNs for the A318 Aircraft.





 Reference Subject                                                       Price
                                                                       US$ 1/99


 CN25.11.208 Second Observer                                           $*
 CN31.14.103 Overhead Panel toggle switch re-orientation               $*
 CN32.40.103 Brake Cooling Fans                                        $*
 CN34.41.200 Weather radar with predictive windshear                   $*
             (forward looking)
 CN35.11.201 Crew Oxygen Cylinder115 cubic feet                        $*
 GN25.33.051 Install G5 full-width galley                              $*
 GN25.43.450 Delete Lavatory LF                                        $*
 GN25.43.200 Install Lavatory LD                                       $*
 GN25.43.220 Install Lavatory LE                                       $*

                                                                        $*






                                                                     EXHIBIT A-2


The A319 Standard Specification is contained in a separate folder.

                                                       APPENDIX 1 TO EXHIBIT A-2

SCNs for the A319 Aircraft.



Reference Subject                                                        Price
                                                                       US$ 1/99


CN25.11.208 Second Observer                                             $*
CN31.14.103 Overhead Panel toggle switch re-orientation                 $*
CN32.40.103 Brake Cooling Fans                                          $*
CN34.41.200 Weather radar with predictive windshear                     $*
            (forward looking)
CN35.11.201 Crew Oxygen Cylinder115 cubic feet                          $*
GN25.33.051 Install G5 full-width galley                                $*
GN25.43.450 Delete Lavatory LF                                          $*
GN25.43.220 Install Lavatory LE                                         $*

                                                                        $*







                                                                       EXHIBIT B



                          AVSA                              SCN No.
               SPECIFICATION CHANGE NOTICE                  Issue
                          (SCN)                             Dated
                                                            Page No.


TITLE

DESCRIPTION

EFFECT ON WEIGHT
----------------
Manufacturer's Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:


REMARKS/REFERENCES

Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)
------------------------------------------------------------------------

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS:

This change will be effective on        Aircraft No.             and  subsequent
provided approval is received by                .


BUYER APPROVAL                                        SELLER APPROVAL
--------------                                        ---------------

By:                                                   By:

Title: (Authorized Finance Department Officer)        Date:

By:

Title:  (Authorized maintenance or flight operations officer)

Date:




                          AVSA                              SCN No.
               SPECIFICATION CHANGE NOTICE                  Issue
                          (SCN)                             Dated
                                                            Page No.


SCOPE OF CHANGE  (FOR INFORMATION ONLY)












                                                                       EXHIBIT C

                           SELLER SERVICE LIFE POLICY

1.            The  Items  of primary and auxiliary structure described hereunder
              are covered by the Service Life Policy described in Subclause 12.2
              of the Agreement.

2.            WINGS - CENTER AND OUTER WING BOX
              ---------------------------------

2.1           Spars

2.2           Ribs Inside the Wing Box

2.3           Upper and Lower Panels of the Wing Box
              --------------------------------------

2.4           Fittings

2.4.1         Attachment fittings for the flap structure

2.4.2         Attachment fittings for the engine pylons

2.4.3         Attachment fittings for the main landing gear

2.4.4         Attachment fittings for the center wing box

2.5           Auxiliary Support Structure

2.5.1         For the slats:
              -------------

2.5.1.1       Ribs supporting the track rollers on wing box structure

2.5.1.2       Ribs supporting the actuators on wing box structure

2.5.2         For the ailerons:
              ----------------

2.5.2.1       Hinge brackets and ribs on wing box rear spar or shroud box

2.5.2.2       Actuator fittings on wing box rear spar or shroud box

2.5.3         For airbrakes, spoilers, lift dumpers:
              -------------------------------------

2.5.3.1       Hinge brackets and ribs on wing box rear spar or shroud box

2.5.3.2       Actuator fittings on wing box rear spar or shroud box

3.            FUSELAGE

3.1           Fuselage Structure

3.1.1         Fore and aft bulkheads

3.1.2         Pressurized  floors  and  bulkheads  surrounding the main and nose
              gear wheel well and center wing box

3.1.3         Skins  with  doublers,  stringers  and  frames  from  the  forward
              pressure bulkheads to the frame  supporting the rear attachment of
              horizontal stabilizer

3.1.4         Window and windscreen attachment structure but excluding
              transparencies

3.1.5         Passenger and cargo doors internal structure

3.1.6         Sills excluding scuff plates and upper beams surrounding passenger
              and cargo door apertures

3.1.7         Cockpit floor structure and passenger cabin floor beams  excluding
              floor panels and seat rails

3.1.8         Keel beam structure

3.2           Fittings

3.2.1         Landing gear attachment fittings

3.2.2         Support  structure  and  attachment  fittings for the vertical and
              horizontal stabilizers

4.            STABILIZERS

4.1           Horizontal Stabilizer Main Structural Box

4.1.1         Spars

4.1.2         Ribs

4.1.3         Upper and lower skins and stringers

4.1.4         Attachment fittings to fuselage and trim screw actuator

4.1.5         Elevator support structure

4.1.5.1       Hinge bracket

4.1.5.2       Servocontrol attachment brackets

4.2           Vertical Stabilizer Main Structural Box

4.2.1         Spars

4.2.2         Ribs

4.2.3         Skins and stringers

4.2.4         Attachment fittings to fuselage

4.2.5         Rudder support structure

4.2.5.1       Hinge brackets

4.2.5.2       Servocontrol attachment brackets

5.            Bearing and roller assemblies,  bearing surfaces, bushings, bolts,
              rivets,  access and  inspection  doors,  including  manhole doors,
              latching  mechanisms,  all system components,  commercial interior
              parts,  insulation and related installation and connecting devices
              are excluded from this Seller Service Life Policy.

                                                                       EXHIBIT D

                            CERTIFICATE OF ACCEPTANCE

                                for A318 Aircraft

In accordance with the terms of that certain A318/A319  Purchase Agreement dated
as of March 10, 2000,  between Frontier Airlines,  Inc.,  ("FRONTIER") and AVSA,
S.A.R.L.  ("AVSA") (the "Purchase Agreement"),  the Technical Acceptance Process
relating to the Airbus A318 aircraft,  Manufacturer's Serial Number: _____, U.S.
Registration  Number:  ______  with  two (2)  Pratt  &  Whitney  PW 6124  series
propulsion  systems  installed  thereon,  serial nos.  ______  (position #1) and
_______ (position #2) (the "A318 Aircraft"),  has taken place at _______________
on the ____ day of _____________, ____.

In view of said  Technical  Acceptance  Process  having  been  carried  out with
satisfactory  results,  FRONTIER  hereby  approves the A318 Aircraft as being in
conformity with the provisions of the Purchase Agreement.

Said  acceptance  does not affect the rights of  FRONTIER  under the  warranties
relating to the A318 Aircraft set forth in the Purchase Agreement.

FRONTIER specifically recognizes that it has waived any right it may have at law
or otherwise to revoke this acceptance of the A318 Aircraft.

                           RECEIPT AND ACCEPTANCE OF THE ABOVE-DESCRIBED A318
                           AIRCRAFT ACKNOWLEDGED

                           FRONTIER AIRLINES, INC.


                           By: __________________________

                           Its: __________________________


<PAGE>


                            CERTIFICATE OF ACCEPTANCE

                                for A319 Aircraft

In accordance with the terms of that certain A318/A319  Purchase Agreement dated
as of March 10, 2000,  between Frontier Airlines,  Inc.,  ("FRONTIER") and AVSA,
S.A.R.L.  ("AVSA") (the "Purchase Agreement"),  the Technical Acceptance Process
relating to the Airbus A319 aircraft,  Manufacturer's Serial Number: _____, U.S.
Registration  Number:  ______  with two (2) CFM  International  56-5B5\P  series
propulsion  systems  installed  thereon,  serial nos.  ______  (position #1) and
_______ (position #2) (the "A319 Aircraft"),  has taken place at _______________
on the ____ day of _____________, ____.

In view of said  Technical  Acceptance  Process  having  been  carried  out with
satisfactory  results,  FRONTIER  hereby  approves the A319 Aircraft as being in
conformity with the provisions of the Purchase Agreement.

Said  acceptance  does not affect the rights of  FRONTIER  under the  warranties
relating to the A319 Aircraft set forth in the Purchase Agreement.

FRONTIER specifically recognizes that it has waived any right it may have at law
or otherwise to revoke this acceptance of the A319 Aircraft.

                           ECEIPT AND ACCEPTANCE OF THE ABOVE-DESCRIBED A319
                           AIRCRAFT ACKNOWLEDGED

                           FRONTIER AIRLINES, INC.


                           By: __________________________

                           Its: __________________________




                                                                       EXHIBIT E

                                  BILL OF SALE

                                for A318 Aircraft

Know all persons by these  presents that AVSA,  S.A.R.L.  ("AVSA"),  a societe a
responsabilite  limitee organized and existing under the laws of the Republic of
France,whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE, is
the owner of the title to the following airframe (the "Airframe"),  the attached
engines as specified (the  "Engines")  and all  appliances,  components,  parts,
instruments,  accessories,  furnishings,  modules  and  other  equipment  of any
nature,  excluding Buyer Furnished Equipment,  incorporated  therein,  installed
thereon or attached thereto on the date hereof (the "Parts"):

MANUFACTURER OF AIRFRAME:           MANUFACTURER OF ENGINES:
------------------------            -----------------------

AIRBUS INDUSTRIE G.I.E.             PRATT & WHITNEY

MODEL:   A318-100                   MODEL:   PW 6124
-----                               -----

MANUFACTURER'S                      SERIAL NUMBERS:
--------------                      --------------

SERIAL NUMBER:     [        ]       LH :     [        ]
-------------
                                    RH :     [        ]
REGISTRATION NO:  [        ]
---------------


The  Airframe,  Engines  and Parts are  hereafter  together  referred  to as the
aircraft (the "Aircraft").

AVSA does this ___ day of _______________  sell, transfer and deliver all of its
above  described  rights,  title and interest to the  Aircraft to the  following
company and its successors and assigns forever, said Aircraft to be the property
thereof:

                       -----------------------------------
                                  (the "Buyer")

AVSA hereby  warrants to the Buyer,  its successors and assigns that AVSA has on
the date hereof good and lawful right to sell, deliver and transfer title to the
Aircraft to the Buyer and that there is hereby conveyed to the Buyer on the date
hereof good, legal and valid title to the Aircraft, free and clear of all liens,
claims,  charges,  encumbrances  and rights of others  and that the Seller  will
warrant and defend such title forever against all claims and demands whatsoever.

THIS BILL OF SALE WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE  THEREOF
WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING  EFFECT TO ITS  CONFLICTS  OF LAWS  PROVISIONS  THAT WOULD  RESULT IN THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by
its duly authorized representative this ______ day of [ ]


AVSA, S.A.R.L.

By:

Title:

Signature:


<PAGE>



                                  BILL OF SALE

                                for A319 Aircraft

Know all persons by these  presents that AVSA,  S.A.R.L.  ("AVSA"),  a societe a
responsabilite  limitee organized and existing under the laws of the Republic of
France,whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE, is
the owner of the title to the following airframe (the "Airframe"),  the attached
engines as specified (the  "Engines")  and all  appliances,  components,  parts,
instruments,  accessories,  furnishings,  modules  and  other  equipment  of any
nature,  excluding Buyer Furnished Equipment,  incorporated  therein,  installed
thereon or attached thereto on the date hereof (the "Parts"):

MANUFACTURER OF AIRFRAME:           MANUFACTURER OF ENGINES:
------------------------            -----------------------

AIRBUS INDUSTRIE G.I.E.             CFM INTERNATIONAL

MODEL:   A319-100                   MODEL:   CFM 56-5B5\P
-----                               -----

MANUFACTURER'S                      SERIAL NUMBERS:
--------------                      --------------
SERIAL NUMBER:    [        ]        LH :     [        ]
-------------
                                    RH :     [        ]
REGISTRATION NO:  [        ]
---------------

The  Airframe,  Engines  and Parts are  hereafter  together  referred  to as the
aircraft (the "Aircraft").

AVSA does this ___ day of _______________  sell, transfer and deliver all of its
above  described  rights,  title and interest to the  Aircraft to the  following
company and its successors and assigns forever, said Aircraft to be the property
thereof:

                       -----------------------------------
                                  (the "Buyer")

AVSA hereby  warrants to the Buyer,  its successors and assigns that AVSA has on
the date hereof good and lawful right to sell, deliver and transfer title to the
Aircraft to the Buyer and that there is hereby conveyed to the Buyer on the date
hereof good, legal and valid title to the Aircraft, free and clear of all liens,
claims,  charges,  encumbrances  and rights of others  and that the Seller  will
warrant and defend such title forever against all claims and demands whatsoever.

THIS BILL OF SALE WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE  THEREOF
WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING  EFFECT TO ITS  CONFLICTS  OF LAWS  PROVISIONS  THAT WOULD  RESULT IN THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by
its duly authorized representative this ______ day of [ ]

AVSA, S.A.R.L.

By:

Title:

Signature:


                                                                       EXHIBIT F

                        TECHNICAL DATA AND DOCUMENTATION

                                     GENERAL

         This Exhibit F lists the form,  type,  quantity and delivery  dates for
         the  Technical  Data and  Documentation  to be  provided  to the  Buyer
         pursuant to Clause 14 of the Agreement.

         The Technical Data and  Documentation  are published in accordance with
         ATA  Specification  100  revision  23,  with the  exception  of certain
         Component  Maintenance  Manuals,   which  may  be  written  to  an  ATA
         Specification 100 revision other than revision 23.

         The  designation  "C"  after  the  title  of  a  Technical  Publication
         indicates that such Technical Publication may be customized.


<PAGE>


                                                                       EXHIBIT F


1.       ENGINEERING DOCUMENTS

1.1      Installation and Assembly Drawings (IAD)--C

         The IAD will be  delivered  according  to the Buyer's  standard for the
         major Assembly and Installation drawings, including detail drawings.

1.2      Drawing Number Index (DNI)--C

         The DNI lists applicable  drawings of the Aircraft  delivered under the
         Agreement.

1.3      Process and Material Specification (PMS)

         The PMS contains  data  related to  manufacturing  processes,  material
         identification  and treatments used in the construction and assembly of
         the Aircraft.

1.4      Standards Manual (SM)

         The SM contains data about Seller approved standards and includes cross
         reference lists. The SM will include US  standards/equivalents  for all
         hardware clamps, O-rings, bearings,  fasteners,  sealants, adhesive and
         compounds, raw materials, processes and procedures.

2.       MAINTENANCE AND ASSOCIATED MANUALS

2.1      APU Build-up Manual (ABM)

         The ABM follows the format adopted for the Power Plant Build-up Manual.

2.2      Aircraft Maintenance Manual (AMM)--C

         The component  location  section of the AMM will show those  components
         detailed in the AMM maintenance procedures. The troubleshooting part is
         covered in Subparagraph 2.21 below.

         *Aircraft  Maintenance  Manual  Chapter 05 Time  Limits  (Service  Life
         Limits) and Maintenance Checks are only delivered in hard copies.


<PAGE>


                                                                       EXHIBIT F

2.3      Aircraft Schematics Manual (ASM)--C

         The ASM is part of the Wiring Manual. Supplied as a separate manual for
         schematics.

2.4      Aircraft Wiring Manual (AWM)--C

         The AWM is part of the Wiring Manual. Supplied as a separate manual for
         wirings.

2.5      Aircraft Wiring Lists (AWL)--C

         The AWL is part of the Wiring Manual.  Supplied as a separate  document
         for lists.  The AWL includes wire  terminations,  connector,  terminal,
         strip locations, wire routings, and clamping diagrams.

2.6      Consumable Material List (CML)

         The CML details the  characteristics  and gives procurement  sources of
         consumable materials such as grease, oil, etc.

2.7      Duct Repair Manual (DRM)

         The DRM contains all the data  necessary  to locate,  identify,  repair
         and/or  replace  sub-assemblies  of metallic  ducts.  It also  includes
         details of tests necessary after repair.

2.8      Fuel Pipe Repair Manual (FPRM)

         The FPRM provides workshop repair procedures and data for specific fuel
         pipes,  after removal from any aircraft of the Manufacturer of the type
         of the Aircraft.

2.9      Illustrated Parts Catalog (IPC)--C

         The IPC identifies and illustrates all line replaceable parts and units
         of the aircraft, excluding the power plant parts.

2.10     Illustrated Parts Catalog (power plant) (PPIPC)--C

         The PPIPC covers line  replaceable  parts and units of the power plant,
         provided by the Propulsion Systems manufacturer.

2.11     Illustrated Tool and Equipment Manual (TEM)

         The TEM provides  information  on Ground  Equipment and Tools listed in
         the Seller's Aircraft Maintenance Manual.

2.12     Maintenance Facility Planning (MFP)

         The  MFP  provides  information  that  will  assist  airline  personnel
         concerned  with  long term  planning  of ramp or  terminal  operations,
         Aircraft  maintenance  on the  ramp  and in the  hangar,  overhaul  and
         testing of structure and system components.

2.13     Maintenance Planning Document (MPD)

         The  MPD  provides  maintenance  data  necessary  to plan  and  conduct
         Aircraft maintenance checks and inspections.

2.14     Power Plant Build-up Manual (PPBM)

         The PPBM provides  instructions  for the installation of a quick engine
         change kit on a bare engine.

2.15     Support Equipment Summary (SES)

         The  SES  lists  support  equipment  recommended  by  the  Seller,  the
         Propulsion Systems manufacturer and Vendors.

2.16     Time  Limits  and  Maintenance  Checks/Service  Limits  and Maintenance
         Checks  (TLMC\SLMC)

         The  TLMC\SLMC   document  provides  the   Manufacturer's   recommended
         scheduled time limits for inspections and maintenance checks.

2.17     Tool\Equipment Drawings (TED)

         TEDs will be supplied in the form of aperture cards for the Seller and,
         when available, Vendor maintenance tools.


<PAGE>


2.18     Tool and Equipment Drawing Index (TEI)

         The TEI is an alpha-numeric listing of the TED's.

2.19     Tool and Equipment Bulletin (TEB)

         The  TEB  provides  advance  information  related  to  tools  and  test
         equipment development.

2.20     Trouble Shooting Manual (TSM)--C

         The TSM complements the CFDS and provides  trouble-shooting data in the
         following three levels:

         Level 1 -         Aimed  at  line  use.  Fault  isolation  guidance for
                           systems or parts of systems monitored mainly by CFDS.
                           Also guidance for systems not monitored by CFDS.

         Level 2 -         Aimed  at  hangar  use.  Fault isolation guidance for
                           non-CFDS  monitored systems in the form of functional
                           block diagrams, charts and tables.

         Level 3 -         Aimed  at  engineering   use.  List  of CFDS messages
                           and  decoding of  troubleshooting  data  (decoding of
                           coded  messages  provided  by the  CFDS).  Level 3 is
                           supplied on floppy disk.

3.       MISCELLANEOUS DOCUMENTATION

3.1      Airplane Characteristics for Airport Planning (AC)

         The AC will be in general accordance with Specification NAS 3601.

3.2      Aircraft Recovery Manual (ARM)

         The ARM provides the  following  planning  information:  preparing  and
         moving a disabled aircraft that may be obstructing airport traffic.

3.3      Cargo Loading System Manual (CLS)

         The CLS details handling procedures for the Cargo Loading System.

3.4      Crash Crew Chart (CCC)

         The  CCC  provides  information   concerning  access  to  the  Aircraft
         interior, location of safety equipment, hazardous liquids, etc.

3.5      Guidelines for Customer Originated Changes (GCOC)

         The  GCOC  provides  production  and  presentation  rules  for the data
         covering Buyer originated changes on the Aircraft to be incorporated by
         the Seller in the  Technical  Data and  Documentation  as per Subclause
         14.11 of the Agreement.

3.6      List of Radioactive and Hazardous Elements (LRE)

         The LRE provides  information  on  components  and  materials for which
         specific precautions have to be taken.

3.7      List of Applicable Publications (LAP)--C

         The LAP will record the Seller's  various  Airframe  Technical Data and
         Documentation indicating the last valid revision number and issue date.

3.8      Livestock Transportation Manual (LTM)

         The LTM details the facilities,  equipment and procedures necessary for
         live animal  transportation in aircraft of the Manufacturer of the type
         of the Aircraft.

3.9      Service Bulletins (SB)--C

         The  Buyer  will  receive  all  Service  Bulletins  applicable  to  the
         Aircraft.

3.10     Service Bulletin Index (SBI)

         The SBI is a listing of all Service Bulletins issued in ATA 100 chapter
         sequence.

         The  SBI  provides   details  of  SB  number,   SB  title,   associated
         modification number, issue status, Vendor SB number (if applicable) and
         affected fleet.

3.11     Service Information Letters (SIL)

         SILs give  information of a general nature and also about minor changes
         or inspections the Buyer may wish to apply under the Buyer's authority.


<PAGE>




3.12     Transportability Manual (TM)

         The TM gives  cargo  hold  dimensions  for  currently  available  cargo
         Aircraft,   transportation   information  and  requirements  for  large
         Aircraft  components.  Component  dimensions,  weights  and shelf  life
         limitations are also given.

3.13     Supplier Product Support Agreements (SPSA)

         The SPSA is a collection of product  support  conditions  negotiated by
         the Manufacturer with the suppliers of Aircraft equipment.

3.14     Vendor Information Manual (VIM)

         The VIM provides Vendor contact information.

3.15     Vendor Information Manual (GSE) (VIM/GSE)

         The  VIM/GSE  gives  contact  names and  addresses  of  Ground  Support
         Equipment (GSE) vendors and their product support organizations.

4.       OPERATIONAL MANUALS

4.1      Abnormal\Emergency Check List\Quick Reference Handbook  (CL\QRH)--C

         The CL is an extract  from the FCOM  presented  as a booklet  for quick
         in-flight use.

4.2      FAA Approved Flight Manual (FM)--C

         The AFM provides Aircraft performance  operating  limitations and other
         flight data  required by the  relevant  Airworthiness  Authorities  for
         certification. It includes the Configuration Deviation List (CDL).

4.3      Flight Crew Operating Manual (FCOM)--C

         The FCOM provides Aircraft and systems descriptions,  normal,  abnormal
         and emergency procedures as well as operational performance.


<PAGE>


4.4      Master Minimum Equipment List (MMEL)

         The MMEL defines the components and the related conditions under which,
         when the  components  are  defective,  the  Aircraft may be cleared for
         flight.  In addition,  the MMEL provides the necessary  information  to
         establish the Buyer's own Minimum Equipment List (MEL).

4.5      Performance Engineering Program (PEP)

         The PEP consists of a Low Speed  Performance data base and a High Speed
         Performance  data base together  with their  respective  programs.  The
         Performance  Engineering  Program  may be used by the  Buyer  under the
         license conditions set forth in Appendix A to this Exhibit F.

         The Low Speed Performance  programs consist of the Take-off and Landing
         Chart computation program (TLC) which permits the computation of:

         - regulatory take-off and landing performance,

         -  noncertified  take-off  performance  accounting  for runway data and
         weather,  together with the Tabulation and Interpolation program (TAB),
         issued  with  the  AFM,   which   permits  the  reading,   editing  and
         interpolation of the tables listed in the AFM.

         The High  Speed  Performance  programs  are the In  Flight  Performance
         computation   program  (IFP)  which  permits  computation  of  Aircraft
         performance  for  each  flight  phase  and  the  Aircraft   Performance
         Monitoring  program  (APM) which  permits  analysis of Aircraft  cruise
         performance from data recorded during stabilized flight periods.

4.6      Performance Program Manual (PPM)

         The PPM is the users'  guide for the  Performance  Engineering  Program
         (PEP).

4.7      Weight and Balance Manual (WBM) and

         Weight and Balance Manual Supplements--C

         The corresponding supplements:
         -Delivery Weighing Report,
         -Equipment List,
         will be delivered with each Aircraft.



<PAGE>


5.       OVERHAUL DATA

5.1      Cable Fabrication Manual (CFM)

         The  CFM  contains  all  the  data   necessary  to  locate,   identify,
         manufacture  and test control cables used on the Aircraft.  An appendix
         contains  cable  end  fitting   specification   sheets,   and  detailed
         manufacturing instructions.

5.2      Component Documentation Status (CDS)--C

         The  CDS  lists  Component   Maintenance  Manuals  in  accordance  with
         Subparagraphs 5.4 and 5.5 below.

5.3      Component Evolution List (CEL)

         The CEL is a  noncustomized  document  listing  all  components  on the
         Aircraft and also gives the evolution of each component.

         The information is provided in order of:
         - part number
         - FSCM
         - ATA reference.

5.4      Component Maintenance Manual Manufacturer (CMMM)

         The CMMM  contains  all the data  necessary  to  locate,  identify  and
         maintain Aircraft components manufactured by the Seller.

5.5      Component Maintenance Manual Vendor (CMMV)

         The Seller will ensure that each Vendor of repairable  components  will
         deliver  to  the  Buyer a  Component  Maintenance  Manual  Vendor  with
         revision service.

6.       STRUCTURAL MANUALS

6.1      Nondestructive Testing Manual (NTM)

         The NTM supplies  Airframe data  necessary to carry out  nondestructive
         testing.


<PAGE>



6.2      Structural Repair Manual (SRM)

         The SRM contains descriptive  information for identification and repair
         of the  Airframe  primary  and  secondary  structure  and will  include
         substantial structural analysis.

                                      FORM

AC       APERTURE CARD.  Refers to 35mm film contained on punched aperture cards

CD       CD-ROM.

D        FLOPPY DISK

F        MICROFILM.  Refers to 16mm roll film in 3M type cartridges.

MP       Refers to paper  printed one side,  unpunched  quality will be suitable
         for further reproduction or microfilming.

MT       MAGNETIC TAPE

P1       PRINTED ONE SIDE.  Refers to manuals in paper with print on one side of
         the sheets only.

P2       PRINTED BOTH SIDES.  Refers to manuals with print on both sides of  the
         sheets.

SMF      SILVER MASTER FILM.   Refers  to  thick diazo film suitable for further
         reproduction.

+        Denotes a combined A319/A320/A321 Technical Publication.

*        Denotes  Technical  Data and  Documentation  will be  supplied  in SGML
         format if such format becomes available from the Manufacturer.

                                      TYPE

C        CUSTOMIZED.  Refers to manuals which are customized to specific MSNs.

E        ENVELOPE.  Refers to manuals which are not customized.

P        PRELIMINARY Refers to preliminary data or manuals which may consist of:

         -either one time issue not maintained by revision service, or

         -preliminary  issues  maintained by revision service until final manual
         or data delivery, or

         -supply of best  available  data under final  format  with  progressive
         completion through revision service.


<PAGE>




                                    DELIVERY

Delivery of Technical Data and  Documentation  is expressed either as the number
of days prior to delivery of the first Aircraft or as nil (0), which  designates
the date of delivery of the first Aircraft.

It is agreed  that the number of days  indicated  will be rounded up to the next
regular revision release date.

MANUALS AVAILABLE (headlines)

1 - ENGINEERING DOCUMENTS
2 - MAINTENANCE & ASSOCIATED MANUALS
3 - MISCELLANEOUS PUBLICATIONS
4 - OPERATIONAL MANUALS AND DATA
5 - OVERHAUL DATA
6 - STRUCTURAL MANUALS


<PAGE>


                                                                     EXHIBIT "F"



    MANUALS AVAILABLE (detailed)               Abbr  Form  Type  Qty. Rev Deliv.
                                               ----  ----  ----  ---- --- ------

    1.     ENGINEERING DOCUMENTS

    +*     Installation and Assembly Drawings  IAD         C          AN1  0
           (including detail drawings)

    +      Parts Usage (Effectivity)           PU          E          AN   0

    +      Schedule (Drawing Nomenclature)     S           E          AN   0
    *

    +      Drawing Number Index                DNI         C          AN   0

    +      Process and Material Specification  PMS         E          AN   0
    *

    +      Standards Manual                    SM          E          AN   0

    +      Electrical Load Analysis            ELA         E     2    AN   0


<PAGE>



    2.     MAINTENANCE & ASSOCIATED MANUALS

    +      APU Build-up Manual                 ABM         E          AN   90

    +      Aircraft Maintenance Manual         AMM         C          4    90

    +      Aircraft Schematics Manual          ASM         C          4    90

    +      Aircraft Wiring Manual              AWM         C          4    90

    +      Aircraft Wiring Lists               AWL         C          4    90

    +      Consumable Material List            CML         E          AN   90

    +      Component Location Manual           CLM                    4    90

    +      Duct Repair Manual                  DRM         E          AN   90

    +      Fuel Pipe Repair Manual             FPRM        E          AN   90

    +      Illustrated Parts Catalog           IPC         C          4    90
           (Airframe)

    +      Illustrated Parts Catalog           PIPC        C          4    90
           (Power Plant)2

    +      Illustrated Tool and Equipment      TEM         E          AN   360
    *      Manual

    +      Maintenance Facility Planning       MFP         E          AN   90

    +      Maintenance Planning Document       MPD         E          AN   360
    *

    +      Power Plant Build-up Manual 3       PPBM        E          AN   90

    +      Support Equipment Summary           SES         E          AN   360

    +      Time Limits and Maintenance         TLMC/       C          4    90
           Checks/Service Limits and           SLMC
           Maintenace Checks

    +      Tool and Equipment Drawings         TED         E          AN   360

    +      Tool and Equipment Drawing Index    TEI         E          AN   360
    *

    +      Trouble Shooting Manual             TSM         C          4    90

    +      Aircraft Documentation  Retrieval   ADRES       C          4    90
    *      System

    +      Computer Assisted Aircraft          CAATS       C          4    90
    *      Troubleshooting

    +      Time Limits and Maintenance Checks  TLMC        C          4    90

<PAGE>


    3.     MISCELLANEOUS PUBLICATIONS

    +      Airplane Characteristics for        AC          E          AN   360
    *      Airport Planning

    +      Aircraft Recovery Manual            ARM         E          AN   90

           Crash Crew Chart                    CCC         E          AN   180

    +      Guidelines for Customer Originated  GCOC        E          AN   0
           Changes

    +      List of Radioactive and Hazardous   LRE         E          AN   90
           Elements

    +      List of Applicable Publications     LAP         C          4    90

    +      Livestock Transportation Manual     LTM         E          AN   90

    +      Service Bulletins                   SB          C          AN   0

    +      Service Bulletin Index              SBI         E          AN   90

    +      Service Information Letters         SIL         E          AN   0

    +      Technical Publications Combined     TPCI        C          AN   90
    *      Index

    +      Transportability Manual             TM          E          AN   90

           Supplier Product Support Agreements SPSA        E          AN   360
           (SPSA)

    *      Vendor Information Manual           VIM         E          AN   360

    +      Vendor Information Manual GSE       VIM\        E          AN   360
    *                                          GSE




<PAGE>

    4.     OPERATIONAL MANUALS AND DATA

    +      Check List/Abnormal/Emergency/      CL/QRH      C          AN   90
           Quick Reference Handbook

    +      FAA Approved Flight Manual          AFM         C          AN   0

    +      Flight Crew Operating Manual        FCOM        C          AN   90

    +      Master Minimum Equipment List       MMEL        E          AN   90

    +      Performance Engineering Program     PEP         E          AN   90

    +      Performance Program Manual          PPM         E          AN   90

    +      Weight and Balance Manual           WBM         C          AN   0


<PAGE>

    5.     OVERHAUL DATA

    +      Cable Fabrication Manual            CFM         E          AN   90

    +      Component Documentation Status      CDS         C          AN   180
    *

    +      Component Evolution List4           CEL         E          AN   180

    +      Component Maintenance Manual        CMMM        E          AN   180
    *      Airframe Manufacturer

    +      Component Maintenance Manual Vendor CMMV  P2    E     10   AN   180
    *


<PAGE>





    6.     STRUCTURAL MANUALS

    +      Nondestructive Testing Manual       NTM         E     4         90

    +      Structural Repair Manual            SRM         E     4         90




<PAGE>



                                                         APPENDIX 1 TO EXHIBIT F


             LICENSE FOR USE OF THE PERFORMANCE ENGINEER'S PROGRAMS

1.       Grant

         The Seller grants the Buyer the right to use the Performance Engineer's
         Program  (PEP)  in   machine-readable   form  during  the  term of this
         license on a single computer.

         Use of the PEP in  readable  form will be limited to one (1) copy other
         than the copies  contained in the single  computer and copies  produced
         for checkpoint and restart purposes or additional  copies made with the
         consent of the Seller for a specific need.

2.       Merging

         The  PEP may be used  and  adapted  in  machine-readable  form  for the
         purpose of merging it into other  program  material of the Buyer but on
         termination of this  Agreement;  the PEP will be removed from the other
         program material with which it has been merged.

         The Buyer agrees to reproduce  the  copyright and other notices as they
         appear on or within the original  media on any copies,  which the Buyer
         makes of the PEP.

3.       Personal License

         The above-described license is personal to the Buyer,  non-transferable
         and non-exclusive.

4.       Installation

         It is the Buyer's  responsibility to install the PEP and to perform any
         merging  and  checks.  The  Seller  will  however  assist  the  Buyer's
         operations engineers in the initial phase following the delivery of the
         PEP until such personnel  reach the  familiarization  level required to
         make inputs and correlate outputs.

5.       Proprietary Rights and Nondisclosure

5.1      The PEP and the  copyright  and other  proprietary  rights of  whatever
         nature in the PEP are and will remain with the Seller.  The PEP and its
         contents are designated as confidential.

5.2      The Buyer  undertakes  not to disclose the PEP or parts thereof and its
         contents to any third party  without the prior  written  consent of the
         Seller.  In so far as it is necessary to disclose aspects of the PEP to
         employees,  such disclosure is permitted only for the purpose for which
         the PEP is  supplied  and only to the  employee  who  needs to know the
         same.

6.       Conditions of Use

6.1      The  Seller  does not  warrant  that the PEP will not  contain  errors.
         However,  should the PEP be found to contain  any error  within  thirty
         (30) days of  delivery,  the Buyer  will  notify  the  Seller  promptly
         thereof and the Seller  will take all proper  steps to correct the same
         at its own expense.

6.2      The Buyer will ensure  that the PEP is  correctly  used in  appropriate
         machines as indicated in the Performance Programs Manual (PPM) and that
         staff  are  properly  trained  to use the same,  to trace  and  correct
         running  faults,  to restart  and  recover  after  fault and to operate
         suitable checks for accuracy of input and output.

6.3      It  is  understood  that the PPM is the user's guide of the PEP and the
         Buyer will undertake to use the PEP in accordance with the PPM.

6.4      THE WARRANTIES,  OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES
         OF  THE  BUYER  SET  FORTH  IN  THIS  LICENCE  ARE   EXCLUSIVE  AND  IN
         SUBSTITUTION  FOR, AND THE BUYER HEREBY WAIVES,  RELEASES AND RENOUNCES
         ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND THE
         RIGHTS, CLAIMS OR REMEDIES OF THE BUYER AGAINST THE SELLER,  EXPRESS OR
         IMPLIED,  ARISING  BY  LAW  OR  OTHERWISE,  WITH  RESPECT  TO  ANY  NON
         CONFORMITY OR DEFECT IN THE PEP DELIVERED UNDER THIS LICENCE.

7.       Duration

         The rights  under this  license will be granted to the Buyer as long as
         the Buyer  operates a Seller's  Aircraft model to which the PEP refers.
         When the Buyer stops  operating  said  Aircraft  model,  the Buyer will
         return the PEP and any copies  thereof to the Seller,  accompanied by a
         notice certifying that the Buyer has returned all existing copies.
<PAGE>

                                                         APPENDIX 2 TO EXHIBIT F

                            LICENSE FOR USE OF CD-ROM

1.       Grant

1.1      The Seller grants the Buyer the right to use the Aircraft Documentation
         Retrieval System (ADRES) and/or the Computer  Assisted Aircraft Trouble
         Shooting  (CAATS) on CD-ROM for the term of this License.  Use of ADRES
         and/or  CAATS will be limited to the number of copies  defined  between
         the parties.

         For clarification,  it is hereby stated that the Power Plant IPC is not
         part of the  electronic IPC and is only available on other media (paper
         or film).

1.2      The above grant will be free of charge for as long as the  revisions of
         CAATS and ADRES are free of charge in accordance with Clause 14. At the
         end of such period(s)  license fees will be charged to the Buyer at the
         price stated in the then current Seller's Customer Services Catalog.

2.       Term

         The rights  under the  License  will be granted  from the date of first
         delivery  of ADRES  and/or  CAATS  as long as the  Buyer  operates  the
         Aircraft or until a replacement product will be provided by the Seller,
         whichever  occurs first.  Within thirty (30) days of  termination,  the
         Buyer will  return  ADRES  and/or  CAATS and all copies  thereof to the
         Seller.

3.       Revision Service

         The Seller will provide  revision service for ADRES and/or CAATS during
         the term. The revision  service will be based on the revision  service,
         which  the  Seller  provides  for the  documentation  in  paper or film
         format.

         ADRES and/or CAATS CD-ROM will be revised  concurrently  with the paper
         and film  deliveries.  Temporary  revisions will be provided in digital
         format under the form of 3-1/2 floppy disk. The retrieval  software for
         such  temporary  revisions  will be  embodied  on the  CAATS  and ADRES
         CD-ROM.

4        Personal License

         The License is personal to the Buyer, nontransferable and nonexclusive.
         The Buyer will not permit any third  party to use ADRES  and/or  CAATS,
         nor will it  transfer or  sublicense  ADRES  and/or  CAATS to any third
         party, without prior written consent from the Seller.

5.       Installation

         The Seller will  provide  the list of  hardware  on which ADRES  and/or
         CAATS will be installed.  The Buyer will be  responsible  for procuring
         such hardware and installing ADRES and/or CAATS.

6.       Proprietary Rights

         ADRES and/or CAATS are  proprietary to the Seller and the copyright and
         all other proprietary  rights in ADRES and/or CAATS are and will remain
         the property of the Seller.

7.       Copyright Indemnity

         The Seller will defend and  indemnify  the Buyer against any claim that
         the  normal  use of  ADRES  and/or  CAATS  infringes  the  intellectual
         property rights of any third party, provided that the Buyer

         (i)      immediately notifies the Seller of any such claim;
         (ii)     makes no admission or settlement of any claim;
         (iii)    allows the Seller  to have sole  control  of all  negotiations
                  for its settlement;
         (iv)     gives the  Seller  all  reasonable  assistance  in  connection
                  therewith.

8.       Confidentiality

         ADRES and/or CAATS and their contents are  designated as  confidential.
         The  Buyer  undertakes  not to  disclose  ADRES  and/or  CAATS or parts
         thereof to any third  party  without the prior  written  consent of the
         Seller.  In so far as it is  necessary  to  disclose  aspects  of ADRES
         and/or CAATS to the employees,  such disclosure is permitted solely for
         the purpose for which ADRES and/or CAATS are supplied and only to those
         employees who need to know the same.

9.       Conditions of Use

9.1      The  Buyer  will  not make any copies of ADRES and/or CAATS, except for
         installation purposes.

9.2      The Seller does not warrant  that the  operation  of ADRES and/or CAATS
         will be error free.  In the event of an error  occurring  within thirty
         (30) days of delivery,  the sole and exclusive  liability of the Seller
         will be, at its expense, to correct ADRES and/or CAATS in the following
         revision.

9.3      THE WARRANTIES,  OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES
         OF  THE  BUYER  SET  FORTH  IN  THIS  LICENCE  ARE   EXCLUSIVE  AND  IN
         SUBSTITUTION  FOR, AND THE BUYER HEREBY WAIVES,  RELEASES AND RENOUNCES
         ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND THE
         RIGHTS, CLAIMS OR REMEDIES OF THE BUYER AGAINST THE SELLER,  EXPRESS OR
         IMPLIED,  ARISING  BY  LAW  OR  OTHERWISE,  WITH  RESPECT  TO  ANY  NON
         CONFORMITY  OR DEFECT IN THE ADRES  AND/OR CAATS  DELIVERED  UNDER THIS
         LICENCE.

10.      Training

         In  addition  to the user  guide  supplied  with  ADRES  and/or  CAATS,
         training and other assistance may be provided on the Buyer's request at
         conditions to be mutually agreed.

11.      Replacement of Product

         For clarification  purposes it is hereby expressly  stated  that  ADRES
         and/or  CAATS  will   be   offered   for a  limited  time  period,  not
         exceeding  the  term of this  License.  In the event  that  the  Seller
         should  offer  a  replacement  product,  the  conditions for using such
         product will be subject to a separate agreement.


<PAGE>

                                                                       EXHIBIT G

                          SELLER PRICE REVISION FORMULA

l.       BASE PRICE
         ----------

         The Base Price of the A318 Aircraft is as quoted in Clause 3.1.1 of the
         Agreement.  The Base Price of the  Airframe of the A319  Aircraft is as
         quoted in Clause 3.1.2.2 of the Agreement.

2.       BASE PERIOD

         The above Base  Prices have been  established  in  accordance  with the
         averaged  economic  conditions   prevailing  in  December  1997/January
         1998/February 1998 and corresponding to theoretical delivery conditions
         prevailing  in January  1999 as  defined  by ECIb and ICb index  values
         indicated in Paragraph 4 of this Exhibit G.

         These Base  Prices are  subject to  adjustment  for changes in economic
         conditions  as  measured by data  obtained  from the US  Department  of
         Labor,  Bureau  of  Labor  Statistics,   and  in  accordance  with  the
         provisions of Paragraphs 4 and 5 of this Exhibit G.

         ECIb and ICb index  values  indicated  in Paragraph 4 of this Exhibit G
         will not be subject to any revision of these indexes.

3.       REFERENCE INDEXES

         Labor Index:  Published quarterly by the US Department of Labor, Bureau
         of Labor  Statistics,  in "News" (Table 6:  "Employment  Cost Index for
         wages and  salaries  for  private  industry  workers  by  industry  and
         occupational group" (NOT SEASONALLY ADJUSTED), or such other names that
         may be from time to time used for the  publication  title and/or table.
         The  index  is  found  under  aircraft  manufacturing  with a  standard
         industrial  classification code of SIC 3721 and hereinafter is referred
         to as "ECI-SIC-3721W" (Base month and year June 1989 = 100).

         Material Index:  "Industrial  Commodities"  (hereinafter referred to as
         "IC-Index"), published monthly by the US Department of Labor, Bureau of
         Labor  Statistics,  in "PPI Detailed  Report" (Table 6: Producer prices
         indexes and percent  changes for  commodity  groupings  and  individual
         items,  not seasonally  adjusted)  (Base year 1982 = 100) or such other
         names  which may be from time to time  used for the  publication  title
         and/or table.


<PAGE>


4 -      REVISION FORMULA

         Pn       =        (Pb + F) (0.75 ECIn/ECIb + 0.25 ICn/ICb)

         Where

         Pn       =        Revised Base Price of the Airframe.

         Pb       =        Base  Price  of  the  Airframe at economic conditions
                           December  1997/January  1998/February  1998  averaged
                           (January 1999 delivery conditions).


         F        =        (0.005 x N x Pb)  Where   N =  The  calendar  year of
                           delivery of the Aircraft minus 1999.

         ECIn              = The  arithmetic  average  of the  latest  published
                           values available at the date of Aircraft delivery for
                           ECI-SIC-3721W  for the  llth,  l2th and  l3th  months
                           prior to the month of  delivery  of the  Aircraft  (1
                           decimal),  where  the  quarterly  value for the third
                           month  of  a  quarter  (March,  June,  September  and
                           December)  will  be  deemed  to  apply  for  the  two
                           preceding months.

         ECIb     =        ECI-SIC-3721W for December l997/January 1998/February
                           1998 averaged (= 134.7).

         ICn      =        The  arithmetic  average  of   the  latest  published
                           values available at the date of Aircraft delivery for
                           the IC-Index for the llth, l2th and l3th months prior
                           to the month of delivery of the Aircraft (l decimal).

         ICb      =        IC-Index for December 1997/January 1998/February 199
                           averaged (=126.1).

         In determining the Revised Base Price at delivery of the Aircraft, each
         quotient will be calculated to the nearest ten thousandth (4 decimals).
         If the next succeeding place is five (5) or more, the preceding decimal
         place will be raised to the next higher  figure.  The final factor will
         be rounded to the  nearest ten  thousandth  (4  decimals).  After final
         computation,  Pn will be rounded to the next whole  number (0.5 or more
         rounded to l).


<PAGE>


5.       GENERAL PROVISIONS

5.1      Substitution of Indexes

         In the event that:

         (i)      the  US  Department  of  Labor   substantially   revises   the
                  methodology of calculation of any  of  the indexes referred to
                  hereabove, or

         (ii)     the US Department of Labor discontinues, either temporarily or
                  permanently, any of the indexes referred to hereabove, or

         (iii)    the data samples used to calculate any of the indexes referred
                  to hereabove are substantially changed,

         the Seller will select a substitute index.

         Such  substitute  index will  reflect as closely as possible the actual
         variations of the wages or of the material  costs,  as the case may be,
         used in the calculation of the original index.

         As a result of this  selection of a substitute  index,  the Seller will
         make an appropriate adjustment to its price revision formula,  allowing
         to combine the successive  utilization of the original index and of the
         substitute index.

5.2      Final Index Values

         The Revised Base Price at the date of Aircraft  delivery  will be final
         and will not be subject to further  adjustments of any kind and for any
         reason to the  applicable  indexes as published at the date of Aircraft
         delivery.
<PAGE>

                                                                       EXHIBIT H

                    PROPULSION SYSTEMS PRICE REVISION FORMULA

l.       REFERENCE PRICE
         ---------------

         The  Reference  Price  of a set of two (2) CFM  International  56-5B5/P
         engines and additional  equipment is as quoted in Clause 3.1.2.3 of the
         Agreement.

         This  Reference  Price is valid for  Aircraft  delivered  no later than
         December 31, 2007, and is subject to adjustment for changes in economic
         conditions  as  measured by data  obtained  from the US  Department  of
         Labor,  Bureau  of  Labor  Statistics,   and  in  accordance  with  the
         provisions of Paragraphs 4 and 5 of this Exhibit H.

2.       REFERENCE PERIOD - REFERENCE COMPOSITE PRICE INDEX

         The above Reference  Price has been  established in accordance with the
         economic  conditions  prevailing in July 1996 (January 1997 theoretical
         delivery conditions),  as defined,  according to CFM International,  by
         the Reference Composite Price Index of 145.03.

3.       REFERENCE INDEXES

         Labor Index:  "Aircraft Engines and Engine Parts," Standard  Industrial
         Classification  3724--Average hourly earnings  (hereinafter referred to
         as "HE SIC 3724"),  published by the US Department of Labor,  Bureau of
         Labor Statistics,  in "Employment and Earnings,"  (Table B-15:  Average
         hours and earnings of production or  nonsupervisory  workers on private
         nonfarm payrolls by detailed  industry) or such other names that may be
         from time to time used for the publication title and/or table.

         Material Index (I): "Industrial  Commodities"  (hereinafter referred to
         as "IC-Index"), published monthly by the US Department of Labor, Bureau
         of Labor Statistics, in "PPI Detailed Report" (Table 6: Producer prices
         indexes and percent  changes for  commodity  groupings  and  individual
         items,  not seasonally  adjusted)  (Base year 1982 = 100) or such other
         names  that may be from  time to time  used for the  publication  title
         and/or table.

         Material Index (II):  "Metals and Metal  Products" Code l0 (hereinafter
         referred to as "MMP-Index"),  published monthly by the US Department of
         Labor,  Bureau of Labor Statistics,  in "PPI Detailed Report" (Table 6:
         Producer prices indexes and percent changes for commodity groupings and
         individual  items,  not seasonally  adjusted) (Base year 1982 = 100) or
         such other names that may be from time to time used for the publication
         title and/or table.


<PAGE>


         Energy   Index:   "Fuels  and  Related   Products  and  Power"  Code  5
         (hereinafter  referred to as "EP-Index"),  published  monthly by the US
         Department  of Labor,  Bureau  of Labor  Statistics,  in "PPI  Detailed
         Report"  (Table 6:  Producer  prices  indexes and  percent  changes for
         commodity  groupings and individual  items,  not  seasonally  adjusted)
         (Base  year 1982 = 100) or such  other  names  that may be from time to
         time used for the publication title and/or table.

4.       REVISION FORMULA

         Pn       =        Pb x CPIn
                               145.03

         Where

         Pn       =        Revised Reference Price of a set of two (2)engines at
                           delivery of the Aircraft.

         Pb       =        Reference Price as defined above.

         CPIn     =        Composite Price Index for the sixth  month  prior  to
                           the month of delivery of the Aircraft.

                           Said Composite Price Index is composed as follows:

         CPIn =            0.55 (HEn   x 100) + 0.10 ICn + 0.25 MMPn + 0.10 EPn
                                      ---
                                (11.16          )

         Where

         HEn      =        HE SIC 3724 for the sixth month prior to the month of
                           delivery of the Aircraft; the  quotient  HEn/11.16 is
                           rounded  to  the  nearest  third  decimal place.  The
                           product by 0.55 is  rounded  to  the  nearest  second
                           decimal place.

         ICn      =        IC-Index  for  the  sixth month prior to the month of
                           delivery of the Aircraft.

         MMPn     =        MMP-Index for the sixth month prior to the  month  of
                           delivery of th  Aircraft.  The  product  by  0.25  is
                           rounded to the nearest second decimal place.

         EPn      =        EP-Index  for  the sixth  month prior to the month of
                           delivery of the Aircraft.


<PAGE>





         The  Composite  Price Index will be  determined  to the second  decimal
         place.  If the next  succeeding  decimal place is five (5) or more, the
         preceding decimal figure will be raised to the next higher figure.

         The  final  factor  will  be  rounded  to  the  nearest  thousandth  (3
         decimals).

5.       GENERAL PROVISIONS

5.1      The Revised  Reference  Price at delivery of the  Aircraft  will be the
         final  price and will not be  subject  to  further  adjustments  in the
         indexes.

5.2      If no final index value is available for any of the applicable  months,
         the  published  preliminary  figures  will be the  basis on  which  the
         Revised Reference Price will be computed.

5.3      If the US Department of Labor substantially  revises the methodology of
         calculation   of  the  indexes   referred  to  in  this  Exhibit  H  or
         discontinues  any of these  indexes,  AVSA will, in agreement  with CFM
         International,  apply a  substitute  for the  revised  or  discontinued
         index,  such  substitute  index  to lead  in  application  to the  same
         adjustment result,  insofar as possible, as would have been achieved by
         continuing the use of the original index as it may have  fluctuated had
         it not been revised or discontinued.

         Appropriate  revision of the formula  will be made to  accomplish  this
         result.

5.4      Should the above escalation  provisions  become null and void by action
         of the US Government,  the Reference  Price will be adjusted to reflect
         increases in the cost of labor,  material and fuel which have  occurred
         from the period  represented by the applicable  Reference Price Indexes
         to the sixth month prior to the scheduled delivery of the Aircraft.

5.5      The Revised  Reference  Price at  delivery of the  Aircraft in no event
         will be less than the  Reference  Price  defined in Paragraph 1 of this
         Exhibit H.

                                                                       EXHIBIT I

                              CONFIDENTIALITY TERMS

The  minimum  requirements  for  confidentiality  agreements  pertaining  to the
disclosure of any Confidential Material ("Confidentiality  Agreement(s)") are as
follow.

1.   Confidential   Material  is  identified  as  nonpublic,   proprietary   and
confidential,  provided that Confidential  Material will not include information
to the extent that such  information  (i) is already known to the recipient,  or
(ii) is or becomes public knowledge or ceases to remain confidential, other than
as a  result  of a  breach  by  the  recipient  of  its  obligations  under  the
Confidentiality Agreement.

2.  The  Confidentiality  Agreement  will  cover  oral,  electronic  or  written
disclosures  of the  contents of  Confidential  Material,  whether in full or in
summary form.

3. Subject to any legal or governmental disclosure  requirements,  the receiving
party will disclose Confidential Material only to those of its agents, employees
and/or  advisors who have a need to know in order to accomplish  the purpose for
which the  Confidential  Material is given,  and will be used only to accomplish
such purpose.

4. All  originals  and any copy made of  Confidential  Material  will be clearly
marked as confidential and subject to the Confidentiality  Agreement, and copies
that are no longer  needed  for the  purposes  for which they were given will be
returned to the Buyer.

5.  Confidentiality  Agreements,  insofar as they pertain to Technical  Data and
Documentation,  will be for a term of *. With respect to all other  Confidential
Material,  a term of * after  delivery of the last  Aircraft  will be applied to
Confidentiality Agreements.