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                           LOAN AND SECURITY AGREEMENT



                          DATED AS OF DECEMBER 19, 1997



                                     between



                              CIS AIR CORPORATION,

                                  as Borrower,


                                       and


                             HELLER FINANCIAL, INC.,

                             as Agent and as Lender




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                                TABLE OF CONTENTS
                                                                                                     Page

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SECTION 1.  DEFINITIONS.................................................................................1
         1.1      Certain Defined Terms.................................................................1
         1.2      Accounting Terms.....................................................................12
         1.3      Other Definitional Provisions........................................................12

SECTION 2.  LOANS AND COLLATERAL.......................................................................13
         2.1      Loans................................................................................13
                  (A)      Revolving Loan..............................................................13
                  (B)      Borrowing Mechanics.........................................................14
                  (C)      Revolving Notes.............................................................14
                  (D)      Evidence of Revolving Loan Obligations......................................14
         2.2      Interest.............................................................................14
                  (A)      Rate of Interest............................................................14
                  (B)      Computation and Payment of Interest.........................................15
                  (C)      Interest Laws...............................................................15
         2.3      Fees.................................................................................15
                  (A)      Closing Fee.................................................................15
                  (B)      Unused Line Fee.............................................................16
                  (C)      Audit Fees..................................................................16
                  (D)      Other Fees and Expenses.....................................................16
         2.4      Payments and Prepayments.............................................................16
                  (A)      Manner and Time of Payment..................................................16
                  (B)      Mandatory Prepayments.......................................................16
                           (1)      Overadvance........................................................16
                           (2)      Proceeds of Asset Dispositions.....................................16
                           (3)      Events of Loss with Respect to Collateral..........................16
                  (C)      Voluntary Prepayments and Repayments........................................17
                  (D)      Payments on Business Days...................................................18
         2.5      Term of this Agreement...............................................................18
         2.6      Statements...........................................................................18
         2.7      Grant of Security Interest...........................................................18
         2.8      Financing and Acquisition of Newly Acquired Engines and Aircraft.....................19
         2.9      Capital Adequacy and Other Adjustments...............................................20
         2.10     Taxes................................................................................20
                  (A)      No Deductions...............................................................20
                  (B)      Changes in Tax Laws.........................................................21
                  (C)      Foreign Lenders.............................................................21
         2.11     Optional Prepayment/Replacement of Agent or Lenders in Respect of Increased
                  Costs................................................................................22

 
                                                     i

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SECTION 3.  CONDITIONS TO LOANS........................................................................22
         3.1      Conditions to Loans..................................................................22
                  (A)      Closing Deliveries..........................................................23
                  (B)      Security Interests..........................................................23
                  (C)      Closing Date Availability...................................................23
                  (D)      Representations and Warranties..............................................23
                  (E)      Closing Fee.................................................................23
                  (F)      No Default..................................................................23
                  (G)      Performance of Agreements...................................................23
                  (H)      No Prohibition..............................................................23
                  (I)      No Litigation...............................................................23
                  (J)      Other Creditor Agreements...................................................24
                  (K)      Assignment of Lease Agreements..............................................24
                  (L)      Insurance...................................................................24
                  (M)      Business Plan...............................................................24
                  (N)      Appraisals..................................................................24
                  (O)      Audit.......................................................................24
                  (P)      Release and Pay-off Letter..................................................24
                  (Q)      Title Search................................................................24
                  (R)      Acknowledgement of Assignment of Accounts Receivable........................25
                  (S)      Collateral Records..........................................................25
                  (T)      Acknowledgment of Waiver of Broker's Commission.............................25
                  (U)      Bank Accounts...............................................................25

SECTION 4.  BORROWER'S REPRESENTATIONS AND WARRANTIES..................................................25
         4.1      Organization, Powers, Capitalization.................................................25
                  (A)      Organization and Powers.....................................................25
                  (B)      Capitalization..............................................................25
         4.2      Authorization of Borrowing, No Conflict..............................................26
         4.3      Financial Condition..................................................................26
         4.4      Indebtedness and Liabilities.........................................................26
         4.5      Account Warranties...................................................................26
         4.6      Names................................................................................27
         4.7      Locations; FEIN......................................................................27
         4.8      Title to Properties; Liens...........................................................27
         4.9      Litigation; Adverse Facts............................................................27
         4.10     Payment of Taxes.....................................................................27
         4.11     Performance of Agreements............................................................27
         4.12     Employee Benefit Plans...............................................................28
         4.13     Intellectual Property................................................................28
         4.14     Broker's Fees........................................................................28
         4.15     Environmental Compliance.............................................................28
         4.16     Solvency.............................................................................28

 
                                                    ii

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         4.17     Disclosure...........................................................................28
         4.18     Insurance............................................................................29
         4.19     Compliance with Laws.................................................................29
         4.20     Bank Accounts........................................................................29
         4.21     Subsidiaries.........................................................................29
         4.22     Employee Matters.....................................................................29
         4.23     Governmental Regulation..............................................................29

SECTION 5.  AFFIRMATIVE COVENANTS......................................................................30
         5.1      Financial Statements and Other Reports...............................................30
                  (A)      Monthly Financials..........................................................30
                  (B)      Year-End Financials.........................................................30
                  (C)      Accountants' Certification and Reports......................................31
                  (D)      Compliance Certificate......................................................31
                  (E)      Borrowing Base Certificates, Registers and Journals.........................31
                  (F)      Management Report...........................................................31
                  (G)      Appraisals..................................................................32
                  (H)      Government Notices..........................................................32
                  (I)      Events of Default, etc......................................................32
                  (J)      Trade Names.................................................................32
                  (K)      Locations...................................................................32
                  (L)      Bank Accounts...............................................................32
                  (M)      Litigation..................................................................33
                  (N)      Projections.................................................................33
                  (O)      Other Indebtedness Notices..................................................33
                  (P)      Other Information...........................................................33
         5.2      Access to Accountants and Management.................................................33
         5.3      Inspection...........................................................................33
         5.4      Collateral Records...................................................................34
         5.5      Account Covenants; Verification......................................................34
         5.6      Collection of Accounts and Payments..................................................34
         5.7      Endorsement..........................................................................35
         5.8      Corporate Existence..................................................................35
         5.9      Payment of Taxes.....................................................................35
         5.10     Maintenance of Properties; Insurance.................................................35
         5.11     Compliance with Laws.................................................................36
         5.12     Further Assurances...................................................................36
         5.13     Collateral Locations.................................................................36
         5.14     Bailees..............................................................................36
         5.15     Use of Proceeds and Margin Security..................................................36
         5.16     Notification of Shop Visits and Movement of Engines..................................37

SECTION 6.  FINANCIAL COVENANTS........................................................................37
         6.1      Tangible Net Worth...................................................................37

 
                                                    iii

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         6.2      Fixed Charge Coverage................................................................37

SECTION 7.  NEGATIVE COVENANTS.........................................................................37
         7.1      Indebtedness and Liabilities.........................................................37
         7.2      Guaranties...........................................................................38
         7.3      Transfers, Liens and Related Matters.................................................38
                  (A)      Transfers...................................................................38
                  (B)      Liens.......................................................................38
                  (C)      No Negative Pledges.........................................................38
         7.4      Investments and Loans................................................................38
         7.5      Restricted Payments..................................................................38
         7.6      Restriction on Fundamental Changes...................................................39
         7.7      Transactions with Affiliates.........................................................39
         7.8      Environmental Liabilities............................................................39
         7.9      Conduct of Business..................................................................39
         7.10     Compliance with ERISA................................................................39
         7.11     Tax Consolidations...................................................................40
         7.12     Subsidiaries.........................................................................40
         7.13     Fiscal Year..........................................................................40
         7.14     Press Release; Public Offering Materials.............................................40
         7.15     Bank Accounts........................................................................40
         7.16     Dividends............................................................................40
         7.17     Lease of Owned Engines, Newly Acquired Engines and Aircraft..........................40
         7.18     Brokerage Agreements.................................................................41

SECTION 8.  DEFAULT, RIGHTS AND REMEDIES...............................................................41
         8.1      Event of Default.....................................................................41
                  (A)      Payment.....................................................................41
                  (B)      Default in Other Agreements.................................................41
                  (C)      Breach of Certain Provisions................................................41
                  (D)      Breach of Warranty..........................................................41
                  (E)      Other Defaults Under Loan Documents.........................................41
                  (F)      Change in Control...........................................................42
                  (G)      Involuntary Bankruptcy; Appointment of Receiver, etc........................42
                  (H)      Voluntary Bankruptcy; Appointment of Receiver, etc..........................42
                  (I)      Liens.......................................................................42
                  (J)      Judgment and Attachments....................................................42
                  (K)      Dissolution.................................................................43
                  (L)      Solvency....................................................................43
                  (M)      Injunction..................................................................43
                  (N)      Invalidity of Loan Documents................................................43
                  (O)      Failure of Security.........................................................43
                  (P)      Damage, Strike, Casualty....................................................43
                  (Q)      Licenses and Permits........................................................43

 
                                                    iv

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                  (R)      Forfeiture..................................................................43
                  (S)      Executive Officer...........................................................44
         8.2      Suspension of Commitments............................................................44
         8.3      Acceleration.........................................................................44
         8.4      Remedies.............................................................................44
         8.5      Appointment of Attorney-in-Fact......................................................45
         8.6      Limitation on Duty of Agent with Respect to Collateral...............................45
         8.7      Application of Proceeds..............................................................45
         8.8      License of Intellectual Property.....................................................46
         8.9      Waivers, Non-Exclusive Remedies......................................................46

SECTION 9.  ASSIGNMENT AND PARTICIPATION...............................................................46
         9.1      Assignments and Participations in Loans..............................................46
         9.2      Agent................................................................................47
                  (A)      Appointment.................................................................47
                  (B)      Nature of Duties............................................................48
                  (C)      Rights, Exculpation, Etc....................................................48
                  (D)      Reliance....................................................................49
                  (E)      Indemnification.............................................................49
                  (F)      Heller Individually.........................................................49
                  (G)      Successor Agent.............................................................50
                           (1)      Resignation........................................................50
                           (2)      Appointment of Successor...........................................50
                           (3)      Successor Agent....................................................50
                  (H)      Collateral Matters..........................................................50
                           (1)      Release of Collateral..............................................50
                           (2)      Confirmation of Authority; Execution of Releases...................50
                           (3)      Absence of Duty....................................................51
                  (I)      Agency for Perfection.......................................................51
                  (J)      Exercise of Remedies........................................................51
         9.3      Consents.............................................................................52
         9.4      Set Off and Sharing of Payments......................................................52
         9.5      Disbursement of Funds................................................................52
         9.6      Settlements, Payments and Information................................................53
                  (A)      Revolving Advances and Payments; Fee Payments...............................53
                  (B)      Availability of Lender's Pro Rata Share.....................................54
                  (C)      Return of Payments..........................................................54
         9.7      Dissemination of Information.........................................................54

SECTION 10.  MISCELLANEOUS.............................................................................54
         10.1     Expenses and Attorneys' Fees.........................................................54
         10.2     Indemnity............................................................................55
         10.3     Amendments and Waivers. .............................................................56
         10.4     Notices..............................................................................56

 
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         10.5     Survival of Representations, Warranties and Certain Agreements.......................57
         10.6     Indulgence Not Waiver................................................................57
         10.7     Marshaling; Payments Set Aside.......................................................58
         10.8     Entire Agreement.....................................................................58
         10.9     Independence of Covenants............................................................58
         10.10    Severability.........................................................................58
         10.11    Lenders' Obligations Several; Independent Nature of Lenders' Rights..................58
         10.12    Headings.............................................................................59
         10.13    Applicable Law.......................................................................59
         10.14    Successors and Assigns...............................................................59
         10.15    No Fiduciary Relationship; Limitation of Liabilities.................................59
         10.16    Consent to Jurisdiction..............................................................59
         10.17    Waiver of Jury Trial.................................................................60
         10.18    Construction.........................................................................60
         10.19    Counterparts; Effectiveness..........................................................60
         10.20    No Duty..............................................................................60
         10.21    Confidentiality......................................................................60

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                                    EXHIBITS

EXHIBIT A         Assignment of Lease Agreement (Engines)
EXHIBIT A-1       Assignment of Lease Agreement (Aircraft)
EXHIBIT B         Borrowing Base Certificate
EXHIBIT C         Compliance Certificate
EXHIBIT D         Lender Addition Agreement
EXHIBIT E         Reconciliation Report
EXHIBIT F         Acknowledgement of Assignment of Accounts Receivable

                                    SCHEDULES

1.1(A)   Aircraft
1.1(B)            Engine Leases
1.1(C)   Initial Engine Leases
1.1(D)   Initial Leased Engines
1.1(E)            Initial Owned Engines
1.1(F)            Initial Borrowing Base Engines
3.1(A)   List of Closing Documents
3.1(R)   Account Payors
4.1(B)            Capitalization of Borrower
4.4               Indebtedness and Liabilities
4.6               Trade Names (Present and Past Five Years)
4.7               Location of Principal Place of Business, Books and Records
                       and Collateral
4.9               Litigation
4.13              Intellectual Property
4.20              Bank Accounts
4.21              Subsidiaries
4.22              Employee Matters
7.1               Indebtedness


 
<PAGE>
                           LOAN AND SECURITY AGREEMENT

         This LOAN AND  SECURITY  AGREEMENT is dated as of December 19, 1997 and
entered into among CIS AIR  CORPORATION,  a Delaware  corporation  ("Borrower"),
with its principal place of business at One Northern Concourse,  North Syracuse,
New York 13212,  the  financial  institution(s)  listed on the  signature  pages
hereof and their respective successors and assigns (each individually a "Lender"
and collectively  "Lenders") and HELLER FINANCIAL,  INC., a Delaware corporation
(in its individual capacity,  "Heller"), with offices at 500 West Monroe Street,
Chicago,  Illinois 60661,  for itself as a Lender and as Agent.  All capitalized
terms used herein are defined in Section 1 of this Agreement.

         WHEREAS,  Borrower  desires  that Lenders  extend a credit  facility to
refinance existing debt, provide working capital financing and provide funds for
other general corporate purposes; and

         WHEREAS,  Borrower  desires  to secure its  obligations  under the Loan
Documents by granting to Agent, for the benefit of Lenders,  a security interest
in and lien upon certain of Borrower's property;

         NOW,  THEREFORE,  in  consideration of the premises and the agreements,
provisions and covenants herein contained,  Borrower, Agent and Lenders agree as
follows:

                             SECTION 1. DEFINITIONS

         1.1 Certain  Defined Terms.  The following terms used in this Agreement
shall have the following meanings:

         "Accounts"  means all  "accounts"  (as  defined  in the UCC),  accounts
receivable,  contract rights and general  intangibles  relating thereto,  notes,
drafts and other forms of  obligations  owed to or owned by Borrower  arising or
resulting  from the sale of goods or the rendering of services or the leasing or
sale of Collateral.

         "Affiliate"  means any Person  (other  than Agent or any  Lender):  (a)
directly or indirectly controlling,  controlled by, or under common control with
Borrower; (b) directly or indirectly owning or holding five percent (5%) or more
of any equity interest in Borrower; (c) five percent (5%) or more of whose stock
or other  equity  interest  having  ordinary  voting  power for the  election of
directors  or the  power to  direct or cause the  direction  of  management,  is
directly  or  indirectly  owned or held by  Borrower;  or (d) which has a senior
executive  officer  who is also a senior  executive  officer  of  Borrower.  For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling",  "controlled by" and "under common control with") means the
possession  directly or indirectly of the power to direct or cause the direction
of the  management  and policies of a Person,  whether  through the ownership of
voting securities or other equity interest, or by contract or otherwise.


                                        1

<PAGE>

         "Agent" means Heller in its capacity as agent for the Lenders under the
Loan  Documents  and  any  successor  in such  capacity  appointed  pursuant  to
subsection 9.1.

         "Agent's Account" means ABA No. 031000011,  Account No.  14187-90307 at
Core States, N.A. Philadelphia, Pa., P.O. Box 8500-9570, 19178-9570,  Reference:
Heller Business Credit for the benefit of CIS AIR CORPORATION.

         "Agreement"  means  this  Loan  and  Security  Agreement  as it  may be
amended, restated, supplemented or otherwise modified from time to time.

         "Aircraft"  means each of the Aircraft listed on Schedule 1.1(A) hereto
and any  aircraft  added to the  Collateral  pursuant  to a  Security  Agreement
Supplement.

         "Aircraft Mortgage and Security  Agreement" means that certain Aircraft
Mortgage  and  Security  Agreement  of even  date  herewith  between  Agent  and
Borrower, as the same may be amended, modified or restated from time to time.

         "Appraiser" means  Sage-Popovich,  Inc., or another mutually acceptable
appraiser as determined by Borrower and Agent.

         "Asset  Disposition"  means the  disposition,  whether by sale,  lease,
transfer, loss, damage, destruction, condemnation or otherwise, of any or all of
the  Collateral  of  Borrower  or any of its  Subsidiaries  other  than sales of
Inventory in the ordinary  course of business or the lease of an Engine under an
Engine Lease.

         "Assignment  of Lease  Agreements"  means,  with respect to each Engine
Lease and each Aircraft  subject to a lease,  an  Assignment of Lease  Agreement
(Engines) or an Assignment of Lease Agreement (Aircraft),  as applicable, in the
form of Exhibit A or Exhibit A-1 hereto, respectively, each between Borrower and
Agent,  assigning  all of  Borrower's  right,  title and interest to such Engine
Lease or Aircraft, as applicable, to Agent, as the same may be amended, modified
or restated from time to time.

         "Base  Rate" means a variable  rate of interest  per annum equal to the
higher of (a) the rate of interest  from time to time  published by the Board of
Governors of the Federal Reserve System as the "Bank Prime Loan" rate in Federal
Reserve  Statistical Release H.15(519) entitled "Selected Interest Rates" or any
successor  publication of the Federal  Reserve  System  reporting the Bank Prime
Loan rate or its  equivalent,  or (b) the  Federal  Funds  Effective  Rate.  The
statistical  release  generally  sets  forth a Bank  Prime  Loan  rate  for each
Business Day. In the event the Board of Governors of the Federal  Reserve System
ceases to publish a Bank Prime Loan rate or its equivalent, the term "Base Rate"
shall mean a variable  rate of  interest  per annum  equal to the highest of the
"prime rate",  "reference  rate",  "base rate",  or other similar rate announced
from time to time by any of Bankers Trust  Company,  The Chase  Manhattan  Bank,
N.A., or their successors (with the understanding  that any such rate may merely
be a reference  rate and may not  necessarily  represent the lowest or best rate
actually charged to any customer by any such bank).

                                        2

<PAGE>
         "Base Rate Loans" means Loans bearing  interest at rates  determined by
reference to the Base Rate.

         "Blocked  Accounts" has the meaning assigned to that term in subsection
5.6.

         "Borrower"  has the meaning  assigned  to that term in the  preamble to
this Agreement.

         "Borrowing  Base" has the meaning  assigned to that term in  subsection
2.1(A).

         "Borrowing  Base  Certificate"   means  a  certificate  and  assignment
schedule duly executed by an officer of Borrower appropriately  completed and in
substantially the form of Exhibit B.

         "Business  Day" means any day  excluding  Saturday,  Sunday and any day
which is a legal holiday under the laws of the State of Illinois,  Pennsylvania,
or the  city of  Chicago,  Illinois  or is a day on which  banking  institutions
located in any such state or city are closed.

         "Capital Lease" means any lease of any property (whether real, personal
or mixed) that,  in conformity  with GAAP,  should be accounted for as a capital
lease.

         "Cash  Equivalents"  means: (a) marketable direct obligations issued or
unconditionally  guaranteed  by the United  States  Government  or issued by any
agency thereof; and backed by the full faith and credit of the United States, in
each case maturing  within six (6) months from the date of acquisition  thereof;
(b)  commercial  paper maturing no more than six (6) months from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Moody's Investors Service, Inc.; and (c)
certificates of deposit or bankers'  acceptances  maturing within six (6) months
from the date of issuance  thereof  issued by, or overnight  reverse  repurchase
agreements  from,  any commercial  bank  organized  under the laws of the United
States of  America or any state  thereof  or the  District  of  Columbia  having
combined  capital and surplus of not less than  $250,000,000  and not subject to
setoff rights in favor of such bank.

         "Closing Date" means December 19, 1997.

         "Collateral" has the meaning assigned to such term in subsection 2.7.

         "Collecting  Banks" has the meaning assigned to that term in subsection
5.6.

         "Commitment"  or  "Commitments"  means the commitment or commitments of
Lenders to make Loans as set forth in subsection 2.1(A).


                                        3
<PAGE>
         "Compliance Certificate" means a certificate duly executed by the chief
executive officer or chief financial officer of Borrower appropriately completed
and in substantially the form of Exhibit C.

         "Default" means a condition,  act or event that,  after notice or lapse
of time or both, would constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or cure period.

         "Default Rate" has the meaning assigned to that term in subsection 2.2.

         "EBITDA" means, for any period,  without duplication,  the total of the
following  for Borrower  and its  Subsidiaries  on a  consolidated  basis,  each
calculated for such period:  (1) net income  determined in accordance with GAAP;
plus, to the extent  included in the  calculation of net income,  (2) the sum of
(a) income and franchise taxes paid or accrued;  (b) Interest  Expenses,  net of
interest  income,  paid or  accrued;  (c)  interest  paid in kind,  if any;  (d)
amortization and depreciation and (e) other non-cash charges (excluding accruals
for cash expenses made in the ordinary course of business);  less, to the extent
included in the calculation of net income,  (3) the sum of (a) the income of any
Person (other than wholly-owned Subsidiaries of Borrower) in which Borrower or a
wholly owned  Subsidiary  of Borrower has an  ownership  interest  except to the
extent such income is received by Borrower or such wholly-owned  Subsidiary in a
cash  distribution  during such period;  (b) gains or losses from sales or other
dispositions of assets,  excluding Engines and Inventory  (including  promissory
notes and other  evidence of  indebtedness  relating to sale or  disposition  of
Engines or  Inventory  which  result in a cash  gain),  other than in the normal
course of business; and (c) extraordinary or non-recurring gains, but not net of
extraordinary or non-recurring "cash" losses.

         "Employee  Benefit  Plan" means any  employee  benefit  plan within the
meaning  of Section  3(3) of ERISA  which (a) is  maintained  for  employees  of
Borrower or any ERISA  Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of Borrower or any current or former
ERISA Affiliate.

         "Engines"  means,  collectively,  each  Owned  Engine,  Leased  Engine,
Non-Borrowing Base Engine and Newly Acquired Engine.

         "Engine Lease" means each engine lease listed on Schedule 1.1(B) hereto
and each subsequent lease of an Engine which has been assigned to Agent pursuant
to an Assignment of Lease Agreement (Engines).

         "Environmental  Claims"  means  claims,  liabilities,   investigations,
litigation,   administrative  proceedings,   judgments  or  orders  relating  to
Hazardous Materials.

         "Environmental  Laws"  means any  present or future  federal,  state or
local law, rule,  regulation or order relating to pollution,  waste, disposal or
the  protection  of human health or safety,  plant life or animal life,  natural
resources or the environment.

 
                                        4
<PAGE>
         "Equipment"  means all "equipment" (as defined in the UCC),  including,
without  limitation,  all furniture,  furnishings,  fixtures,  machinery,  motor
vehicles,  trucks, trailers,  vessels,  aircraft and rolling stock and all parts
thereof and all additions and accessions thereto and replacements therefor.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended  from  time to  time,  and any  successor  statute  and  all  rules  and
regulations promulgated thereunder.

         "ERISA  Affiliate" means any Person who is a member of a group which is
under common  control with Borrower who is treated as a single  employer  within
the meaning of Section 414(b) and (c) of the IRC.

         "Event of  Default"  means each of the  events set forth in  subsection
8.1.

         "FAA" means the United States Federal Aviation Administration,  or such
other entity which may, from time to time, regulate the aircraft industry.

         "Federal Funds Effective Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve  System  arranged  by  Federal  funds  brokers,   as  published  on  the
immediately  following  Business Day by the Federal Reserve Bank of New York or,
if  such  rate is not  published  for  any  Business  Day,  the  average  of the
quotations  for the day of the  requested  Loan  received  by Agent  from  three
Federal funds brokers of recognized standing selected by Agent.

         "Fiscal  Year" means each twelve month period ending on the last day of
May in each year.

         "Fixed Charge Coverage" means, for any period,  EBITDA divided by Fixed
Charges.

         "Fixed  Charges"  means,  for any period,  and each calculated for such
period (without duplication),  (a) Interest Expenses paid or accrued by Borrower
and its  Subsidiaries  determined  in accordance  with GAAP;  plus (b) scheduled
payments of  principal  with  respect to all  Indebtedness  of Borrower  and its
Subsidiaries; plus (c) any provision for (to the extent it is greater than zero)
income or franchise taxes included in the determination of net income, excluding
any provision for deferred taxes;  plus (d) payment of deferred taxes accrued in
any prior period.

         "Funding Date" means the date of each funding of a Loan.

         "GAAP" means generally accepted accounting  principles set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the  Financial   Accounting   Standards   Board  that  are   applicable  to  the
circumstances as of the date of determination.

 
                                        5
<PAGE>
         "Hazardous Material" means all or any of the following:  (a) substances
that are  defined  or listed  in,  or  otherwise  classified  pursuant  to,  any
Environmental  Laws  or  regulations  as  "hazardous   substances",   "hazardous
materials",  "hazardous  wastes",  "toxic  substances" or any other  formulation
intended  to  define,  list or  classify  substances  by reason  of  deleterious
properties such as ignitability,  corrosivity,  reactivity,  carcinogenicity, or
toxicity;  (b) oil,  petroleum or  petroleum  derived  substances,  natural gas,
natural gas liquids or synthetic gas and drilling  fluids,  produced  waters and
other wastes associated with the exploration, development or production of crude
oil,  natural gas or  geothermal  resources;  (c) any  flammable  substances  or
explosives  or any  radioactive  materials;  and  (d)  asbestos  in any  form or
electrical  equipment  which  contains any oil or  dielectric  fluid  containing
polychlorinated biphenyls.

         "Indebtedness",  as applied to any Person,  means without  duplication:
(a) all indebtedness  for borrowed money; (b) obligations  under leases which in
accordance  with GAAP constitute  Capital  Leases;  (c) notes payable and drafts
accepted   representing   extensions  of  credit  whether  or  not  representing
obligations for borrowed  money;  (d) any obligation owed for all or any part of
the deferred purchase price of property or services if the purchase price is due
more than six months from the date the obligation is incurred or is evidenced by
a note or similar written  instrument;  and (e) all indebtedness  secured by any
Lien on any property or asset owned or held by that Person regardless of whether
the  indebtedness  secured  thereby shall have been assumed by that Person or is
non recourse to the credit of that Person; provided,  however, that Indebtedness
shall not include trade payables incurred in the ordinary course of business.

         "Initial  Appraisal"  means  the  initial  appraisal  delivered  by the
Appraiser  with respect to the orderly  liquidation  value of all Initial  Owned
Engines and all Initial  Leased  Engines  pursuant to Section  3.1(N) hereof and
each subsequent appraisal delivered by the Appraiser with respect to the orderly
liquidation  value of each Newly  Acquired  Engine  pursuant  to Section  5.1(G)
hereof.

         "Initial  Borrowing  Base Engines" means each Engine listed on Schedule
1.1(F) hereto.

         "Initial  Engine  Lease"  means each  engine  lease  listed on Schedule
1.1(C) hereto.

         "Initial  Leased  Engines" means each of the Engines listed on Schedule
1.1(D) hereto.

         "Initial  Owned  Engines"  means each of the Engines listed on Schedule
1.1(E) hereto.

         "Intangible   Assets"  means  all  intangible  assets   (determined  in
conformity with GAAP)  including,  without  limitation,  goodwill,  Intellectual
Property,  licenses,  organizational costs,  deferred amounts,  covenants not to
compete, unearned income and restricted funds.

         "Intellectual Property" means all present and future designs,  patents,
patent  rights  and  applications  therefor,  trademarks  and  registrations  or
applications therefor, trade names, inventions,  copyrights and all applications
and registrations therefor, software or computer programs, license rights, trade
secrets, methods, processes, know-how, drawings,  specifications,  descriptions,
and  all  memoranda,  notes  and  records  with  respect  to  any  research  and


                                       6
<PAGE>
development,  whether now owned or hereafter  acquired,  all goodwill associated
with any of the  foregoing,  and  proceeds of all of the  foregoing,  including,
without limitation, proceeds of insurance policies thereon.

         "Interest  Expenses" means,  without  duplication,  for any period, the
following,  for Borrower and its  Subsidiaries  each calculated for such period:
interest expenses deducted in the determination of net income (excluding (i) the
amortization of fees and costs with respect to the transactions  contemplated by
this Agreement  which have been  capitalized as transaction  costs in accordance
with the provisions of subsection 1.2; and (ii) interest paid in kind).

         "Interest  Rate" has the meaning  assigned  to that term in  subsection
2.2(A).

         "Interest  Reserve" means, at any time, an interest reserve equal to at
least six (6) months interest computed upon the outstanding amount of all Loans,
including any Loans  requested by Borrower on the day of such  Interest  Reserve
computation.

         "Inventory"  means all "inventory" (as defined in the UCC),  including,
without  limitation,  finished goods,  raw materials,  work in process and other
materials and supplies used or consumed in a Person's business,  and goods which
are returned or repossessed.

         "Inventory  Report"  means a report  duly  executed  by an  officer  of
Borrower in form and substance satisfactory to Heller.

         "IRC" means the Internal  Revenue Code of 1986, as amended from time to
time,  and any  successor  statute  and all  rules and  regulations  promulgated
thereunder.

         "Key Man Insurance  Policy"  means that certain Key Man Life  Insurance
Policy  dated as of  December  16, 1997  issued by William  Penn Life  Insurance
Company of New York on the life of Thomas Prinzing,  the Chief Executive Officer
of  Borrower,  in  the  amount  of  $10,000,000,  naming  Agent  as  loss  payee
thereunder.

         "Lease Call  Option"  means any call option  provided  for in an Engine
Lease or other documentation  pertaining to such Leased Engine pursuant to which
any lessee or third party has the option to purchase such Leased Engine  subject
to such Engine Lease at an agreed upon date and price in the future.

         "Leased Engines" means each Initial Leased Engine and each Owned Engine
and Newly Acquired  Engine which is subjected to an Engine Lease with respect to
which an Assignment  of Lease  Agreement has been duly executed and delivered to
Agent.

         "Lender"  or  "Lenders"  has the  meaning  assigned to that term in the
preamble to this Agreement.
                                                        

                                        7
<PAGE>
         "Lender  Addition  Agreement"  means an agreement among Agent, a Lender
and such Lender's  assignee  regarding their  respective  rights and obligations
with respect to assignments of the Loans,  the  Commitments  and other interests
under this Agreement and the other Loan Documents  substantially  in the form of
Exhibit D.

         "Liabilities" shall have the meaning given that term in accordance with
GAAP and shall include Indebtedness.

         "Lien" means any lien, mortgage,  pledge, security interest,  charge or
encumbrance  of any kind,  whether  voluntary  or  involuntary,  (including  any
conditional  sale or other title  retention  agreement,  any lease in the nature
thereof, and any agreement to give any security interest).

         "Loan" or "Loans" means an advance or advances under the Revolving Loan
Commitment.

         "Loan  Documents"  means  this  Agreement,  the  Revolving  Notes,  the
Security Agreement, each Security Agreement Supplement, each Assignment of Lease
Agreement and all other instruments,  documents and agreements executed by or on
behalf of Borrower and delivered  concurrently herewith or at any time hereafter
to or  for  Agent  or any  Lender  in  connection  with  the  Loans,  and  other
transactions   contemplated  by  this  Agreement,  all  as  amended,   restated,
supplemented or modified from time to time.

         "Loan  Year"  means  each  period of  twelve  (12)  consecutive  months
commencing on the Closing Date and on each anniversary thereof.

         "Maintenance"   means,  with  respect  to  any  Engine,   any  off-wing
maintenance  or shop  visit,  whether  scheduled  or  unscheduled,  or any other
maintenance  involving  core  replacement,  replacement of life limited parts or
performance restoration.

         "Material  Adverse Effect" means a material adverse effect upon (a) the
business, operations,  prospects,  properties, assets or condition (financial or
otherwise)  of  Borrower on an  individual  basis or taken as a whole or (b) the
ability of Borrower to perform its obligations  under any Loan Document to which
it is a party  or of  Agent or any  Lender  to  enforce  or  collect  any of the
Obligations.

         "Maximum  Revolving Loan Amount" has the meaning  assigned to that term
in subsection 2.1(A).

         "Net Worth"  means,  as of any date,  the sum of the capital  stock and
additional paid-in capital plus retained earnings (or minus accumulated deficit)
calculated in conformity with GAAP.

                                        8

<PAGE>
         "Newly Acquired  Engine" means each engine  purchased by Borrower after
the Closing  Date and  preliminarily  approved by Agent  pursuant to  subsection
2.8(G)  hereof,  until such engine  becomes  either a Leased  Engine or an Owned
Engine.

         "Non-Borrowing Base Engine" means all Engines other than Owned Engines,
Leased  Engines  and Newly  Acquired  Engines  which are  subject  to a Security
Agreement.

         "Notice  of  Borrowing"  has  the  meaning  assigned  to  that  term in
subsection 2.1(B).

         "Obligations"  means all  obligations,  liabilities and indebtedness of
every nature of Borrower  from time to time owed to Agent or to any Lender under
the Loan  Documents  including  the  principal  amount of all debts,  claims and
indebtedness  (whether incurred before or after the Termination  Date),  accrued
and  unpaid  interest  and  all  fees,  costs  and  expenses,  whether  primary,
secondary, direct, contingent,  fixed or otherwise,  heretofore, now and/or from
time to time hereafter owing, due or payable including,  without limitation, all
interest,  fees,  cost and expenses  accrued or incurred after the filing of any
petition under any bankruptcy or insolvency law.

         "Owned Engines" means all Initial Owned Engines and each Newly Acquired
Engine owned by Borrower approved to be an "Owned Engine" by Agent and Appraiser
pursuant to subsection 2.8 hereof.

         "Parent Company" means,  collectively,  Continental Information Systems
Corporation,  a New  York  corporation,  and its  wholly-owned  subsidiary,  CIS
Corporation, a Delaware corporation.

         "Parent Company Debt" has the meaning specified in Section 7.1.

         "Permitted  Encumbrances" means the following types of Liens: (a) Liens
(other  than  Liens  relating  to  Environmental  Claims  or ERISA)  for  taxes,
assessments or other governmental charges not yet due and payable; (b) statutory
Liens of landlords,  carriers,  warehousemen,  mechanics,  materialmen and other
similar  liens  imposed by law,  which are  incurred in the  ordinary  course of
business  for sums not more than thirty (30) days  delinquent;  (c) Liens (other
than any Lien imposed by ERISA) incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other types of social security, statutory obligations,  surety and appeal bonds,
bids,   leases,   government   contracts,   trade  contracts,   performance  and
return-of-money  bonds and other similar  obligations  (exclusive of obligations
for the payment of borrowed money); (d) easements, rights-of-way,  restrictions,
and other  similar  charges or  encumbrances  not  interfering  in any  material
respect  with the  ordinary  conduct of the  business  of Borrower or any of its
Subsidiaries; and (e) Liens in favor of Agent, on behalf of Lenders.

         "Permitted Lessee" has the meaning specified in Section 7.17.

 
                                        9
<PAGE>
         "Person"  means and includes  natural  persons,  corporations,  limited
partnerships,   general  partnerships,   limited  liability  companies,  limited
liability  partnerships,  joint stock companies,  joint ventures,  associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations,  whether or not legal entities,  and governments and agencies and
political subdivisions thereof.

         "Pro Rata  Share"  means (a) with  respect  to  matters  relating  to a
particular  Commitment of a Lender, the percentage obtained by dividing (i) such
Commitment  of that Lender by (ii) all such  Commitments  of all Lenders and (b)
with respect to all other matters,  the percentage  obtained by dividing (i) the
Total  Loan  Commitment  of a Lender by (ii) the Total Loan  Commitments  of all
Lenders,  in either  case as such  percentage  may be  adjusted  by  assignments
permitted  pursuant to subsection 9.1; provided,  however,  if any Commitment is
terminated  pursuant  to the  terms  hereof,  then "Pro  Rata  Share"  means the
percentage  obtained  by  dividing  (x) the  aggregate  amount of such  Lender's
outstanding  Loans related to such Commitment by (y) the aggregate amount of all
outstanding Loans related to such Commitment.

         "Projections"    means   Borrower's    forecasted    consolidated   and
consolidating (to the extent deemed necessary by Agent): (a) balance sheets; (b)
profit and loss  statements;  (c) cash flow statements;  and (d)  capitalization
statements,  all prepared on a division by division and Subsidiary by Subsidiary
basis and otherwise consistent with Borrower's  historical financial statements,
together  with  appropriate  supporting  details and a statement  of  underlying
assumptions.

         "Quarterly  Appraisal" means each quarterly  appraisal delivered by the
Appraiser  to Agent with respect to the orderly  liquidation  value of all Owned
Engines and all Leased Engines as of the date thereof.

         "Reconciliation  Report"  means a report  duly  executed  by the  chief
executive officer or chief financial officer of Borrower appropriately completed
and in substantially the form of Exhibit E.

         "Requisite  Lenders"  means Lenders  holding or being  responsible  for
sixty-six and two-thirds  percent (66.66%) or more of the sum of (a) outstanding
Loans, and (b) unutilized Commitments.

         "Restricted  Payment"  means:  (a) any dividend or other  distribution,
direct or  indirect,  on account of any shares of any class of stock of Borrower
or any of its  Subsidiaries  now or  hereafter  outstanding,  except a  dividend
payable  solely  with  shares of the class of stock on which  such  dividend  is
declared;  or (b) any payment made to retire, or to obtain the surrender of, any
outstanding warrants,  options or other rights to acquire shares of any class of
stock of Borrower or any of its Subsidiaries now or hereafter outstanding.

         "Revolving  Advance"  means each advance made by Lender(s)  pursuant to
subsection 2.1(A).

 
                                       10
<PAGE>
         "Revolving  Loan"  means  the  outstanding  balance  of  all  Revolving
Advances and any amounts  added to the principal  balance of the Revolving  Loan
pursuant to this Agreement.

         "Revolving Loan Commitment" means (a) as to any Lender,  the commitment
of such Lender to make Revolving  Advances pursuant to subsection 2.1(A), in the
aggregate amount set forth on the signature page of this Agreement opposite such
Lender's  signature or in the most recent  Lender  Addition  Agreement,  if any,
executed by such Lender and (b) as to all Lenders,  the aggregate  commitment of
all Lenders to make Revolving Advances.

         "Revolving  Note"  means each  promissory  note of  Borrower  in a form
reasonably acceptable to Agent, issued pursuant to subsection 2.1(A).

         "Security  Agreements"  means  collectively,   the  Security  Agreement
(Engines) and the Aircraft Mortgage and Security Agreement.

         "Security  Agreement  (Engines)" means that certain Security  Agreement
(Engines) of even date herewith  between Borrower and Agent covering all Engines
and  spare  parts  of  Borrower,  as  the  same  may  be  amended,  modified  or
supplemented from time to time by Security Agreement Supplements.

         "Security  Agreement  Supplement" means each supplement to the Aircraft
Mortgage and Security Agreement and the Security Agreement (Engines).

         "Security  Deposit" means each security deposit provided to Borrower by
each lessee in connection with any Leased Engine.

         "Settlement  Date" has the meanings assigned to that term in subsection
9.6(A)(2).

         "Subsidiary"  means,  with  respect  to any  Person,  any  corporation,
association or other  business  entity of which more than fifty percent (50%) of
the  total  voting  power  of  shares  of  stock  (or  equivalent  ownership  or
controlling  interest)  entitled  (without  regard  to  the  occurrence  of  any
contingency) to vote in the election of directors,  managers or trustees thereof
is at the time owned or controlled,  directly or  indirectly,  by that Person or
one or more of the other subsidiaries of that Person or a combination thereof.

         "Tangible  Net Worth" of any Person  means an amount  equal to: (a) Net
Worth of such  Person;  less (b)  Intangible  Assets  of such  Person;  less (c)
prepaid expenses of any Person;  less (d) all obligations owed to such Person by
any Affiliate of such Person or any of its Subsidiaries;  and less (e) all loans
by such Person to its officers, stockholders, Subsidiaries or employees.

         "Termination  Date" means the date this  Agreement is terminated as set
forth in subsection 2.5.
                                                   
                                       11
<PAGE>
         "Total  Loan   Commitment"   means  as  to  any  Lender  the  aggregate
commitments of such Lender with respect to its Revolving Loan Commitment.

         "UCC" means the Uniform Commercial Code as in effect on the date hereof
in the  State of  Illinois,  as  amended  from time to time,  and any  successor
statute.

         "Working   Capital"  means:  (a)  current  assets;   less  (b)  current
liabilities;  and less (c) the amount of any obligations  owed to such Person or
any  of  its  Subsidiaries  by  any  Affiliate  of  such  Person  or  any of its
Subsidiaries  to the extent such  amount is  included  in the current  assets of
Borrower.

         1.2 Accounting  Terms.  For purposes of this Agreement,  all accounting
terms not  otherwise  defined  herein shall have the  meanings  assigned to such
terms in  conformity  with  GAAP.  Financial  statements  and other  information
furnished to Agent or any Lender pursuant to subsection 5.1 shall be prepared in
accordance  with  GAAP  (as in  effect  at the  time of such  preparation)  on a
consistent basis. In the event any "Accounting Changes" (as defined below) shall
occur and such changes affect  financial  covenants,  standards or terms in this
Agreement,  then Borrower and Lenders agree to enter into  negotiations in order
to amend such  provisions  of this  Agreement  so as to  equitably  reflect such
Accounting  Changes with the desired result that the criteria for evaluating the
financial  condition of Borrower shall be the same after such Accounting Changes
as if such Accounting  Changes had not been made, and until such time as such an
amendment  shall have been  executed and  delivered  by Borrower  and  Requisite
Lenders,  (A) all financial  covenants,  standards  and terms in this  Agreement
shall be calculated and/or construed as if such Accounting  Changes had not been
made, and (B) Borrower shall prepare  footnotes to each  Compliance  Certificate
and the financial  statements  required to be delivered  hereunder that show the
differences  between the  financial  statements  delivered  (which  reflect such
Accounting Changes) and the basis for calculating  financial covenant compliance
(without reflecting such Accounting  Changes).  "Accounting  Changes" means: (a)
changes in accounting  principles  required by GAAP and implemented by Borrower;
and (b) changes in accounting  principles  recommended  by Borrower's  certified
public accountants.

         1.3  Other   Definitional   Provisions.   References   to   "Sections",
"subsections",  "Exhibits" and  "Schedules"  shall be to Sections,  subsections,
Exhibits  and  Schedules,  respectively,  of  this  Agreement  unless  otherwise
specifically  provided.  Any of the terms defined in subsection 1.1 may,  unless
the context otherwise requires,  be used in the singular or the plural depending
on the  reference.  In this  Agreement,  words  importing any gender include the
other genders;  the words "including,"  "includes" and "include" shall be deemed
to be followed by the words "without  limitation";  references to agreements and
other contractual  instruments shall be deemed to include subsequent amendments,
assignments,  and  other  modifications  thereto,  but only to the  extent  such
amendments,  assignments and other modifications are not prohibited by the terms
of this  Agreement or any other Loan  Document;  references  to Persons  include
their  respective   permitted   successors  and  assigns  or,  in  the  case  of
governmental  Persons,  Persons  succeeding  to the  relevant  functions of such
Persons;  and all references to statutes and related  regulations  shall include
any amendments of same and any successor statutes and regulations.

 
                                       12
<PAGE>
                         SECTION 2. LOANS AND COLLATERAL

         2.1      Loans.

                  (A)  Revolving  Loan.  Subject to the terms and  conditions of
this  Agreement  and in reliance  upon the  representations  and  warranties  of
Borrower  set  forth  herein  and in the  other  Loan  Documents,  each  Lender,
severally,  agrees to lend to  Borrower  from time to time its Pro Rata Share of
each Revolving  Advance.  The aggregate amount of all Revolving Loan Commitments
shall not exceed at any time Ten  Million  Dollars  ($10,000,000)  as reduced by
subsection  2.4(B).  Amounts borrowed under this subsection 2.1(A) may be repaid
and  reborrowed at any time prior to the earlier of (i) the  termination  of the
Revolving Loan  Commitment  pursuant to subsection  8.3 or (ii) the  Termination
Date.  Except as otherwise  provided herein, no Lender shall have any obligation
to make an advance under this subsection 2.1(A) to the extent such advance would
cause the Revolving  Loan (after giving effect to any immediate  application  of
the proceeds thereof) to exceed the Maximum Revolving Loan Amount.

                           (1) "Maximum  Revolving Loan Amount" means, as of any
date of determination, the lesser of (a) the Revolving Loan Commitment(s) of all
Lenders minus the Interest  Reserve or (b) the Borrowing Base minus the Interest
Reserve.

                           (2)  "Borrowing  Base"  means,  as of the date of the
Initial  Appraisal  or the most recent  Quarterly  Appraisal,  whichever is more
recent,  an amount equal to the sum of (a) eighty  percent  (80%) of the orderly
liquidation value of the Initial Borrowing Base Engines,  plus each Owned Engine
and Leased Engine subsequently added to the Borrowing Base after the date hereof
in accordance with the terms and conditions  herein plus (b) fifty percent (50%)
of the orderly  liquidation  value of Newly Acquired  Engines minus (c) Security
Deposits held by Borrower for each Leased Engine;  provided,  however,  that (i)
for all Engines added to the  Borrowing  Base  following  the Closing Date,  the
amount  included  in the  Borrowing  Base  for  advancement  hereunder  for such
subsequently added Engine shall be limited to the original  acquisition price of
such Engine plus the amount of any subsequent  expenditures incurred by Borrower
on such Engine for shop visits;  (ii) in the event that any Permitted  Lessee is
in default  under any Engine  Lease for more than thirty (30) days,  such Leased
Engine  subject to such Engine Lease in default  shall no longer be eligible for
advancement  under the Borrowing Base; (iii) for all Leased Engines subject to a
Lease Call Option which may be exercised at any time within the next twelve (12)
months,  the amount advanced hereunder shall be limited to the lesser of 100% of
the amount of such Lease Call Option or 80% of the orderly  liquidation value of
such Leased Engine; and (iv) the orderly  liquidation value of all Engines to be
included in the  Borrowing  Base shall be reduced by the  estimated  cost of any
shop visit  until such time when the shop work is  completed  and such Engine is
inspected by the  Appraiser,  at which time the Engine value will be adjusted as
determined by the Appraiser; provided, however, that Borrower may use any excess
availability  under the  Borrowing  Base for the cost of such shop visit.  Agent
hereby agrees that it will consider amending the Borrowing Base in the future to
include eligible  receivables under terms and conditions  acceptable to Agent in
its sole discretion.


                                       13
<PAGE>
                  (B) Borrowing  Mechanics.  On any day when Borrower desires an
advance under this subsection 2.1,  Borrower shall give Agent telephonic  notice
of the proposed  borrowing  by 11:00 a.m.  Central time on the Funding Date of a
Loan,  which  notice (a "Notice of  Borrowing")  shall also specify the proposed
Funding Date (which shall be a Business Day). Any such  telephonic  notice shall
be  confirmed in writing on the same day.  Neither  Agent nor Lender shall incur
any liability to Borrower for acting upon any  telephonic  notice Agent believes
in good faith to have been given by a duly  authorized  officer or other  person
authorized to borrow on behalf of Borrower or for otherwise acting in good faith
under this  subsection  2.1(B).  Neither  Agent nor Lender will make any advance
pursuant to any telephonic notice unless Agent has also received the most recent
Borrowing Base Certificate and all other documents required under Section 5.1 by
11:00 a.m.  Central  time.  Each  Revolving  Advance  shall be deposited by wire
transfer in  immediately  available  funds in such  account as Borrower may from
time to time  designate  to Agent in  writing.  The  becoming  due of any amount
required to be paid under this  Agreement or any of the other Loan  Documents as
principal, accrued interest and fees shall be deemed irrevocably to be a request
by Borrower for a Base Rate Revolving Loan on the due date of, and in the amount
required to pay, such principal,  accrued interest and fees, and the proceeds of
each such Revolving Advance if made by Agent or any Lender shall be disbursed by
Agent or such Lender by way of direct  payment of the  relevant  obligation  and
confirmed in writing to Borrower.

                  (C)  Revolving  Notes.  Borrower  shall execute and deliver to
each Lender  with  appropriate  insertions  a  Revolving  Note to evidence  such
Lender's  Revolving  Loan  Commitment.  In  the  event  of an  assignment  under
subsection  9.1,  Borrower  shall,  upon  surrender  of the  assigning  Lender's
Revolving Note[s], issue new Revolving Notes to reflect the interest held by the
assigning Lender and its assignee.

                  (D) Evidence of Revolving  Loan  Obligations.  Each  Revolving
Advance shall be evidenced by this  Agreement,  the Revolving  Note with respect
thereto, and notations made from time to time by Agent in its books and records,
including  computer  records.  Agent  shall  record in its  books  and  records,
including computer records,  the principal amount of the Revolving Loan owing to
each  Lender  from time to time.  Agent's  books and  records  shall  constitute
presumptive evidence,  absent manifest error, of the accuracy of the information
contained  therein.  Failure by Agent to make any such  notation or record shall
not affect the  obligations of Borrower to Lenders with respect to the Revolving
Loans.

         2.2      Interest.

                  (A) Rate of  Interest.  The Loans  and all  other  Obligations
shall bear interest from the date such Loans are made or such other  Obligations
become  due to the date  paid at a rate per  annum  equal to the Base  Rate plus
one-quarter of one percent (1/4%) (the "Interest Rate").

 
                                       14

<PAGE>
         After the occurrence and during the  continuance of an Event of Default
(i) the  Loans and all  other  Obligations  shall,  at the  option of  Requisite
Lenders,  bear  interest at a rate per annum equal to two percent  (2%) plus the
applicable Interest Rate (the "Default Rate").

                  (B) Computation and Payment of Interest. Interest on the Loans
and all other  Obligations  shall be computed on the daily principal  balance on
the basis of a 360 day year for the actual  number of days elapsed in the period
during which it accrues.  In computing interest on any Loan, the date of funding
of the Loan  shall be  included;  and the date of  payment of such Loan shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's  interest  shall be paid on that Loan.  Interest  on the Loans and all
other  Obligations  shall be payable to Agent for benefit of Lenders  monthly in
arrears on the first day of each month,  on the date of any prepayment of Loans,
and at maturity, whether by acceleration or otherwise.

                  (C)  Interest  Laws.  Notwithstanding  any  provision  to  the
contrary contained in this Agreement or any other Loan Document,  Borrower shall
not be required to pay,  and neither  Agent nor any Lender shall be permitted to
collect,  any amount of  interest  in excess of the  maximum  amount of interest
permitted by  applicable  law  ("Excess  Interest").  If any Excess  Interest is
provided for or  determined  by a court of competent  jurisdiction  to have been
provided  for in this  Agreement  or in any other  Loan  Document,  then in such
event:  (1) the  provisions  of this  subsection  shall govern and control;  (2)
Borrower  shall not be  obligated  to pay any  Excess  Interest;  (3) any Excess
Interest that Agent or any Lender may have received  hereunder shall be, at such
Lender's  option,  (a)  applied as a credit  against the  outstanding  principal
balance of the  Obligations  or accrued and unpaid  interest  (not to exceed the
maximum amount permitted by law), (b) refunded to the payor thereof,  or (c) any
combination of the foregoing; (4) the interest rate(s) provided for herein shall
be  automatically  reduced to the maximum  lawful rate allowed from time to time
under applicable law (the "Maximum Rate"), and this Agreement and the other Loan
Documents  shall be deemed to have been and shall be,  reformed  and modified to
reflect such reduction; and (5) Borrower shall not have any action against Agent
or any Lender for any damages  arising out of the payment or  collection  of any
Excess  Interest.  Notwithstanding  the  foregoing,  if for any  period  of time
interest on any  Obligations  is  calculated at the Maximum Rate rather than the
applicable  rate under this  Agreement,  and  thereafter  such  applicable  rate
becomes  less  than the  Maximum  Rate,  the rate of  interest  payable  on such
Obligations  shall  remain at the  Maximum  Rate  until each  Lender  shall have
received  the amount of interest  which such Lender would have  received  during
such period on such Obligations had the rate of interest not been limited to the
Maximum Rate during such period.

         2.3      Fees.

                  (A) Closing Fee. On the Closing  Date,  Borrower  shall pay to
Agent,  for the  benefit of  Lenders,  a fee in an amount  equal to One  Hundred
Thousand Dollars ($100,000) (the "Closing Fee"), less the Fifty Thousand Dollars
($50,000) commitment fee actually paid by Borrower to Agent upon the issuance of
Agent's commitment letter.

 
                                       15
<PAGE>
                  (B)  Unused  Line Fee.  Borrower  shall pay to Agent,  for the
benefit of Lenders,  a fee in an amount equal to the Revolving  Loan  Commitment
less the sum of the average daily balance of the  Revolving  Loan  multiplied by
three-eights of one percent (0.375%) per annum, such fee to be calculated on the
basis of a 360 day year for the actual  number of days elapsed and to be payable
monthly in arrears on the first day of the first  month  following  the  Closing
Date and the first day of each month thereafter.

                  (C) Audit  Fees.  Borrower  agrees to pay to Agent for its own
account an audit fee for each  inspection  equal to $750 per  auditor per day or
any portion thereof, excluding all full days spent by Agent traveling to or from
Borrower's locations together with out of pocket expenses.

                  (D) Other Fees and Expenses.  Borrower shall pay to Agent, for
its own  account,  all charges  for  returned  items and all other bank  charges
incurred by Agent,  as well as Agent's  standard wire transfer  charges for each
wire transfer made under this Agreement.

         2.4      Payments and Prepayments.

                  (A) Manner and Time of Payment. In its sole discretion,  Agent
may charge interest and other amounts  payable  hereunder to the Revolving Loan,
all as set forth on Agent's books and records.  If Agent elects to bill Borrower
for any amount due hereunder,  such amount shall be immediately  due and payable
following  Borrower's  receipt of such bill with  interest  thereon as  provided
herein.  All payments made by Borrower with respect to the Obligations  shall be
made without  deduction,  defense,  setoff,  withholding  or  counterclaim.  All
payments to Agent hereunder shall,  unless otherwise  directed by Agent, be made
to Agent's Account or in accordance with  subsection 5.6.  Proceeds  remitted to
the Agent's  Accounts,  by wire transfer or otherwise,  shall be credited to the
Obligations on the day such proceeds were received.

                  (B)      Mandatory Prepayments.

                           (1) Overadvance.  At any time that the Revolving Loan
         exceeds the Maximum  Revolving Loan Amount,  Borrower shall immediately
         repay  the  Revolving  Loan  to the  extent  necessary  to  reduce  the
         principal  balance  to an  amount  equal to or less  than  the  Maximum
         Revolving Loan Amount.

                           (2) Proceeds of Asset Dispositions.  Immediately upon
         receipt by Borrower or any of its Subsidiaries of proceeds of any Asset
         Disposition  (in one or a series  of  related  transactions),  Borrower
         shall  prepay  the  Obligations  in an amount  equal to such  proceeds.
         Notwithstanding  the foregoing,  Borrower may use the proceeds from the
         sale of that certain 737-200  Airframe (Serial No. 19614) to pay Parent
         Company Debt in accordance with subsection 7.5 herein.

                           (3) Events of Loss with Respect to Collateral.  If an
         Event  of Loss (as  defined  in the  Security  Agreement)  occurs  with
         respect to any Engine, then:

 
                                       16
<PAGE>
                                    (a) the Borrowing  Base shall  automatically
         and without  action by the Agent be reduced by eighty percent (80%) (in
         the case of an Owned Engine or Leased  Engine) or fifty  percent  (50%)
         (in the case of a Newly Acquired Engine), as applicable, of the orderly
         liquidation  value  of  such  Engine  as set  forth  in the  applicable
         Appraisal; and

                                    (b) as more  particularly  set  forth in the
         Security Agreement  (Engines),  the Agent shall be paid directly by the
         applicable insurance carrier the proceeds of the insurance with respect
         to such Engine carried by the Borrower, as required by the terms of the
         Security Agreement  (Engines).  The proceeds of such insurance shall be
         applied by the Agent as follows:

                                    first,  to the extent  that (x) the  reduced
                  Borrowing  Base is less than (y) the  principal  amount of the
                  Revolving  Loan then  outstanding  hereunder,  then so much of
                  such  proceeds as shall be required to reduce the  outstanding
                  principal  amount  of  the  Revolving  Loan  then  outstanding
                  hereunder,  sufficiently  such  that the  amount  set forth in
                  clause  (y) above  shall be equal to or less than the  reduced
                  Borrowing  Base,  shall be  applied by the Agent in payment of
                  such principal  amount by paying such amount to the holders of
                  the then outstanding Revolving Notes on a pro rata basis; and

                                    second, any proceeds then remaining shall be
                  distributed to the Borrower;

                                    provided,  however, that no amounts shall be
                  disbursed  by the  Agent  to  Borrower  if at the time of such
                  disbursement a Default or Event of Default shall have occurred
                  and be  continuing,  in which event such amounts shall be held
                  by the Agent as security for the Indebtedness  owed hereunder,
                  to be applied  against such  Indebtedness  as and when due. At
                  such time as there  shall not be  continuing  any  Default  or
                  Event of  Default,  such  amounts  shall  be paid  over to the
                  Borrower,  to the extent  not  previously  applied  hereunder.
                  Furthermore,  to the extent there are  insufficient  insurance
                  proceeds to satisfy all amounts  payable  under  clause  first
                  above, the Borrower shall pay to the Agent the amount by which
                  such insurance proceeds are insufficient, to be distributed by
                  the Agent pursuant to this subsection 2.4(B)(3).

                  (C) Voluntary  Prepayments and Repayments.  Except as provided
in subsection  2.4(B),  Borrower's  Obligations may be prepaid or repaid in full
and not in part. Borrower may, at any time upon not less than three (3) Business
Days' prior notice to Agent, terminate the Revolving Loan Commitment.


 
                                       17
<PAGE>
                  (D) Payments on Business Days. Whenever any payment to be made
hereunder  shall be stated to be due on a day that is not a  Business  Day,  the
payment may be made on the next  succeeding  Business Day and such  extension of
time shall be included in the  computation of the amount of interest or fees due
hereunder.

         2.5 Term of this  Agreement.  This Agreement  shall be effective  until
December 19, 2000 (the "Termination  Date") unless earlier  terminated  pursuant
hereto.  The Commitments  shall (unless earlier  terminated)  terminate upon the
earlier of (i) the  occurrence of an event  specified in subsection  8.3 or (ii)
the Termination  Date. Upon  termination in accordance with subsection 8.3 or on
the Termination Date, all Obligations  shall become  immediately due and payable
without notice or demand. Notwithstanding any termination, until all Obligations
have been  fully  paid and  satisfied,  Agent,  on behalf of  Lenders,  shall be
entitled to retain security interests in and liens upon all Collateral, and even
after payment of all Obligations  hereunder,  Borrower's obligation to indemnify
Agent and each Lender in accordance with the terms hereof shall continue.

         2.6  Statements.  Agent shall render a monthly  statement of account to
Borrower within twenty (20) days after the end of each month.  Such statement of
account  shall  constitute  an account  stated  unless  Borrower  makes  written
objection thereto within thirty (30) days from the date such statement is mailed
to Borrower.  Borrower  promises to pay all of its  Obligations  as such amounts
become due or are declared due pursuant to the terms of this Agreement.

         2.7 Grant of Security  Interest.  To secure the payment and performance
of the  Obligations,  including all  renewals,  extensions,  restructurings  and
refinancings of any or all of the Obligations,  Borrower hereby grants to Agent,
on behalf of Lenders, a continuing  security interest,  lien and mortgage in and
to all right,  title and  interest  of  Borrower  in the  following  property of
Borrower,  whether now owned or existing  or  hereafter  acquired or arising and
regardless  of  where  located  (all  being  collectively  referred  to  as  the
"Collateral"):  (A) Accounts,  and all guaranties and security therefor, and all
goods and rights represented  thereby or arising therefrom  including the rights
of stoppage in transit,  replevin and  reclamation;  (B) Inventory;  (C) general
intangibles  (as defined in the UCC);  (D)  documents (as defined in the UCC) or
other receipts covering,  evidencing or representing  goods; (E) instruments (as
defined in the UCC);  (F) chattel paper (as defined in the UCC);  (G) Equipment;
(H) Intellectual  Property; (I) all deposit accounts of Borrower maintained with
any bank or financial institution; (J) all cash and other monies and property of
Borrower  in the  possession  or under the  control of Agent,  any Lender or any
participant;  (K) all  books,  records,  ledger  cards,  files,  correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain  information  relating to any of the property described
above or are  otherwise  necessary  or  helpful  in the  collection  thereof  or
realization  thereon;  (L) all Engines,  (M) all Engine Leases; (N) the Aircraft
and any leases thereof; and (O) proceeds of all or any of the property described
above,  including,  without  limitation,  the proceeds of any insurance policies
covering any of the above described property.


                                       18
<PAGE>
         2.8 Financing and  Acquisition of Newly Acquired  Engines and Aircraft.
From time to time during the term of this  Agreement,  Borrower may request that
one or more Engines owned by Borrower be included in the Borrowing  Base.  Prior
to the  inclusion  of an Engine  in the  Borrowing  Base,  Borrower  shall  have
provided the  following  documents  to Agent and the  Lenders,  each in form and
substance  acceptable to Agent:  (i) oral  confirmation  by the Appraiser of the
completion  of a  satisfactory  boroscope,  followed  by a  hard  copy  of  such
boroscope within ten (10) Business Days of such oral confirmation; (ii) FAA lien
search with respect to such Engine; (iii) full copies of such Engine's operating
history  and  maintenance  records  (which  shall  be  in  compliance  with  all
applicable FAA rules and regulations);  (iv)  documentation  evidencing title in
the name of Borrower and a Security Agreement (Engines) Supplement together with
such other  documentation  necessary  to perfect  the  Lenders'  first  priority
security interest in such Engine;  (v) the original bill of sale for such engine
to be held in trust by Agent;  (vi)  evidence of insurance  coverage as provided
herein and in the  Security  Agreement  (Engines)  (vii)  evidence  that Agent's
security  interest  on such  Engine has been  recorded  with the FAA in form and
substance  acceptable  to Agent,  and (viii) such other  documents  as Agent may
request.

         Following  satisfaction  of each  of the  above  items,  and  upon  the
Appraiser's  satisfactory  review of such items,  the Appraiser  shall provide a
preliminary  appraisal of the orderly  liquidation  value of such engine,  after
which such engine shall be a "Newly Acquired  Engine" and fifty percent (50%) of
such orderly  liquidation  value of such Newly Acquired Engine shall be eligible
for inclusion under the Borrowing Base.

         As soon as practicable following issuance of the preliminary appraisal,
and in any event within 30 days  thereafter,  the Appraiser shall conduct a full
appraisal of such Newly  Acquired  Engine at Borrower's  expense and,  following
such  appraisal,  issue  an  Appraisal  with  respect  to such  Engine.  If such
Appraisal is acceptable to Agent and Lenders,  such Newly Acquired  Engine shall
be deemed an Owned Engine and eighty  percent  (80%) of the orderly  liquidation
value of such Newly  Acquired  Engine shall be eligible for inclusion  under the
Borrowing Base.

         Borrower also may purchase an Engine or, in certain cases,  an aircraft
using Funds hereunder. Solely with respect to the purchase of such an Engine, to
the extent the  Borrowing  Base (x) without  inclusion of such Engine,  does not
provide sufficient availability to allow a Loan hereunder to fund such purchase,
but (y) with the  inclusion  of such Engine would have  availability  to allow a
Loan hereunder for a portion of such purchase  price,  then Borrower can deliver
the items set forth in the first  paragraph of this  subsection 2.8 prior to its
purchase of such Engine (provided,  however, that with respect to items (iv) and
(vi) of the first  paragraph  of  subsection  2.8,  Borrower  need only  provide
documentation  which  evidences  title will  simultaneously  vest in the name of
Borrower upon purchase of such Engine and evidence that the security interest in
such Engine has been submitted to the FAA for recording) and Borrower's purchase
of any Engine with a Loan  hereunder  and the inclusion of such Engine under the
Borrowing Base as a Newly Acquired Engine may take place concurrently.

         To the extent  Borrower  has excess  availability  under the  Borrowing
Base, Borrower may utilize such excess availability to purchase aircraft.  Prior
to, or simultaneously with, the


                                       19
<PAGE>
purchase of any aircraft utilizing excess availability hereunder, Borrower shall
have  provided  the  following  to  Agent,  in each  case in form and  substance
acceptable to Agent:  (i) a boroscope on each engine attached to the aircraft to
be financed;  (ii) FAA lien search with respect to such aircraft (including each
engine);  (iii) full copies of such aircraft's operating history and maintenance
records  (which  shall  be in  compliance  with all  applicable  FAA  rules  and
regulations);  (iv) documentation evidencing that title will vest in the name of
the Borrower  simultaneously  with the purchase of such aircraft together with a
security  agreement  and such  other  documentation  necessary  to  perfect  the
Lenders' first  priority  security  interest in such aircraft;  (v) the original
bill of sale for such  aircraft to be held in trust by Agent;  (vi)  evidence of
insurance  coverage  as  provided  herein  and  in the  aforementioned  security
agreement;  (vii) evidence that Agent's security  interest in such aircraft will
be recorded with the FAA in form and substance  acceptable to Agent;  and (viii)
such other  documents as Agent may request.  Borrower  agrees that such aircraft
will serve as Collateral for all of Borrower's  Obligations hereunder until such
time as Borrower  refinances such aircraft with an alternate  lender and Agent's
security interest has been released.

         2.9 Capital Adequacy and Other  Adjustments.  In the event Agent or any
Lender shall have determined that the adoption after the date hereof of any law,
treaty,  governmental (or  quasi-governmental)  rule,  regulation,  guideline or
order regarding capital adequacy,  reserve  requirements or similar requirements
or compliance by Agent or such Lender or any  corporation  controlling  Agent or
such Lender with any request or directive  regarding capital  adequacy,  reserve
requirements or similar requirements (whether or not having the force of law and
whether or not failure to comply  therewith  would be unlawful) from any central
bank or governmental  agency or body having  jurisdiction does or shall have the
effect of increasing the amount of capital,  reserves or other funds required to
be maintained by Agent or such Lender or any  corporation  controlling  Agent or
such Lender and thereby  reducing the rate of return on Agent's or such Lender's
or such  corporation's  capital as a consequence of its  obligations  hereunder,
then Borrower  shall from time to time within fifteen (15) days after notice and
demand  from such  Lender  (with a copy to Agent)  or Agent  (together  with the
certificate  referred  to in the next  sentence)  pay to  Agent  or such  Lender
additional  amounts  sufficient  to  compensate  Agent or such  Lender  for such
reduction.  A certificate as to the amount of such cost and showing the basis of
the computation of such cost submitted by Agent or any Lender to Borrower shall,
absent manifest error, be final, conclusive and binding for all purposes.

         2.10     Taxes.

                  (A) No Deductions. Any and all payments or reimbursements made
hereunder  or under  the  Revolving  Notes  shall be made  free and clear of and
without deduction for any and all taxes, levies, imposts, deductions, charges or
withholdings,  and all liabilities with respect thereto; excluding, however, the
following:  federal  or state  taxes  imposed on the net income of any Lender or
Agent  by the  jurisdiction  under  the laws of which  Agent or such  Lender  is
organized  or doing  business  or any  political  subdivision  thereof and taxes
imposed  on its net  income by the  jurisdiction  of  Agent's  or such  Lender's
applicable lending office or any political  subdivision thereof (all such taxes,
levies, imposts, deductions, charges or withholdings and all


                                       20
<PAGE>
liabilities  with respect  thereto  excluding  such taxes imposed on net income,
herein "Tax  Liabilities").  If Borrower  shall be required by law to deduct any
such Tax Liabilities from or in respect of any sum payable hereunder to Agent or
any  Lender,  then  the sum  payable  hereunder  shall  be  increased  as may be
necessary so that,  after making all required  deductions,  Agent or such Lender
receives  an  amount  equal  to the  sum it  would  have  received  had no  such
deductions been made.

                  (B) Changes in Tax Laws. In the event that,  subsequent to the
Closing  Date,  (i) any  changes  in any  existing  law,  regulation,  treaty or
directive or in the  interpretation  or application  thereof,  (ii) any new law,
regulation,  treaty or directive  enacted or any  interpretation  or application
thereof, or (iii) compliance by Lender with any request or directive (whether or
not  having  the  force  of law)  from any  governmental  authority,  agency  or
instrumentality:

                           (1) does or shall  subject Agent or any Lender to any
tax of any kind  whatsoever  with  respect  to this  Agreement,  the other  Loan
Documents  or any Loans  made  hereunder,  or change  the basis of  taxation  of
payments  to Agent or such  Lender of  principal,  fees,  interest  or any other
amount  payable  hereunder  (except for net income  taxes,  or  franchise  taxes
imposed in lieu of net income  taxes,  imposed  generally  by federal,  state or
local taxing  authorities  with respect to interest or  commitment or other fees
payable  hereunder  or changes in the rate of tax on the  overall  net income of
Agent or such Lender); or

                           (2) does or shall  impose on Agent or any  Lender any
other  condition  or  increased  cost  in  connection   with  the   transactions
contemplated  hereby  or  participations  herein;  and the  result of any of the
foregoing  is to  increase  the  cost to  Agent  or such  Lender  of  making  or
continuing  any Loan  hereunder,  as the case may be,  or to reduce  any  amount
receivable  hereunder,  then, in any such case,  Borrower  shall promptly pay to
Agent or such  Lender,  upon its demand,  any  additional  amounts  necessary to
compensate Agent or such Lender, on an after-tax basis, for such additional cost
or reduced amount receivable, as determined by Agent or such Lender with respect
to this  Agreement or the other Loan  Documents.  If Agent or any Lender becomes
entitled to claim any additional  amounts pursuant to this subsection,  it shall
promptly  notify  Borrower  of the event by reason of which Agent or such Lender
has become so entitled.  A  certificate  as to any  additional  amounts  payable
pursuant to the foregoing  sentence submitted by Agent or any Lender to Borrower
shall, absent manifest error, be final, conclusive and binding for all purposes.

                  (C) Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which payments
to be made under this  Agreement or under the Revolving  Note[s] are exempt from
United States withholding tax or are subject to United States withholding tax at
a reduced  rate  under an  applicable  statute or tax  treaty  shall  provide to
Borrower  and Agent (i) a  properly  completed  and  executed  Internal  Revenue
Service Form 4224 or Form 1001 or other applicable form, certificate or document
prescribed by the Internal Revenue Service of the United States certifying as to
such  Foreign  Lender's  entitlement  to  such  exemption  or  reduced  rate  of
withholding  with  respect to payments to be made to such  Foreign  Lender under
this Agreement or under the Revolving Notes, (a "Certificate of Exemption"),  or
(ii) a letter from any such  Foreign  Lender  stating that it is not entitled to

                                       21

<PAGE>
any such exemption or reduced rate of withholding (a "Letter of Non-Exemption").
Prior to becoming a Lender  under this  Agreement  and within  fifteen (15) days
after a  reasonable  written  request  of  Borrower  or Agent  from time to time
thereafter, each Foreign Lender that becomes a Lender under this Agreement shall
provide a Certificate of Exemption or a Letter of  Non-Exemption to Borrower and
Agent.

                  If a Foreign  Lender is entitled to an exemption  with respect
to payments to be made to such  Foreign  Lender  under this  Agreement  (or to a
reduced rate of withholding)  and does not provide a Certificate of Exemption to
Borrower and Agent within the time periods set forth in the preceding paragraph,
Borrower  shall  withhold  taxes from  payments  to such  Foreign  Lender at the
applicable  statutory  rates  and  Borrower  shall  not be  required  to pay any
additional amounts as a result of such withholding;  provided, however, that all
such  withholding  shall  cease  upon  delivery  by  such  Foreign  Lender  of a
Certificate of Exemption to Borrower and Agent.

         2.11 Optional  Prepayment/Replacement of Agent or Lenders in Respect of
Increased  Costs.  Within fifteen (15) days after receipt by Borrower of written
notice and demand from Agent or any Lender (an "Affected Lender") for payment of
additional  costs as provided in  subsection  2.9,  Borrower may, at its option,
notify  Agent  and  such  Affected  Lender  of  its  intention  to do one of the
following:

                  (A) Borrower may obtain, at Borrower's  expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement Lender
shall be  reasonably  satisfactory  to Agent.  In the event  Borrower  obtains a
Replacement  Lender within ninety (90) days following notice of its intention to
do so, the Affected  Lender shall sell and assign its Loans and  Commitments  to
such  Replacement  Lender  provided,  that Borrower has reimbursed such Affected
Lender for its increased costs for which it is entitled to  reimbursement  under
this Agreement through the date of such sale and assignment.

                  (B)  Borrower may prepay in full all  outstanding  Obligations
owed to such Affected Lender and terminate such Affected  Lender's  Commitments.
Borrower shall,  within ninety (90) days following notice of its intention to do
so, prepay in full all  outstanding  Obligations  owed to such  Affected  Lender
(including  such Affected  Lender's  increased costs for which it is entitled to
reimbursement  under this  Agreement  through  the date of such  prepayment  and
terminate such Affected Lender's Commitments.


                         SECTION 3. CONDITIONS TO LOANS

         3.1  Conditions to Loans.  The  obligations of Agent and each Lender to
make  Loans  on the  Closing  Date  and on each  Funding  Date  are  subject  to
satisfaction of all of the conditions set forth below.

 
                                       22
<PAGE>
                  (A) Closing Deliveries. Agent shall have received, in form and
substance  satisfactory  to Agent and Lenders,  all documents,  instruments  and
information  identified  on  Schedule  3.1(A) and all other  agreements,  notes,
certificates, orders, authorizations,  financing statements, mortgages and other
documents which Agent may at any time reasonably request.

                  (B) Security Interests.  Agent and Lenders shall have received
satisfactory evidence that all security interests and liens granted to Agent for
the benefit of Lenders  pursuant to this  Agreement,  the Aircraft  Mortgage and
Security Agreement,  the Security Agreement (Engines),  each Assignment of Lease
Agreement or the other Loan  Documents  have been duly  perfected and constitute
first priority liens on the Collateral, subject only to Permitted Encumbrances.

                  (C) Closing  Date  Availability.  After  giving  effect to the
consummation of the transactions  contemplated hereunder on the Closing Date and
the payment by Borrower of all costs, fees and expenses  relating  thereto,  the
Maximum  Revolving  Loan Amount on the Closing Date shall  exceed the  Revolving
Loan plus the Interest Reserve by at least $2,000,000.

                  (D)  Representations  and Warranties.  The representations and
warranties contained herein and in the Loan Documents shall be true, correct and
complete in all  material  respects on and as of that  Funding  Date to the same
extent as though made on and as of that date,  except for any  representation or
warranty  limited by its terms to a specific  date and taking  into  account any
amendments  to the  Schedules  or  Exhibits  delivered  pursuant  to  Section  4
hereunder.

                  (E) Closing Fee.  Borrower  shall have paid the Closing Fee on
the Closing Date.

                  (F) No Default. No event shall have occurred and be continuing
or would result from the  consummation  of the  requested  borrowing  that would
constitute an Event of Default or a Default.

                  (G)  Performance of Agreements.  Borrower shall have performed
in all material  respects all agreements and satisfied all conditions  which any
Loan Document provides shall be performed by it on or before that Funding Date.

                  (H) No Prohibition. No order, judgment or decree of any court,
arbitrator or  governmental  authority shall purport to enjoin or restrain Agent
or any Lender from making any Loans.

                  (I) No  Litigation.  There  shall  not be  pending  or, to the
knowledge of Borrower,  threatened,  any action,  charge,  claim,  demand, suit,
proceeding,  petition,  governmental investigation or arbitration by, against or
affecting Borrower or any of its Subsidiaries or any property of Borrower or any
of its Subsidiaries that has not been disclosed to Agent by Borrower in writing,
and there shall have occurred no development in any such action,  charge, claim,

 
                                       23
<PAGE>
demand, suit, proceeding,  petition,  governmental  investigation or arbitration
that, in the opinion of Agent,  would  reasonably be expected to have a Material
Adverse Effect.

                  (J) Other  Creditor  Agreements.  Borrower  shall have entered
into arrangements with its other lenders, in form and substance  satisfactory to
the Agent, evidencing that all such lenders have no interest in the Collateral.

                  (K) Assignment of Lease  Agreements.  Borrower and Agent shall
have entered  into an  Assignment  of Lease  Agreement  for each Initial  Leased
Engine and Initial  Engine Lease  whereby  Borrower  shall assign all  payments,
deposits,  letters of credit and prepayments associated with such lease to Agent
as security hereunder.

                  (L)  Insurance.   Agent  shall  have  received,  in  form  and
substance  satisfactory to Agent and Lenders,  (i) insurance policies or binders
of  Borrower  with  appropriate  endorsements  naming  Agent as Loss  Payee  and
additional insured, (ii) evidence of insurance and insurance certificates as are
required under the Security Agreement  (Engines),  and (iii) an executed copy of
the Key Man  Insurance  Policy naming Agent as Loss Payee,  it being  understood
that any proceeds of the Key Man Insurance  Policy which are paid to Agent shall
be applied first to Borrower's  Obligations  hereunder with any remaining sum to
be paid to Borrower.

                  (M)  Business  Plan.  Agent shall have  received,  in form and
substance  satisfactory  to Agent and  Lenders,  a  business  plan of  Borrower,
including  Projections  acceptable  in form and content to Agent.  Lenders shall
have the  ability  to  discuss  the  business  plan  with  Borrower's  operating
management,   and  be  satisfied  as  to  the   likelihood  of  its   successful
implementation.

                  (N)  Appraisals.  Agent shall have received the Appraisal with
respect to the orderly  liquidation  value and  condition of each Initial  Owned
Engine and each Initial Leased Engine prepared by the Appraiser.

                  (O)   Audit.   Completion   of  an   audit  by  Agent  or  its
representatives  of  Borrower's  business  operations,  financial  condition and
assets, including the opportunity to meet with Borrower's management.

                  (P) Release and Pay-off Letter. A UCC-3 termination  statement
and FAA release from Norwest  Business  Credit,  Inc.  with respect to all liens
previously filed on the assets of Borrower.

                  (Q)  Title  Search.  For all  Engines  to be  included  in the
Borrowing  Base on the Closing Date and all Engines to be added to the Borrowing
Base in the  future,  Agent  shall have  received an FAA lien search in form and
substance acceptable to Agent and Lender in its sole discretion.

 
                                       24
<PAGE>
                  (R) Acknowledgement of Assignment of Accounts Receivable. Each
of the  account  payors  listed on  Schedule  3.1(R) and all  account  payors of
Borrower  existing at any time after the  Closing  Date (the  "Account  Payors")
shall have delivered on Acknowledgement of Assignment of Accounts  Receivable in
the form of Exhibit F hereto pursuant to which each of such Account Payors shall
pay all amounts owed to Borrower to the Blocked Account.

                  (S) Collateral Records. All records relating to the Collateral
shall be forwarded to Borrower's  chief executive office on or prior to the date
hereof and stored in a  fire-proof  vault or locked  metal file  cabinet at such
office in accordance with subsection 5.4.

                  (T) Acknowledgment of Waiver of Broker's  Commission.  For all
Engines to be  included  in the  Borrowing  Base which are subject to a broker's
commission,  Borrower shall provide Lender with an acknowledgement,  in form and
substance  acceptable  to Agent,  executed  by such  broker  providing  that any
broker's  commission  shall be waived  upon any  default  or Event of Default by
Borrower under this Agreement.

                  (U)  Bank  Accounts.  Borrower  shall  have  established  bank
accounts in its name separate and apart from those of the Parent Company through
which all payments and  disbursements  relating to Borrower's  business shall be
made.

              SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES

         To induce Agent and each Lender to enter into this  Agreement,  to make
the Loans hereunder,  Borrower  represents and warrants to Agent and each Lender
that the following statements are and will be true, correct and complete:

         4.1      Organization, Powers, Capitalization.

                  (A)  Organization  and Powers.  Borrower is a corporation duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction of  incorporation  and qualified to do business in all states where
such qualification is required except where failure to be so qualified could not
be reasonably  expected to have a Material Adverse Effect.  The Borrower has all
requisite  corporate power and authority to own and operate its  properties,  to
carry on its business as now conducted and proposed to be conducted and to enter
into each Loan Document.

                  (B)  Capitalization.  The authorized capital stock of Borrower
is as set forth on Schedule 4.1(B). All issued and outstanding shares of capital
stock of the  Borrower  are duly  authorized  and  validly  issued,  fully paid,
nonassessable,  free and  clear of all  Liens  and such  shares  were  issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.  The capital stock of the Borrower is owned by the  stockholders and
in the amounts set forth on Schedule  4.1(B).  No shares of the capital stock of
Borrower,  other than those described above,  are issued and outstanding.  There
are no preemptive or other outstanding  rights,  options,  warrants,  conversion
rights or similar  agreements or understandings  for the purchase or acquisition


                                       25

<PAGE>
from  Borrower,  of any shares of capital stock or other  securities of any such
entity except as set forth on Schedule 4.1(B).

         4.2 Authorization of Borrowing, No Conflict. Borrower has the corporate
power and authority to incur the Obligations and to grant security  interests in
the Collateral. On the Closing Date, the execution,  delivery and performance of
the Loan  Documents by Borrower will have been duly  authorized by all necessary
action.  The  execution,  delivery  and  performance  by  Borrower  of each Loan
Document  to  which  it is a party  and  the  consummation  of the  transactions
contemplated  by this  Agreement and the other Loan Documents by Borrower do not
contravene and will not be in contravention of any applicable law, the corporate
charter or bylaws of Borrower  or any  agreement  or order by which  Borrower or
Borrower's  property is bound.  This Agreement is, and the other Loan Documents,
including  the  Revolving  Note[s],  when  executed and  delivered  will be, the
legally valid and binding obligations of the Borrower,  each enforceable against
the Borrower in accordance with their respective terms.

         4.3 Financial  Condition.  All historical  actual financial  statements
concerning  Borrower and its  Subsidiaries  which have been or will hereafter be
furnished by Borrower and its  Subsidiaries  to Agent or any Lender  pursuant to
this  Agreement  have  been  or  will  be  prepared  in  accordance   with  GAAP
consistently  applied  throughout  the  periods  involved  (except as  disclosed
therein) and do or will present  fairly the financial  condition of the Borrower
covered thereby as at the dates thereof and the results of their  operations for
the periods then ended. The Projections  delivered and to be delivered have been
and will be prepared by Borrower in light of the past operations of the business
of  Borrower  and its  Subsidiaries,  and such  Projections  represent  and will
represent  the  good  faith  estimate  of  Borrower  and its  senior  management
concerning  the  most  probable  course  of its  business  as of the  date  such
Projections are prepared and delivered.

         4.4 Indebtedness and Liabilities.  Except as disclosed on Schedule 4.4,
as of the Closing Date, neither Borrower nor any of its Subsidiaries has (a) any
Indebtedness  except  as  reflected  on the  most  recent  financial  statements
delivered to Agent and Lenders;  or (b) any Liabilities  other than as reflected
on the most recent  financial  statements  delivered  to Agent and Lenders or as
incurred  in the  ordinary  course of  business  following  the date of the most
recent financial statements delivered to Agent and Lenders.

         4.5 Account Warranties.  Borrower represents, warrants and covenants as
to each Account that, at the time of its creation,  the Account is a valid, bona
fide  account,  representing  an undisputed  indebtedness  incurred by the named
account debtor for goods actually sold and delivered or for services  completely
rendered; there are no setoffs, offsets or counterclaims,  genuine or otherwise,
against the Account;  the Account does not represent a sale to an Affiliate or a
consignment,  sale or return or a bill and hold transaction; no agreement exists
permitting  any  deduction or discount  (other than the  discount  stated on the
invoice);  Borrower  is the  lawful  owner of the  Account  and has the right to
assign the same to Agent, for the benefit of Lenders; the Account is free of all
security  interests,  liens and encumbrances other than those in favor of Agent,
on behalf of Lenders,  and the Account is due and payable in accordance with its
terms.

 
                                       26
<PAGE>
         4.6 Names.  Schedule 4.6 sets forth all names, trade names,  fictitious
names and business names under which Borrower currently conducts business or has
at any time during the past five years conducted business.

         4.7 Locations; FEIN. Schedule 4.7 sets forth the location of Borrower's
principal place of business,  the location of Borrower's books and records,  the
location of all other offices of Borrower and all Collateral locations, and such
locations are  Borrower's  sole  locations for its business and the  Collateral.
Borrower's federal employer  identification number is set forth on the signature
page hereof.

         4.8 Title to Properties;  Liens.  Borrower and each of its Subsidiaries
has good, sufficient and legal title, subject to Permitted Encumbrances,  to all
its respective material properties and assets including, without limitation, the
Collateral.  Except for Permitted  Encumbrances,  all such properties and assets
are free and  clear of  Liens.  To the best  knowledge  of  Borrower  after  due
inquiry, there are no actual, threatened or alleged defaults with respect to any
leases under which Borrower or any of its Subsidiaries is lessee or lessor which
would have a material adverse effect on Borrower.

         4.9  Litigation;  Adverse  Facts.  There are no  judgments  outstanding
against  Borrower or affecting any property of Borrower nor is there any action,
charge, claim, demand, suit, proceeding, petition, governmental investigation or
arbitration now pending or, to the best knowledge of Borrower after due inquiry,
threatened against or affecting Borrower or any property of Borrower which could
reasonably  be expected to result in any Material  Adverse  Effect other than as
set forth on  Schedule  4.9 hereof.  Borrower  has not  received  any opinion or
memorandum  or legal advice from legal  counsel to the effect that it is exposed
to any  liability  which could  reasonably be expected to result in any Material
Adverse Effect.

         4.10 Payment of Taxes. All material tax returns and reports of Borrower
and each of its  Subsidiaries  required  to be filed  by any of them  have  been
timely filed, and all taxes,  assessments,  fees and other governmental  charges
upon such  Persons  and upon their  respective  properties,  assets,  income and
franchises  which are shown on such  returns as due and  payable  have been paid
when due and payable.  As of the Closing Date,  none of the United States income
tax returns of Borrower or any of its Subsidiaries are under audit. No tax liens
have been filed and no claims (except as otherwise  permitted by subsection 5.9)
are being  asserted  with respect to any such taxes.  The charges,  accruals and
reserves on the books of Borrower and each of its Subsidiaries in respect of any
taxes or other governmental charges are in accordance with GAAP.

         4.11  Performance  of Agreements.  Neither  Borrower nor its respective
Subsidiaries is in default in the performance,  observance or fulfillment of any
of the  obligations,  covenants  or  conditions  contained  in  any  contractual
obligation of any such Person,  and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default which would
have a Material Adverse Effect on the Borrower.


                                       27
<PAGE>
         4.12 Employee  Benefit Plans.  Borrower,  each of its  Subsidiaries and
each  ERISA  Affiliate  is in  compliance  in all  material  respects  with  all
applicable  provisions of ERISA,  the IRC and all other  applicable laws and the
regulations  and  interpretations  thereof with respect to all Employee  Benefit
Plans. No material liability has been incurred by Borrower,  any Subsidiaries or
any ERISA Affiliate which remains unsatisfied for any funding obligation,  taxes
or penalties with respect to any Employee Benefit Plan.

         4.13 Intellectual Property. Borrower and each of its Subsidiaries owns,
is licensed to use or otherwise has the right to use, all Intellectual  Property
used in or necessary for the conduct of its business as currently conducted, and
all such Intellectual Property is identified on Schedule 4.13.

         4.14 Broker's  Fees. No broker's or finder's fee or commission  will be
payable with respect to any of the transactions  contemplated hereby,  except as
may be due and payable to Agent and Lender in connection with this Agreement.

         4.15  Environmental  Compliance.  Borrower has been and is currently in
compliance  with all  applicable  Environmental  Laws,  including  obtaining and
maintaining in effect all permits,  licenses or other authorizations required by
applicable Environmental Laws. There are no claims, liabilities, investigations,
litigation,  administrative  proceedings,  whether  pending  or  threatened,  or
judgments or orders relating to any Hazardous  Materials  asserted or threatened
against  Borrower or relating to any real property  currently or formerly owned,
leased or operated by Borrower.

         4.16 Solvency. After giving effect to the transactions  contemplated by
the Loan Documents, and from and after the date of this Agreement, Borrower: (a)
owns and will own assets the fair  salable  value of which are (i) greater  than
the total amount of its liabilities (including contingent  liabilities) and (ii)
greater than the amount that will be required to pay the probable liabilities of
Borrower as they  mature;  (b) has  capital  that is not  unreasonably  small in
relation  to  its  business  as  presently  conducted  or  any  contemplated  or
undertaken  transaction;  and (c) does not intend to incur and does not  believe
that it will incur  debts  beyond its  ability to pay such debts as they  become
due. There is no material fact contrary to the foregoing  known to Borrower that
has or could  have a  Material  Adverse  Effect  and  that  has not  been  fully
disclosed  herein  or in  such  other  documents,  certificates  and  statements
furnished  to Agent  or  Lenders  for use in  connection  with the  transactions
contemplated hereby.

         4.17 Disclosure.  No representation or warranty of Borrower, any of its
Subsidiaries  contained in this Agreement,  the financial statements,  the other
Loan  Documents,  or  any  other  document,  certificate  or  written  statement
furnished  to Agent or any Lender by or on behalf of any such  Person for use in
connection with the Loan Documents  contains any untrue  statement of a material
fact or omitted,  omits or will omit to state a material fact necessary in order
to make the  statements  contained  herein or therein not misleading in light of
the  circumstances  in which the same were made. The  Projections  and pro forma
financial  information  contained  in such  materials  are based upon good faith
estimates and assumptions  believed by such Persons to be reasonable at the time
made,  it being  recognized  by Agent and Lenders  that such  projections  as to
future events are not to be viewed as facts and that actual  results  during the
period or periods covered by any such  projections may differ from the projected
results.  There is no material fact contrary to the foregoing  known to Borrower
that  has had or will  have a  Material  Adverse  Effect  and  that has not been
disclosed  herein  or in  such  other  documents,  certificates  and  statements
furnished  to Agent or any Lender for use in  connection  with the  transactions
contemplated hereby.

 
                                       28
<PAGE>
         4.18  Insurance.  Borrower  and  each  of  its  Subsidiaries  maintains
adequate  insurance  policies  for  public  liability,  property  damage for its
business and properties, product liability, and business interruption, no notice
of cancellation has been received with respect to such policies and Borrower and
each of its Subsidiaries is in compliance with all conditions  contained in such
policies.

         4.19 Compliance with Laws. Neither Borrower nor any of its Subsidiaries
is in  violation  of  any  law,  ordinance,  rule,  regulation,  order,  policy,
guideline  or other  requirement  of any domestic or foreign  government  or any
instrumentality or agency thereof,  having  jurisdiction over the conduct of its
business or the ownership of its properties,  including, without limitation, any
violation  relating to any use, release,  storage,  transport or disposal of any
Hazardous  Material,  which  violation  would  subject  Borrower  or  any of its
Subsidiaries,  or any of their respective officers to criminal liability or have
a Material  Adverse  Effect and, to the best of  Borrower's  knowledge,  no such
violation has been alleged.

         4.20 Bank  Accounts.  Schedule 4.20 sets forth the account  numbers and
locations of all bank accounts of Borrower and its Subsidiaries.

         4.21 Subsidiaries. Borrower has no Subsidiaries other than as set forth
on Schedule 4.21.

         4.22 Employee  Matters.  Except as set forth on Schedule 4.22, (a) none
of Borrower's employees is subject to any collective bargaining  agreement,  (b)
no petition for  certification  or union election is pending with respect to the
employees of Borrower and no union or collective bargaining unit has sought such
certification  or recognition  with respect to the employees of Borrower and (c)
there are no strikes,  slowdowns, work stoppages or controversies pending or, to
the best knowledge of Borrower after due inquiry,  threatened  between  Borrower
and its  respective  employees,  other than employee  grievances  arising in the
ordinary course of business which could  reasonably be expected to have,  either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 4.22,  neither Borrower nor any of its Subsidiaries is subject to an
employment contract.

         4.23 Governmental  Regulation.  Borrower is not, or after giving effect
to any loan will be,  subject to  regulation  under the Public  Utility  Holding
Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940
or to any federal or state statute or  regulation  limiting its ability to incur
indebtedness for borrowed money.

 
                                       29
<PAGE>
         Borrower  may,  at any  time  and  from  time to time  and  subject  to
subsection 5.13, amend any one or more of the Schedules referred in this Section
4 and any  representation or warranty  contained herein which refers to any such
Schedule  shall  from and  after  the date of any such  amendment  refer to such
Schedule as so amended,  provided,  however,  that in no event may the  Borrower
amend any such Schedule if such amendment would reflect or evidence a Default or
Event of Default.


                        SECTION 5. AFFIRMATIVE COVENANTS

         Borrower  covenants and agrees that, so long as any of the  Commitments
hereunder  shall be in effect  and  until  payment  in full of all  Obligations,
unless  Requisite  Lenders shall  otherwise  give their prior  written  consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 5 applicable to such Person.

         5.1 Financial Statements and Other Reports. Borrower will maintain, and
cause each of its Subsidiaries to maintain,  a system of accounting  established
and  administered  in  accordance  with  sound  business   practices  to  permit
preparation  of financial  statements  in  conformity  with GAAP.  Borrower will
deliver to Agent and each Lender  (unless  specified to be  delivered  solely to
Agent) the financial statements and other reports described below.

                  (A) Monthly Financials.  As soon as available and in any event
within  twenty (20) days after the end of each month,  Borrower will deliver (1)
the consolidated and, if necessary,  consolidating balance sheet of Borrower and
its Subsidiaries as at the end of such month and the related  consolidated  and,
if necessary,  consolidating statements of income, stockholders' equity and cash
flow for such month and for the period from the  beginning  of the then  current
Fiscal  Year to the end of such  month,  and (2) a schedule  of the  outstanding
Indebtedness for borrowed money of Borrower and its  Subsidiaries  describing in
reasonable  detail each such debt issue or loan  outstanding  and the  principal
amount and amount of accrued and unpaid  interest with respect to each such debt
issue or loan.

                  (B) Year-End Financials. As soon as available and in any event
within  ninety  (90)  days  after the end of each  Fiscal  Year,  Borrower  will
deliver:  (1) the consolidated balance sheet of Borrower and its Subsidiaries as
at the end of such  year and the  related  consolidated  statements  of  income,
stockholders'  equity and cash flow for such Fiscal Year;  (2) a schedule of the
outstanding   Indebtedness  of  Borrower  and  its  Subsidiaries  describing  in
reasonable  detail each such debt issue or loan  outstanding  and the  principal
amount and amount of accrued and unpaid  interest with respect to each such debt
issue or loan; and (3) a report with respect to the financial  statements from a
firm of  independent  certified  public  accountants  selected by  Borrower  and
acceptable to Agent,  which report shall be  unqualified as to going concern and
scope of audit of Borrower  and its  Subsidiaries  and shall state that (a) such
consolidated  financial  statements  present fairly the  consolidated  financial
position of Borrower  and its  Subsidiaries  as at the dates  indicated  and the
results  of  their  operations  and  cash  flow  for the  periods  indicated  in
conformity with GAAP applied on a basis consistent with prior years and (b) that
the  examination  by such  accountants  in  connection  with  such  consolidated
financial  statements  has  been  made in  accordance  with  generally  accepted

 
                                       30
<PAGE>
auditing standards;  and (4) copies of the consolidating financial statements of
Borrower and its  Subsidiaries,  including (a)  consolidating  balance sheets of
Borrower  and  its  Subsidiaries  as at the  end of  such  Fiscal  Year  showing
intercompany  eliminations and (b) related consolidating  statements of earnings
of Borrower and its Subsidiaries showing intercompany eliminations.

                  (C) Accountants' Certification and Reports. Together with each
delivery of consolidated  financial  statements of Borrower and its Subsidiaries
pursuant to subsection 5.1(B),  Borrower will deliver (1) a written statement by
its independent  certified  public  accountants (a) stating that the examination
has  included  a  review  of the  terms  of this  Agreement  as same  relate  to
accounting matters and (b) stating whether,  in connection with the examination,
any  condition  or event that  constitutes  a Default or an Event of Default has
come to their  attention  and,  if such a  condition  or event has come to their
attention,  specifying  the  nature and period of  existence  thereof  and (2) a
letter  addressed to Agent and Lenders from such  accountants  stating that such
accountants have been informed that a primary intent of Borrower was to have the
professional  services such accountants  provided to Borrower in preparing their
audit report and the letter  referred to in this  subsection  5.1(C)  benefit or
influence Agent and Lenders,  and identifying  Agent and Lenders as parties that
Borrower has indicated intend to rely on such professional  services provided to
Borrower by such  accountants.  Promptly  upon receipt  thereof,  Borrower  will
deliver copies of all significant  reports  submitted to Borrower by independent
public  accountants in connection with each annual,  interim or special audit of
the financial  statements of Borrower  made by such  accountants,  including the
comment letter  submitted by such  accountants to management in connection  with
their annual audit.

                  (D) Compliance  Certificate.  On a quarterly  basis,  Borrower
will deliver a Compliance Certificate,  together with copies of the calculations
and all supporting  documentation utilized to determine Borrower's compliance or
noncompliance with the financial covenants set forth in Section 6.

                  (E) Borrowing Base  Certificates,  Registers and Journals.  On
the  first  Business  Day  of  each  month  (or  promptly  upon  receipt  of the
information  specified in (2) below),  Borrower  shall  deliver to Agent:  (1) a
Borrowing Base Certificate updated to reflect the most recent inventory of Owned
Engines,  Leased Engines and Newly Acquired Engines for the preceding month; (2)
an engine  utilization  report  detailing  the total  hours of use and the total
number of cycles of each Engine included in the Borrowing Base; and (3) a report
describing  all  Aircraft,  Newly  Acquired  Engines,  Leased  Engines and Owned
Engines  acquired during such preceding month, any terminations of Engine Leases
concerning  Leased  Engines and any  disposition of Collateral for the preceding
month, in form and substance  satisfactory to Agent, and copies of documentation
evidencing such acquisition, lease, or disposition of any Collateral.

                  (F)  Management   Report.   Together  with  each  delivery  of
financial  statements of Borrower and its Subsidiaries  pursuant to subdivisions
(A) and (B) of this subsection 5.1,  Borrower will deliver a management  report:
(i)  describing  the  operations  and  financial  condition  of Borrower and its


                                       31
<PAGE>
Subsidiaries for the month then ended and the portion of the current Fiscal Year
then  elapsed  (or for the  Fiscal  Year  then  ended  in the  case of  year-end
financials);  (ii) setting forth in comparative form the  corresponding  figures
for the corresponding  periods of the previous Fiscal Year and the corresponding
figures from the most recent  Projections  for the current Fiscal Year delivered
to  Lenders  pursuant  to  5.1(P);  and (iii)  discussing  the  reasons  for any
significant  variations.  The information above shall be presented in reasonable
detail and shall be certified by the chief financial  officer of Borrower to the
effect that such  information  fairly  presents  the results of  operations  and
financial condition of Borrower and its Subsidiaries as at the dates and for the
periods indicated.

                  (G)  Appraisals.  From time to time, upon the request of Agent
but not less than every four (4) months,  Appraiser will conduct,  at Borrower's
expense,  a  desktop  review  of  the  then  current  fair  market  and  orderly
liquidation  values of each Engine  included in the Borrowing Base. In addition,
at any time in Agent's sole  discretion,  Appraiser  will conduct full appraisal
reports of each Engine included in the Borrowing Base at Borrower's expense.

                  (H)  Government  Notices.   Borrower  will  deliver  to  Agent
promptly after receipt copies of all notices, requests, subpoenas,  inquiries or
other writings  received from any  governmental  agency  concerning any Employee
Benefit Plan, the violation or alleged violation of any Environmental  Laws, the
storage,  use or disposal of any  Hazardous  Material,  the violation or alleged
violation of the Fair Labor  Standards Act or Borrower's  payment or non-payment
of any taxes including any tax audit.

                  (I)  Events of  Default,  etc.  Promptly  upon any  officer of
Borrower  obtaining  knowledge  of any of the  following  events or  conditions,
Borrower  shall deliver a  certificate  of Borrower's  chief  executive  officer
specifying  the nature and period of  existence  of such  condition or event and
what action  Borrower  has taken,  is taking and  proposes to take with  respect
thereto:  (1) any  condition  or event that  constitutes  an Event of Default or
Default;  (2) any notice of default that any Person has given to Borrower or any
of its Subsidiaries or any other action taken with respect to a claimed default;
or (3) any Material Adverse Effect.

                  (J) Trade Names.  Borrower and each of its  Subsidiaries  will
give Agent at least  thirty (30) days  advance  written  notice of any change of
name or of any new trade name or fictitious business name. Borrower's use of any
trade  name or  fictitious  business  name will be in  compliance  with all laws
regarding the use of such names.

                  (K)  Locations.  Borrower will give Agent at least thirty (30)
days  advance  written  notice of any change in  Borrower's  principal  place of
business  or any  change  in  the  location  of its  books  and  records  or the
Collateral or of any new location for its books and records or the Collateral.

                  (L) Bank  Accounts.  Borrower will give Agent prompt notice of
any new bank accounts  Borrower or any of its Subsidiaries  intends to establish
prior to its opening same.


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<PAGE>
                  (M)  Litigation.  Promptly upon any officer of Borrower or its
subsidiaries  obtaining  knowledge of (1) the  institution of any action,  suit,
proceeding,  governmental  investigation  or  arbitration  against or  affecting
Borrower or any  property of Borrower  not  previously  disclosed by Borrower to
Agent  or  (2)  any  material  development  in  any  action,  suit,  proceeding,
governmental  investigation  or  arbitration  at any  time  pending  against  or
affecting  Borrower  or any  property  of Borrower  which  could  reasonably  be
expected to have a Material  Adverse Effect,  Borrower will promptly give notice
thereof  to Agent  and  provide  such  other  information  as may be  reasonably
available to them to enable Agent and its counsel to evaluate such matter.

                  (N)  Projections.  As soon as  available  and in any  event no
later than thirty  (30) days prior to the end of each  Fiscal Year of  Borrower,
Borrower will deliver  [consolidated and consolidating]  Projections of Borrower
and its Subsidiaries for the forthcoming  three Fiscal Years,  year by year, and
for the forthcoming Fiscal Year, month by month.

                  (O)  Other  Indebtedness  Notices.   Borrower  shall  promptly
deliver  copies of all notices  given or  received  by  Borrower  and any of its
Subsidiaries with respect to noncompliance with any term or condition related to
any  Indebtedness,  and shall promptly notify Lenders and Agent of any potential
or actual event of default with respect to any Indebtedness.

                  (P) Other Information.  With reasonable  promptness,  Borrower
will deliver  such other  information  and data with  respect to  Borrower,  any
Subsidiary of Borrower or the  Collateral as Agent or any Lender may  reasonably
request from time to time.

         5.2 Access to Accountants and Management. Borrower authorizes Agent and
Lenders to discuss the financial condition and financial  statements of Borrower
and  its  Subsidiaries  with  Borrower's  independent  public  accountants  upon
reasonable  notice to Borrower of its  intention to do so, and  authorizes  such
accountants to respond to all of Agent's and Lenders' inquiries. Each Lender may
with the consent of Agent,  which will not be unreasonably  denied,  confer with
Borrower's  management directly regarding  Borrower's  business,  operations and
financial condition.

         5.3  Inspection.  Upon two (2) days' advance written notice to Borrower
and at  reasonable  times,  Borrower  shall  permit  Agent  and  any  authorized
representatives  designated by Agent to visit and inspect any of the  properties
of Borrower or any of its  Subsidiaries,  including its and their  financial and
accounting records, and in conjunction with such inspection,  to make copies and
take  extracts  therefrom,  and to discuss its and their  affairs,  finances and
business with its and their officers and independent public accountants, at such
reasonable  times during normal business hours and as often as may be reasonably
requested.  Borrower acknowledges that Agent intends to make such inspections on
at least a  quarterly  basis.  Each  Lender may with the consent of Agent and of
Borrower,  which will not be  unreasonably  denied,  accompany Agent on any such
visit or inspection.

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<PAGE>
         5.4 Collateral Records. Borrower shall keep full and accurate books and
records  relating to the  Collateral  in English at its chief  executive  office
located at One North Concourse,  North Syracuse, New York 13212, in a fire-proof
vault or locked  metal file  cabinet  and shall  mark such books and  records to
indicate  Agent's  security  interests  in the  Collateral,  for the  benefit of
Lenders.

         5.5  Account  Covenants;  Verification.  Borrower  shall,  at  its  own
expense:  (a) cause all invoices  evidencing  Accounts and all copies thereof to
bear a notice that such  invoices are payable to the  lockboxes  established  in
accordance  with  subsection  5.6 and (b) use its best efforts to assure  prompt
payment of all amounts due or to become due under the  Accounts.  No  discounts,
credits or  allowances  will be  issued,  granted  or  allowed  by  Borrower  to
customers and no returns will be accepted without Agent's prior written consent;
provided,  that until Agent  notifies  Borrower to the  contrary,  Borrower  may
presume  consent.  Borrower  will  immediately  notify Agent in the event that a
customer alleges any dispute or claim with respect to an Account or of any other
circumstances  known to Borrower that may impair the validity or  collectibility
of an Account.  Agent shall have the right, at any time or times  hereafter,  to
verify the validity, amount or any other matter relating to an Account, by mail,
telephone  or in  person.  After  the  occurrence  of a  Default  or an Event of
Default,  Borrower shall not, without the prior consent of Agent, adjust, settle
or compromise the amount or payment of any Account,  or release wholly or partly
any customer or obligor thereof, or allow any credit or discount thereon.

         5.6  Collection of Accounts and Payments.  Borrower  shall  establish a
lockbox (the "Blocked  Account") in Borrower's name with such bank  ("Collecting
Bank") as is acceptable to Agent (subject to irrevocable instructions acceptable
to Agent as  hereinafter  set forth) to which (i) all lessees of Leased  Engines
shall  directly  remit all  payments  due under  any  Engine  Lease for a Leased
Engine,  (ii) all account debtors shall directly remit all payments on Accounts;
(iii)  all  proceeds  of  Inventory;  and (iv) all other  payments  constituting
proceeds of  Collateral  including,  but not limited to, the sale of any Engine,
shall be directly remitted in the identical form in which such payment was made,
whether by cash or check. The Collecting Bank shall  acknowledge and agree, in a
manner  satisfactory to Agent,  that all payments made to the Blocked Account is
the sole and exclusive  property of Agent, for the benefit of Lenders,  and that
the Collecting  Bank has no right of setoff against the Blocked Account and that
all such payments  received  will be promptly  transferred  to Agent's  Account.
Borrower  hereby  agrees that all payments  received by Agent,  whether by cash,
check,  wire transfer or any other  instrument,  made to such Blocked Account or
otherwise  received by Agent and whether on the Accounts or as proceeds of other
Collateral or otherwise  will be the sole and exclusive  property of Agent,  for
the  benefit of  Lenders,  which  shall be  utilized  for payment of any and all
amounts due and payable pursuant to this Agreement, with all remaining sums paid
to Borrower.  Borrower shall  irrevocably  instruct  Collecting Bank to promptly
transfer all payments or deposits to the Blocked  Account into Agent's  Account.
Borrower, and any of its Affiliates,  employees,  agents or other Persons acting
for or in concert with Borrower, shall, acting as trustee for Agent, receive, as
the sole and exclusive property of Agent, any monies,  checks,  notes, drafts or
any other payments  relating to and/or proceeds of Accounts or other  Collateral
which  come into the  possession  or under the  control  of  Borrower  or any of
Borrower's  Affiliates,  employees,  agents or other  Persons  acting  for or in


                                       34

<PAGE>
concert with Borrower,  and immediately upon receipt  thereof,  Borrower or such
Persons  shall remit the same or cause the same to be remitted,  in kind, to the
Blocked Account or to Agent at its address set forth in subsection 10.4 below to
be applied to  Borrower's  Obligations,  with any  remaining  sums  returned  to
Borrower.

         5.7 Endorsement. Borrower hereby constitutes and appoints Agent and all
Persons  designated  by Agent for that  purpose  as  Borrower's  true and lawful
attorney-in-fact,  with power to endorse  Borrower's name to any of the items of
payment or  proceeds  described  in  subsection  5.6 above and all  proceeds  of
Collateral that come into Agent's possession or under Agent's control.  Both the
appointment  of Agent as Borrower's  attorney and Agent's  rights and powers are
coupled with an interest and are irrevocable  until payment in full and complete
performance of all of the Obligations.

         5.8  Corporate  Existence.  Borrower  will,  and will cause each of its
Subsidiaries  to, at all times  preserve  and keep in full  force and effect its
corporate  existence  and all rights and  franchises  material to its  business.
Borrower  will promptly  notify Agent of any change in its or its  Subsidiaries'
ownership or corporate structure.

         5.9  Payment  of  Taxes.  Borrower  will,  and will  cause  each of its
Subsidiaries  to,  pay all taxes,  assessments  and other  governmental  charges
imposed upon it or any of its properties or assets or with respect to any of its
franchises,  business,  income or property  before any penalty  accrues  thereon
provided that no such tax need be paid if Borrower or one of its Subsidiaries is
contesting same in good faith by appropriate proceedings promptly instituted and
diligently  conducted  and  if  Borrower  or  such  Subsidiary  has  established
appropriate reserves as shall be required in conformity with GAAP.

         5.10  Maintenance of Properties;  Insurance.  Borrower will maintain or
cause to be maintained in good repair,  working order and condition all material
properties used in the business of Borrower and its  Subsidiaries  and will make
or cause to be made all appropriate repairs,  renewals and replacements thereof.
Borrower will maintain or cause to be  maintained,  with  financially  sound and
reputable insurers,  public liability and property damage insurance with respect
to  its  business  and  properties  and  the  business  and  properties  of  its
Subsidiaries  against loss or damage of the kinds and in the amounts customarily
carried or maintained by  corporations of established  reputation,  with similar
capitalization  and engaged in similar  businesses and in amounts  acceptable to
Agent,  including,  but not  limited to (i)  evidence of foreign  object  damage
coverage for all Engines subject to lease or in service, the necessity for which
will be determined by Agent in its sole discretion on a case by case basis; (ii)
insurance  coverage for all Engines in transit;  and (iii) records insurance for
all Engines. Borrower shall cause Agent, for the benefit of Lenders, to be named
as loss  payee on all  insurance  policies  relating  to any  Collateral  and as
additional  insured  under all  liability  policies,  in each case  pursuant  to
appropriate  endorsements in form and substance  satisfactory to Agent and shall
collaterally  assign to Agent,  for the benefit of Lenders,  as security for the
payment of the  Obligations  all  business  interruption  insurance of Borrower.

 
                                       35
<PAGE>
Borrower  shall apply any  proceeds  received  from any  policies  of  insurance
relating to any Collateral to the Obligations as set forth in subsection 2.4(B).

         5.11  Compliance  with Laws.  Borrower will, and will cause each of its
Subsidiaries  to, comply with the  requirements of all applicable  laws,  rules,
regulations and orders of any governmental  authority as now in effect and which
may be imposed in the future in all  jurisdictions  in which  Borrower or any of
its  Subsidiaries  is now doing  business  or may  hereafter  be doing  business
(including,  but not limited to, all FAA Airworthiness  Directives),  other than
those  laws the  noncompliance  with  which  would not have a  Material  Adverse
Effect.  Notwithstanding  the  foregoing,  for all Leased  Engines  or  Aircraft
subject  to a lease,  Borrower  shall  take  reasonable  precautions  to  ensure
compliance  with all FAA  Airworthiness  Directives by each Lessee by requiring,
among other things,  that each Lessee  represent that each Engine or aircraft on
lease  to such  entity  is  airworthy  and in  compliance  with  all  applicable
airworthiness  directives  in  connection  with  each  Lessee's  monthly  report
required to be delivered to Borrower. Borrower may rely on such lessee's monthly
report in order to satisfy its obligations hereunder.

         5.12 Further  Assurances.  Borrower shall,  and shall cause each of its
Subsidiaries  to, from time to time,  execute  such  financing  or  continuation
statements,  documents,  security  agreements,  reports and other  documents  or
deliver to Agent such  instruments,  certificates of title or other documents as
Agent at any time may  reasonably  request to  evidence,  perfect  or  otherwise
implement  security for  repayment of the  Obligations  provided for in the Loan
Documents. At Agent's request, Borrower shall cause any Subsidiaries of Borrower
promptly  to  guaranty  the  Obligations  and to grant to  Agent,  on  behalf of
Lenders,  security  interests in the real,  personal and mixed  property of such
Subsidiary to secure the Obligations.

         5.13  Collateral  Locations.  Other than Leased  Engines and  Aircraft,
Borrower will keep the  Collateral  at the locations  specified on Schedule 4.7.
With respect to any new location,  Borrower will execute such documents and take
such  actions as Agent deems  necessary  to perfect  and  protect  the  security
interests of the Agent,  on behalf of Lenders,  in the  Collateral  prior to the
transfer or removal of any Collateral to such new location.

         5.14 Bailees.  If any  Collateral  is at any time in the  possession or
control of any  warehouseman,  bailee or any of Borrower's agents or processors,
Borrower shall, upon the request of Lenders,  notify such warehouseman,  bailee,
agent or processor of the security  interests in favor of Agent, for the benefit
of  Lenders,  created  hereby and shall  instruct  such  Person to hold all such
Collateral for Agent's account subject to Agent's instructions.

         5.15 Use of  Proceeds  and  Margin  Security.  Borrower  shall  use the
proceeds of all Loans for proper business purposes (as described in the recitals
to this Agreement)  consistent  with all applicable  laws,  statutes,  rules and
regulations. No portion of the proceeds of any Loan shall be used by Borrower or
any of its  Subsidiaries  for the purpose of purchasing or carrying margin stock
within the meaning of  Regulation G or Regulation U, or in any manner that might
cause the borrowing or the application of such proceeds to violate  Regulation T


                                       36
<PAGE>
or Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act.

         5.16 Notification of Shop Visits and Movement of Engines. Borrower will
provide  Agent  with  thirty  (30)  days'  prior  written  notice (or such other
reasonable  amount of time as is  available  and  approved  by agent) of (i) all
scheduled  shop visits for each Engine  included in the Borrowing Base (together
with a copy of the  proposed  work  scope  and  estimated  cost);  and  (ii) any
movement of any Engine included in the Borrowing Base.


                         SECTION 6. FINANCIAL COVENANTS

         Borrower  covenants  and agrees that so long as any of the  Commitments
remain in effect and until payment in full of all  Obligations,  unless Borrower
has received the prior written  consent of Requisite  Lenders,  Borrower and its
Subsidiaries shall comply with all covenants in this Section 6.

         6.1 Tangible Net Worth.  Borrower shall at all times maintain  Tangible
Net Worth of at least $5,000,000.

         6.2 Fixed Charge  Coverage.  Borrower shall not permit its Fixed Charge
Coverage as of the end of any fiscal  quarter  calculated  on a rolling four (4)
quarter basis to be less than 1.0 to 1.


                          SECTION 7. NEGATIVE COVENANTS

         Borrower  covenants  and agrees that so long as any of the  Commitments
remain in effect  and until  indefeasible  payment  in full of all  Obligations,
unless  Borrower has received the prior  written  consent of Requisite  Lenders,
Borrower shall not and will not permit any of its subsidiaries to:

         7.1 Indebtedness and Liabilities. Directly or indirectly create, incur,
assume,  guaranty,  or otherwise become or remain directly or indirectly liable,
on a fixed or contingent basis, with respect to any Indebtedness except: (a) the
Obligations; (b) Indebtedness to the Parent Company existing on the Closing Date
and  identified on Schedule 7.1 (the "Parent  Company  Debt");  and (c) purchase
money security  interests in aircraft (or other security  interests  relating to
the financing of such  acquisition of such Aircraft)  secured solely by Aircraft
acquired  after  the date  hereof  which  are  utilized  in the  transaction  of
Borrower's  business.   Except  for  Indebtedness  permitted  in  the  preceding
sentence,  Borrower  will not, and will not permit any of its  Subsidiaries  to,
incur any  Liabilities  except for trade  payables  and normal  accruals  in the
ordinary  course of business  not yet due and  payable or with  respect to which
Borrower or any of its  Subsidiaries  is  contesting in good faith the amount or


                                       37
<PAGE>
validity  thereof by  appropriate  proceedings  and then only to the extent that
Borrower or any of its Subsidiaries has established  adequate reserves therefor,
if appropriate under GAAP.

         7.2  Guaranties.  Except for  endorsements  of  instruments or items of
payment for collection in the ordinary course of business, guaranty, endorse, or
otherwise in any way become or be responsible  for any  obligations of any other
Person, whether directly or indirectly by agreement to purchase the indebtedness
of any other Person or through the purchase of goods,  supplies or services,  or
maintenance of working  capital or other balance sheet  covenants or conditions,
or by way of  stock  purchase,  capital  contribution,  advance  or loan for the
purpose of paying or discharging  any  indebtedness  or obligation of such other
Person or otherwise.

         7.3      Transfers, Liens and Related Matters.

                  (A) Transfers. Sell, assign (by operation of law or otherwise)
or  otherwise  dispose  of,  or grant  any  option  with  respect  to any of the
Collateral,   except  that  Borrower  and  its   Subsidiaries   may  make  Asset
Dispositions if all of the following  conditions are met: (1) the  consideration
received is at least equal to the fair market value of such assets; (2) the sole
consideration  received is cash; (3) the net proceeds of such Asset  Disposition
are applied as required by  subsection  2.4(B);  (4) after giving  effect to the
sale or other  disposition of the assets included  within the Asset  Disposition
and the repayment of the Obligations with the proceeds  thereof,  Borrower is in
compliance  on a pro forma  basis  with the  covenants  set  forth in  Section 6
recomputed for the most recently ended month for which  information is available
and is in  compliance  with all other  terms and  conditions  contained  in this
Agreement;  and (5) no Default  or Event of  Default  shall then exist or result
from such sale or other disposition.

                  (B) Liens.  Except for  Permitted  Encumbrances,  directly  or
indirectly create,  incur, assume or permit to exist any Lien on or with respect
to any of the Collateral or any proceeds, income or profits therefrom.

                  (C) No Negative  Pledges.  Enter into or assume any  agreement
(other than the Loan  Documents)  prohibiting  the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired.

         7.4  Investments and Loans.  Make or permit to exist  investments in or
loans to any other  Person,  except:  (a) Cash  Equivalents;  (b)  customers  of
Borrower  in the  ordinary  course  of  Borrower's  business;  and (c) loans and
advances  to  employees  for  moving,  entertainment,  travel and other  similar
expenses in the ordinary course of business in an aggregate  outstanding  amount
not in excess of $25,000 at any time.

         7.5 Restricted  Payments.  Directly or indirectly declare,  order, pay,
make or set  apart  any sum for  Indebtedness  of  Borrower  other  than (a) the
Revolving  Loans;  (b) payments to be made on assets utilized in the transaction
of Borrower's  business secured solely by a purchase money security  interest in
such asset; (c)  distributions of Borrower's  property or assets in the ordinary
course of business; or (d) payments on the Parent Company Debt and dividends to

 
                                       38
<PAGE>
Parent Company; provided,  however, that no payments or dividends may be made to
Parent  Company (i) in excess of Borrower's  net income for any period;  (ii) in
the event the  shareholder's  equity of Borrower is less than  $5,800,000  after
giving  effect to such  payment or  dividend;  (iii) if an Event of Default  has
occurred and is  continuing  hereunder;  or (iv) in the event  Borrower does not
have  availability  under the Revolving Loan  Commitment in excess of $2,000,000
after giving effect to such payment or dividend.  Notwithstanding the foregoing,
Borrower may (x) subject to  compliance  with items (ii),  (iii) and (iv) above,
make a single  payment on the Parent  Company  Debt without  restriction  within
thirty (30) days of the date hereof;  and (y) subject to  compliance  with items
(ii),  (iii) and (iv) above,  utilize all of the proceeds  from the sale of that
certain 737-200 Airframe (Serial No. 19614) to pay Parent Company Debt.

         7.6 Restriction on Fundamental  Changes. (a) Enter into any transaction
of merger or consolidation; (b) liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution);  (c) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial  part of its business or assets,  or the capital stock of any of its
Subsidiaries,  whether  now  owned or  hereafter  acquired;  or (d)  acquire  by
purchase or otherwise all or any substantial  part of the business or assets of,
or stock or other evidence of beneficial ownership of, any Person.

         7.7 Transactions with Affiliates. Directly or indirectly, enter into or
permit to exist any  transaction  (including  the purchase,  sale or exchange of
property  or the  rendering  of any  service)  with  any  Affiliate  or with any
officer,  director or  employee  of  Borrower,  except for  transactions  in the
ordinary  course of and pursuant to the  reasonable  requirements  of Borrower's
business and upon fair and reasonable  terms which are fully  disclosed to Agent
and Lenders and which are no less  favorable to Borrower than it would obtain in
a comparable arm's length transaction with an unaffiliated Person.

         7.8 Environmental Liabilities. (a) Violate any applicable Environmental
Law;  (b)  dispose  of  any  Hazardous  Materials  (except  in  accordance  with
applicable  law)  into or onto or  from,  any real  property  owned,  leased  or
operated  by  Borrower;   or  (c)  permit  any  Lien  imposed  pursuant  to  any
Environmental Law to be imposed or to remain on any real property owned,  leased
or operated by Borrower.

         7.9 Conduct of Business. From and after the Closing Date, engage in any
business  other  than  businesses  of the type  engaged  in by  Borrower  or any
Subsidiary on the Closing Date.

         7.10 Compliance with ERISA.  Establish any new Employee Benefit Plan or
amend any existing Employee Benefit Plan if the liability or increased liability
resulting from such establishment or amendment is material. Neither Borrower nor
any  Subsidiary  shall fail to  establish,  maintain and operate  each  Employee
Benefit Plan in  compliance  in all material  respects  with the  provisions  of
ERISA,   the  IRC  and  all  other  applicable  laws  and  the  regulations  and
interpretations thereof.

 
                                       39
<PAGE>
         7.11  Tax  Consolidations.  File  or  consent  to  the  filing  of  any
consolidated  income tax return with any Person  other than the Parent  Company,
Borrower or any of its Subsidiaries.

         7.12 Subsidiaries. Establish, create or acquire any new Subsidiaries.

         7.13 Fiscal Year. Change its Fiscal Year.

         7.14 Press Release;  Public  Offering  Materials.  Disclose the name of
Agent or any Lender in any press release or in any  prospectus,  proxy statement
or other  materials  filed with any  governmental  entity  relating  to a public
offering of the capital stock of Borrower except as may be required by law.

         7.15  Bank  Accounts.  Establish  any new  bank  accounts,  or amend or
terminate any Blocked Account or lockbox agreement without Agent's prior written
consent.

         7.16  Dividends.  Pay  dividends  to  shareholders  (i)  in  excess  of
Borrower's net income for any period; (ii) in the event the shareholder's equity
of Borrower  is less than  $5,800,000  after  giving  effect to such  payment or
dividend;  or (iii) in the event Borrower does not have  availability  under the
Revolving  Loan  Commitment in excess of $2,000,000  after giving effect to such
payment or dividend;  provided, however, that Borrower may not pay any dividends
to the extent (x) any amount of Parent  Company Debt remains  outstanding or (y)
an Event of Default exists and is continuing hereunder.

         7.17 Lease of Owned Engines,  Newly Acquired Engines and Aircraft.  For
all Engines to be included  under the Borrowing  Base,  Borrower shall not enter
into a  lease  of any  Owned  Engine  or  Newly  Acquired  Engine  or  otherwise
relinquish  possession  thereof to anyone for any purpose  except with the prior
written  consent of Agent.  Any lease or  relinquishment  of possession  without
Agent's approval shall result in the applicable Engine immediately ceasing to be
part of the Borrowing  Base.  Any lessee  approved in writing by Agent is herein
called a "Permitted Lessee". In the event of any proposed lease,  Borrower shall
request such consent of Agent at least ten (10)  Business Days prior to the date
of such  proposed  lease.  Such request  shall be in writing and shall include a
proposed  copy of the  lease  documentation.  In the  event  of a  lease  to any
Permitted  Lessee,  (a) such lease shall  expressly  prohibit any  assignment or
further  leasing  of the  Engine or any rights  thereunder,  (b) such  Permitted
Lessee shall have  provided  hull and liability  insurance or  reinsurance  with
respect to the Engine,  (c) a boroscope  inspection  shall be performed upon the
return of each Leased Engine to Borrower (at Borrower's expense,  unless paid by
such  Permitted  Lessee),  (d) Borrower  shall  provide Agent with copies of all
documentation  filed  with  the  FAA  deemed  necessary  by  Agent  in its  sole
discretion to protect  Agent's and Borrower's  interest in the Leased Engine and
(e) all documentation required under this paragraph shall be acceptable to Agent
and  Lenders.  For all leases of  involving  carriers  other than Section 121 or
Section 129 certified air carriers,  Agent may, in its sole discretion,  require
an opinion of counsel (to be delivered prior to the  commencement of such lease)
in  connection  with any such lease,  including an  acceptable  opinion that (i)
Agent's first  priority  perfected  security  interest  shall not be divested by


                                       40
<PAGE>
virtue of such  lease and (ii)  that  Agent  will  possess  effective  rights to
repossess  the Engine  upon the  occurrence  of an Event of  Default  hereunder,
subject in each case to the rights of the lessee of any Leased Engine.  Borrower
shall pay to Agent,  within five (5) Business Days of  Borrower's  receipt of an
invoice  for the  same,  any and all  reasonable  costs  and  expenses  of Agent
(including legal fees and expenses) associated with any proposed lease.

         7.18 Brokerage Agreements. Enter into any arrangement or agreement with
any broker for the sale, lease of other disposition of any Engine to be included
in the  Borrowing  Base which does not provide  that all claims and payments due
and owing of such broker shall be subordinate to all claims,  liens and right of
payment of Agent and Lenders hereunder.


                     SECTION 8. DEFAULT, RIGHTS AND REMEDIES

         8.1 Event of Default.  "Event of Default"  shall mean the occurrence or
existence of any one or more of the following:

                  (A) Payment. Failure to make payment of any of the Obligations
when due and, in the case of interest,  such  failure  shall not be cured within
five (5) days of the applicable due date; or

                  (B)  Default in Other  Agreements.  (1) Failure of Borrower or
any of its  Subsidiaries  to pay  when  due any  principal  or  interest  on any
Indebtedness  (other than the  Obligations) or (2) breach or default of Borrower
or any of its  Subsidiaries  with  respect to any  Indebtedness  (other than the
Obligations);  if such failure to pay, breach or default  entitles the holder to
cause  such  Indebtedness  having an  individual  principal  amount in excess of
$100,000 or having an aggregate principal amount in excess of $250,000 to become
or be declared due prior to its stated maturity; or

                  (C)  Breach of Certain  Provisions.  Failure  of  Borrower  to
perform or comply with any term or condition  contained in  subsections  5.1 (A)
and (B), 5.3 or 5.6 or contained in Section 6 or Section 7; or

                  (D)  Breach  of  Warranty.   Any   representation,   warranty,
certification or other statement made by Borrower in any Loan Document or in any
statement or certificate at any time given by such Person in writing pursuant or
in  connection  with any Loan  Document is false in any material  respect on the
date made; or

                  (E) Other Defaults Under Loan Documents.  Borrower defaults in
the  performance  of or compliance  with any term contained in this Agreement or
the other Loan  Documents  and such  default is not  remedied  or waived  within
twenty (20) days after  receipt by Borrower of notice from Agent,  or  Requisite
Lenders of such default (other than occurrences described in other provisions of
this  subsection 8.1 for which a different  grace or cure period is specified or
which constitute immediate Events of Default); or

 
                                       41
<PAGE>
                  (F)  Change  in  Control.   Continental   Information  Systems
Corporation ceases to beneficially own and control, directly or indirectly,  one
hundred  percent  (100%) of the issued and  outstanding  shares of each class of
capital  stock of Borrower  entitled  (without  regard to the  occurrence of any
contingency)  to vote for the election of a majority of the members of the board
of directors of Borrower; or

                  (G) Involuntary Bankruptcy;  Appointment of Receiver, etc. (1)
A court  enters a decree or order for relief with  respect to Borrower or any of
its  Subsidiaries  in an  involuntary  case  under  any  applicable  bankruptcy,
insolvency  or other  similar law now or  hereafter  in effect,  which decree or
order is not stayed or other similar  relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following  events for
sixty (60) days unless dismissed,  bonded or discharged: (a) an involuntary case
is commenced against Borrower or any of its  Subsidiaries,  under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or (b) a
decree  or order  of a court  for the  appointment  of a  receiver,  liquidator,
sequestrator,  trustee,  custodian or other officer  having  similar powers over
Borrower or any of its Subsidiaries,  or over all or a substantial part of their
respective  property,  is entered; or (c) an interim receiver,  trustee or other
custodian  is  appointed   without  the  consent  of  Borrower  or  any  of  its
Subsidiaries,  for all or a substantial  part of the property of Borrower or any
such Subsidiary; or

                  (H) Voluntary Bankruptcy; Appointment of Receiver, etc. (1) An
order for relief is entered with respect to Borrower or any of its  Subsidiaries
or Borrower  or any of its  Subsidiaries  commences  a voluntary  case under any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect,  or consents to the entry of an order for relief in an involuntary  case
or to the conversion of an  involuntary  case to a voluntary case under any such
law or  consents  to the  appointment  of or taking  possession  by a  receiver,
trustee or other custodian for all or a substantial part of its property; or (2)
Borrower  or any of its  Subsidiaries  makes any  assignment  for the benefit of
creditors;  or (3) the board of directors of Borrower or any of its Subsidiaries
adopts any  resolution  or  otherwise  authorizes  action to approve  any of the
actions referred to in this subsection 8.1(H); or

                  (I) Liens.  Any lien,  levy or assessment is filed or recorded
with respect to or otherwise  imposed upon all or any part of the  Collateral or
the assets of Borrower or any of its  Subsidiaries  by the United  States or any
department or instrumentality  thereof or by any state, county,  municipality or
other  governmental  agency (other than Permitted  Encumbrances)  and such lien,
levy or assessment is not stayed,  vacated,  paid or discharged  within ten (10)
days after  written  notice  thereof is given to Borrower or Borrower  otherwise
becomes aware of such lien, levy or assessment; or

                  (J)  Judgment and  Attachments.  Any money  judgment,  writ or
warrant  of  attachment,  or  similar  process  involving  (1) an  amount in any
individual  case in excess of $100,000 or (2) an amount in the  aggregate at any
time in excess of $250,000 (in either case not  adequately  covered by insurance
as to which the insurance company has acknowledged coverage) is entered or filed
against Borrower or any of its  Subsidiaries or any of their  respective  assets


                                       42
<PAGE>
and remains undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days or in any  event  later  than  five (5) days  prior to the date of any
proposed sale thereunder; or

                  (K)  Dissolution.  Any  order,  judgment  or decree is entered
against Borrower or any of its Subsidiaries decreeing the dissolution or winding
up of  Borrower  or that  Subsidiary  and such  order  remains  undischarged  or
unstayed for a period in excess of sixty (60) days; or

                  (L) Solvency. Borrower ceases to be solvent (as represented by
Borrower in  subsection  4.16) or admits in writing  its present or  prospective
inability to pay its debts as they become due; or

                  (M)  Injunction.  Borrower  or  any  of  its  Subsidiaries  is
enjoined,  restrained  or in any way  prevented by the order of any court or any
administrative  or regulatory agency from conducting all or any material part of
its business and such order continues for more than thirty (30) days; or

                  (N)  Invalidity of Loan  Documents.  Any of the Loan Documents
for any  reason,  other than a partial or full  release in  accordance  with the
terms  thereof,  ceases to be in full force and effect or is declared to be null
and void, or Borrower  denies that it has any further  liability  under any Loan
Documents to which it is party, or gives notice to such effect; or

                  (O) Failure of Security. Agent, on behalf of Lenders, does not
have or ceases to have a valid and perfected first priority security interest in
the Collateral (subject to Permitted Encumbrances), in each case, for any reason
other than the  failure  of Agent or any  Lender to take any  action  within its
control; or

                  (P) Damage, Strike, Casualty. Any material damage to, or loss,
theft or destruction of, any Collateral,  whether or not insured, or any strike,
lockout, labor dispute,  embargo,  condemnation,  act of God or public enemy, or
other casualty which causes, for more than forty-five (45) consecutive days, the
cessation or  substantial  curtailment  of revenue  producing  activities at any
facility  of  Borrower  or  any  of  its  Subsidiaries  if  any  such  event  or
circumstance could reasonably be expected to have a Material Adverse Effect.

                  (Q) Licenses and Permits.  The loss,  suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired by
Borrower or any of its  Subsidiaries,  if such loss,  suspension,  revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect.

                  (R)  Forfeiture.  There  is  filed  against  Borrower  or  any
Guarantor any civil or criminal action,  suit or proceeding under any federal or
state  racketeering  statute  (including,   without  limitation,  the  Racketeer
Influenced  and  Corrupt  Organization  Act of  1970),  which  action,  suit  or
proceeding  (1) is not dismissed  within one hundred  twenty (120) days; and (2)
could result in the  confiscation  or forfeiture of any material  portion of the
Collateral.


                                       43
<PAGE>
                  (S)  Executive  Officer.   Any  change  in  the  president  of
Borrower, without the written consent of Agent, in its sole discretion.

         8.2  Suspension of  Commitments.  Upon the occurrence of any Default or
Event of Default,  notwithstanding  any grace period or right to cure, Agent may
or upon demand by Requisite Lenders shall, without notice or demand, immediately
cease making additional Loans and the Commitments  shall be suspended;  provided
that, in the case of a Default,  if the subject  condition or event is waived or
cured within any  applicable  grace or cure  period,  the  Commitments  shall be
reinstated.

         8.3 Acceleration. Upon the occurrence of any Event of Default described
in  the  foregoing   subsections   8.1(G)  or  8.1(H),   all  Obligations  shall
automatically become immediately due and payable,  without presentment,  demand,
protest or other  requirements  of any kind,  all of which are hereby  expressly
waived by Borrower,  and the  Commitments  shall thereupon  terminate.  Upon the
occurrence and during the continuance of any other Event of Default,  Agent may,
and upon demand by  Requisite  Lenders  shall,  by written  notice to  Borrower,
declare  all or any  portion  of the  Obligations  to be,  and  the  same  shall
forthwith  become,  immediately  due  and  payable  and  the  Commitments  shall
thereupon terminate.

         8.4  Remedies.  If any Event of  Default  shall  have  occurred  and be
continuing, in addition to and not in limitation of any other rights or remedies
available to Agent and Lenders at law or in equity, Agent may and shall upon the
request of Requisite Lenders exercise in respect of the Collateral,  in addition
to all other rights and remedies  provided for herein or otherwise  available to
it, all the  rights and  remedies  of a secured  party on default  under the UCC
(whether or not the UCC  applies to the  affected  Collateral)  and may also (a)
notify any or all  obligors  on the  Accounts to make all  payments  directly to
Agent;  (b) require Borrower to, and Borrower hereby agrees that it will, at its
expense  and  upon  request  of  Agent  forthwith,  assemble  all or part of the
Collateral  as directed by Agent and make it available to Agent at a place to be
designated by Agent which is reasonably convenient to both parties; (c) withdraw
all cash in the  Blocked  Accounts  and  apply  such  monies in  payment  of the
Obligations  in the manner  provided in  subsection  8.7; (d) without  notice or
demand or legal process, enter upon any premises of Borrower and take possession
of the Collateral;  and (e) without notice except as specified  below,  sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Agent's offices or elsewhere,  at such time or times, for cash, on
credit or for future  delivery,  and at such price or prices and upon such other
terms as Agent may deem  commercially  reasonable.  Borrower agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days notice to
Borrower  of the time and place of any public  sale or the time after  which any
private sale is to be made shall constitute reasonable notification. At any sale
of the  Collateral,  if permitted by law, Agent or any Lender may bid (which bid
may be, in whole or in part, in the form of  cancellation of  indebtedness)  for
the purchase of the  Collateral or any portion  thereof for the account of Agent
or such  Lender.  Agent shall not be  obligated  to make any sale of  Collateral
regardless of notice of sale having been given. Borrower shall remain liable for
any  deficiency.  Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice,  be made at the time and place to which it was so adjourned.  To

                                                     
                                       44
<PAGE>
the extent permitted by law, Borrower hereby  specifically  waives all rights of
redemption,  stay  or  appraisal  which  it has or may  have  under  any law now
existing or hereafter  enacted.  Agent shall not be required to proceed  against
any Collateral but may proceed against Borrower directly.

         8.5 Appointment of  Attorney-in-Fact.  Borrower hereby  constitutes and
appoints Agent as Borrower's  attorney-in-fact  with full authority in the place
and stead of Borrower and in the name of Borrower, Agent or otherwise, from time
to time in Agent's  discretion  while an Event of Default is  continuing to take
any action and to  execute  any  instrument  that  Agent may deem  necessary  or
advisable to accomplish the purposes of this Agreement,  including:  (a) to ask,
demand,  collect, sue for, recover,  compound,  receive and give acquittance and
receipts  for  moneys  due and to become  due under or in  respect of any of the
Collateral;  (b) to adjust,  settle or  compromise  the amount or payment of any
Account, or release wholly or partly any customer or obligor thereunder or allow
any credit or discount thereon; (c) to receive,  endorse, and collect any drafts
or other instruments, documents and chattel paper, in connection with clause (a)
above;  (d) to file any claims or take any action or institute  any  proceedings
that Agent may deem  necessary or  desirable  for the  collection  of any of the
Collateral  or otherwise to enforce the rights of Agent and Lenders with respect
to any of the Collateral;  and (e) to sign and endorse any invoices,  freight or
express  bills,  bills of lading,  storage or warehouse  receipts,  assignments,
verifications and notices in connection with the Collateral.  The appointment of
Agent as Borrower's  attorney and Agent's  rights and powers are coupled with an
interest and are irrevocable  until payment in full and complete  performance of
all of the Obligations.

         8.6 Limitation on Duty of Agent with Respect to Collateral.  Beyond the
safe custody  thereof,  Agent and each Lender shall have no duty with respect to
any  Collateral in its possession or control (or in the possession or control of
any agent or bailee) or with respect to any income  thereon or the  preservation
of rights against prior parties or any other rights  pertaining  thereto.  Agent
shall  be  deemed  to  have  exercised   reasonable  care  in  the  custody  and
preservation  of the  Collateral in its possession if the Collateral is accorded
treatment  substantially  equal to that which Agent  accords  its own  property.
Neither  Agent nor any  Lender  shall be liable or  responsible  for any loss or
damage to any of the Collateral,  or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman,  carrier,  forwarding agency,
consignee or other agent or bailee selected by Agent in good faith.

         8.7  Application  of  Proceeds.  Upon the  occurrence  and  during  the
continuance of an Event of Default, (a) Borrower irrevocably waives the right to
direct the  application of any and all payments at any time or times  thereafter
received by Agent from or on behalf of Borrower, and Borrower hereby irrevocably
agrees  that Agent  shall have the  continuing  exclusive  right to apply and to
reapply any and all payments  received at any time or times after the occurrence
and during the  continuance  of an Event of Default  against the  Obligations in
such manner as Agent may deem  advisable  notwithstanding  any previous entry by
Agent upon any books and records  and (b) the  proceeds of any sale of, or other
realization upon, all or any part of the Collateral shall be applied:  first, to
all fees,  costs and  expenses  incurred by Agent or any Lender with  respect to

                                       45

<PAGE>
this Agreement, the other Loan Documents or the Collateral;  second, to all fees
due and owing to Agent and  Lenders;  third,  all accrued  and unpaid  interest;
fourth, to the principal amounts of the Obligations  outstanding;  and fifth, to
any other indebtedness or obligations of Borrower owing to Agent or any Lender.

         8.8  License  of  Intellectual   Property.   Borrower  hereby  assigns,
transfers  and conveys to Agent,  for the benefit  Lenders,  effective  upon the
occurrence  of any  Event of  Default  hereunder,  the  non-exclusive  right and
license to use all Intellectual Property owned or used by Borrower together with
any goodwill associated  therewith,  all to the extent necessary to enable Agent
to realize on the  Collateral  and any successor or assign to enjoy the benefits
of the Col  lateral.  This right and  license  shall inure to the benefit of all
successors,  assigns and  transferees of Agent and its  successors,  assigns and
transferees,  whether by voluntary  conveyance,  operation  of law,  assignment,
transfer,  foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to Borrower by Agent.

         8.9 Waivers, Non-Exclusive Remedies. No failure on the part of Agent or
any Lender to exercise, and no delay in exercising and no course of dealing with
respect to, any right under this  Agreement  or the other Loan  Documents  shall
operate as a waiver thereof;  nor shall any single or partial  exercise by Agent
or any Lender of any right  under  this  Agreement  or any other  Loan  Document
preclude  any other or further  exercise  thereof or the  exercise  of any other
right.  The rights in this Agreement and the other Loan Documents are cumulative
and are not exclusive of any other remedies provided by law.


                     SECTION 9. ASSIGNMENT AND PARTICIPATION

         9.1      Assignments and Participations in Loans.

                  (A) Each  Lender  may  assign  its  rights  and  delegate  its
obligations  under this  Agreement to another  Person;  provided,  that (a) such
Lender  shall  first  obtain the  written  consent of Agent,  which shall not be
unreasonably  withheld, (b) the amount of Commitments and Loans of the assigning
Lender  being  assigned  shall  in no  event  be less  than  the  lesser  of (i)
$5,000,000  or (ii) the  entire  amount  of the  Commitments  and  Loans of such
assigning  Lender and (c)(i) each such assignment shall be of a pro rata portion
of all such assigning  Lender's Loans and  Commitments  hereunder,  and (ii) the
parties to such assignment shall execute and deliver to Agent for acceptance and
recording  a  Lender  Addition  Agreement  together  with (x) a  processing  and
recording  fee of  $2,500  payable  to  Agent  and  (y)  the  Revolving  Note[s]
originally  delivered  to  the  assigning  Lender.  Upon  receipt  of all of the
foregoing,  Agent shall notify  Borrower of such  assignment  and Borrower shall
comply with its obligations under the last sentence of subsection 2.1(D). In the
case of an assignment  authorized  under this subsection 9.1, the assignee shall
have,  to  the  extent  of  such  assignment,  the  same  rights,  benefits  and
obligations  as it would if it were a Lender  hereunder.  The  assigning  Lender


                                       46
<PAGE>
shall be relieved of its obligations hereunder with respect to its Commitment or
assigned  portion  thereof.  Borrower  hereby  acknowledges  and agrees that any
assignment will give rise to a direct obligation of Borrower to the assignee and
that the assignee shall be considered to be a "Lender".

                  (B) Each Lender may sell  participations in all or any part of
any Loans made by it to another  Person;  provided,  that all amounts payable by
Borrower  hereunder  shall be  determined  as if that  Lender  had not sold such
participation and the holder of any such participation  shall not be entitled to
require such Lender to take or omit to take any action  hereunder  except action
directly  effecting (a) any reduction in the principal amount,  interest rate or
fees payable with respect to any Loan in which such holder participates; (b) any
extension  of the  Termination  Date  or the  date  fixed  for  any  payment  of
principal,  interest  or fees  payable  with  respect  to any Loan in which such
holder participates;  and (c) any release of substantially all of the Collateral
(other  than in  accordance  with  the  terms  of  this  Agreement  or the  Loan
Documents).  Borrower hereby  acknowledges and agrees that the participant under
each  participation  shall for purposes of  subsections  2.8, 2.9, 2.10, 9.4 and
10.2 of this Agreement be considered to be a "Lender".

                  (C) Except as  otherwise  provided in this  subsection  9.1 no
Lender  shall,  as between  Borrower and that Lender,  be relieved of any of its
obligations  hereunder  as  a  result  of  any  sale,  assignment,  transfer  or
negotiation of, or granting of participation in, all or any part of the Loans or
other  Obligations owed to such Lender.  Each Lender may furnish any information
concerning  Borrower and its  Subsidiaries in the possession of that Lender from
time to time to assignees and participants  (including prospective assignees and
participants)  provided that the Persons  obtaining such  information  agrees to
maintain  the  confidentiality  of such  information  to the extent  required by
subsection 10.21.

                  (D)  Notwithstanding  any  other  provision  set forth in this
Agreement,  any Lender may at any time create a security  interest in all or any
portion of its rights under this Agreement (including,  without limitation,  the
Loans owing to it and the  Revolving  Note[s] held by it in favor of any Federal
Reserve Bank in  accordance  with  Regulation A of the Board of Governors of the
Federal Reserve System).

         9.2      Agent.

                  (A)  Appointment.  Each Lender hereby  designates and appoints
Heller as its agent under this Agreement and the Loan Documents, and each Lender
hereby  irrevocably  authorizes  Agent to take such  action or to  refrain  from
taking such action on its behalf under the  provisions of this Agreement and the
Loan  Documents  and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably  incidental thereto.  Agent is
authorized  and  empowered to amend,  modify,  or waive any  provisions  of this
Agreement  or the other  Loan  Documents  on behalf of  Lenders  subject  to the
requirement that certain of Lenders' consent be obtained in certain instances as
provided  in  subsection  9.3.  Agent  agrees  to act  as  such  on the  express
conditions  contained in this  subsection 9.2. The provisions of this subsection
9.2 are solely for the benefit of Agent and Lenders and Borrower  shall not have


                                       47
<PAGE>
any rights as a third party  beneficiary  of any of the  provisions  hereof.  In
performing its functions and duties under this Agreement, Agent shall act solely
as an administrative representative of Lenders and does not assume and shall not
be deemed to have assumed any  obligation  toward or  relationship  of agency or
trust  with or for  Lenders or  Borrower.  Agent may  perform  any of its duties
hereunder, or under the Loan Documents, by or through its agents or employees.

                  (B) Nature of Duties. Agent shall have no duties,  obligations
or responsibilities except those expressly set forth in this Agreement or in the
Loan Documents.  The duties of Agent shall be ministerial and  administrative in
nature.   Agent  shall  not  have  by  reason  of  this  Agreement  a  fiduciary
relationship  in  respect  of  any  Lender.  Each  Lender  shall  make  its  own
independent  investigation of the financial condition and affairs of Borrower in
connection  with the  extension  of  credit  hereunder  and  shall  make its own
appraisal of the credit worthiness of Borrower,  and Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other  information with respect thereto,  whether coming into
its possession  before the Closing Date or at any time or times  thereafter.  If
Agent seeks the  consent or approval of any Lenders to the taking or  refraining
from taking any action  hereunder,  then Agent shall send notice thereof to each
Lender.  Agent shall  promptly  notify each Lender any time that the  applicable
percentage  of  Lenders  have  instructed  Agent to act or refrain  from  acting
pursuant hereto.

                  (C) Rights,  Exculpation,  Etc.  Neither  Agent nor any of its
officers,  directors,  employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agent shall be obligated on the
terms set forth herein for performance of its express obligations hereunder, and
except that Agent shall be liable with  respect to its own gross  negligence  or
willful  misconduct.  Agent  shall  not  be  liable  for  any  apportionment  or
distribution of payments made by it in good faith and if any such  apportionment
or distribution  is subsequently  determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from  other  Lenders  any  payment  in  excess of the  amount to which  they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender  any such  erroneous  payments  received  by  them).  In  performing  its
functions  and duties  hereunder,  Agent shall  exercise  the same care which it
would in  dealing  with  loans  for its own  account,  but  Agent  shall  not be
responsible  to any  Lender for any  recitals,  statements,  representations  or
warranties herein or for the execution,  effectiveness,  genuineness,  validity,
enforceability,  collectability,  or sufficiency of this Agreement or any of the
Loan Documents or the transactions  contemplated  thereby,  or for the financial
condition  of  Borrower.  Agent  shall  not be  required  to  make  any  inquiry
concerning either the performance or observance of any of the terms,  provisions
or  conditions of this  Agreement or any of the Loan  Documents or the financial
condition of Borrower,  or the existence or possible existence of any Default or
Event of Default.  Agent may at any time request  instructions from Lenders with
respect to any actions or approvals  which by the terms of this  Agreement or of
any of the Loan  Documents  Agent is  permitted or required to take or to grant,
and Agent shall be  absolutely  entitled to refrain from taking any action or to
withhold  any approval and shall not be under any  liability  whatsoever  to any


                                       48
<PAGE>
Person for refraining  from any action or withholding  any approval under any of
the Loan  Documents  until it shall have  received  such  instructions  from the
applicable percentage of the Lenders.  Without limiting the foregoing, no Lender
shall  have any right of action  whatsoever  against  Agent as a result of Agent
acting or refraining  from acting under this  Agreement or any of the other Loan
Documents in accordance with the  instructions  of the applicable  percentage of
the Lenders and notwithstanding the instructions of Lenders, Agent shall have no
obligation  to take any action if it, in good faith  believes  that such  action
exposes Agent to any liability.

                  (D) Reliance. Agent shall be entitled to rely upon any written
notices,  statements,  certificates,  orders or other documents or any telephone
message or other  communication  (including  any  writing,  telex,  telecopy  or
telegram)  believed  by it in good faith to be genuine  and  correct and to have
been signed,  sent or made by the proper Person, and with respect to all matters
pertaining  to this  Agreement  or any of the  Loan  Documents  and  its  duties
hereunder or thereunder,  upon advice of counsel  selected by it. Agent shall be
entitled to rely upon the advice of legal counsel,  independent accountants, and
other experts selected by Agent in its sole discretion.

                  (E)  Indemnification.   Each  Lender,  severally,   agrees  to
reimburse  and  indemnify  Agent  for  and  against  any  and  all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses,  advances or disbursements of any kind or nature  whatsoever which may
be imposed on, incurred by, or asserted  against Agent in any way relating to or
arising out of this  Agreement or any of the Loan  Documents or any action taken
or  omitted by Agent  under this  Agreement  for any of the Loan  Documents,  in
proportion to each Lender's Pro Rata Share;  provided,  however,  that no Lender
shall be  liable  for any  portion  of such  liabilities,  obligations,  losses,
damages,  penalties,  actions,  judgments,  suits, costs, expenses,  advances or
disbursements resulting from Agent's gross negligence or willful misconduct. The
obligations of Lenders under this subsection 9.2(E) shall survive the payment in
full of the Obligations and the termination of this Agreement.

                  (F) Heller  Individually.  With respect to its Commitments and
the Loans made by it, and the Revolving  Note[s] issued to it, Heller shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations  and liabilities as and to the extent set forth herein for any other
Lender.  The terms "Lenders" or "Requisite  Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include Heller in its individual
capacity as a Lender or one of the Requisite Lenders.  Heller may lend money to,
and  generally  engage  in any kind of  banking,  trust or other  business  with
Borrower as if it were not acting as Agent pursuant hereto.


                                       49
<PAGE>
                  (G)      Successor Agent.

                           (1)  Resignation.  Upon  consent by  Borrower,  which
consent will not be unreasonably withheld, Agent may resign from the performance
of all its functions and duties  hereunder at any time by giving at least thirty
(30)  Business  Days' prior  written  notice to Borrower and the  Lenders.  Such
resignation  shall take  effect  upon the  acceptance  by a  successor  Agent of
appointment pursuant to clause (2) below or as otherwise provided below.

                           (2) Appointment of Successor. Upon any such notice of
resignation  pursuant to clause  (G)(1) above,  Requisite  Lenders  shall,  upon
receipt of Borrower's  prior consent which shall not  unreasonably  be withheld,
appoint a successor Agent. If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period,  the retiring Agent, upon notice to
Borrower,  shall then  appoint a successor  Agent who shall serve as Agent until
such time,  as Requisite  Lenders,  upon  receipt of  Borrower's  prior  written
consent which shall not be unreasonably  withheld,  appoint a successor Agent as
provided above.

                           (3)  Successor  Agent.  Upon  the  acceptance  of any
appointment  as Agent  under  the Loan  Documents  by a  successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights,  powers,  privileges and duties of the retiring Agent,  and the retiring
Agent  shall be  discharged  from its  duties  and  obligations  under  the Loan
Documents.  After  any  retiring  Agent's  resignation  as Agent  under the Loan
Documents,  the provisions of this  subsection 9.2 shall inure to its benefit as
to any  actions  taken or omitted to be taken by it while it was Agent under the
Loan Documents.

                  (H)      Collateral Matters.

                           (1) Release of Collateral. Lenders hereby irrevocably
authorize  Agent,  at its option  and in its  discretion,  to  release  any Lien
granted to or held by Agent upon any property  covered by this  Agreement or the
Loan  Documents  (i)  upon  termination  of  the  Commitments  and  payment  and
satisfaction  of all  Obligations;  (ii)  constituting  property  being  sold or
disposed of if Borrower  certifies to Agent that the sale or disposition is made
in compliance  with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate,  without further inquiry);  or (iii)
constituting property leased to Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been,  and is not  intended  by  Borrower  to be,  renewed  or
extended.  In addition  during any Fiscal Year (x) Agent may release  Collateral
having a book  value of not more than 10% of the book  value of all  Collateral,
(y) Agent, with the consent of Requisite Lenders,  may release Collateral having
a book  value of not more than 25% of the book value of all  Collateral  and (z)
Agent,  with the consent of Lenders having 90% of (i) the Total Loan Commitments
and (ii) Loans, may release all the Collateral.

                           (2) Confirmation of Authority; Execution of Releases.
Without in any manner limiting Agent's  authority to act without any specific or
further  authorization  or  consent  by  Lenders  (as set  forth  in  subsection
9.2(H)(1)),  each Lender agrees to confirm in writing, upon request by Borrower,
the  authority  to release any  property  covered by this  Agreement or the Loan

 
                                       50

<PAGE>
Documents conferred upon Agent under subsection  9.2(H)(1).  So long as no Event
of Default is then  continuing,  upon receipt by Agent of confirmation  from the
requisite percentage of Lenders, of its authority to release any particular item
or types of property  covered by this Agreement or the Loan Documents,  and upon
at least five (5) Business Days prior written  request by Borrower,  Agent shall
(and is hereby  irrevocably  authorized by Lenders to) execute such documents as
may be necessary  to evidence the release of the Liens  granted to Agent for the
benefit of Lenders  herein or pursuant  hereto upon such  Collateral;  provided,
however,  that (i) Agent shall not be  required to execute any such  document on
terms which, in Agent's  opinion,  would expose Agent to liability or create any
obligation  or entail  any  consequence  other  than the  release  of such Liens
without  recourse or  warranty,  and (ii) such  release  shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
Borrower, in respect of), all interests retained by Borrower, including, without
limitation,  the proceeds of any sale, all of which shall continue to constitute
part of the property covered by this Agreement or the Loan Documents.

                           (3) Absence of Duty.  Agent shall have no  obligation
whatsoever to any Lender or any other Person to assure that the property covered
by this  Agreement  or the Loan  Documents  exists or is owned by Borrower or is
cared for, protected or insured or has been encumbered or that the Liens granted
to Agent on behalf of Lenders  herein or pursuant  hereto have been  properly or
sufficiently  or  lawfully  created,  perfected,  protected  or  enforced or are
entitled to any particular priority,  or to exercise at all or in any particular
manner  or under  any duty of  care,  disclosure  or  fidelity,  or to  continue
exercising,  any of the rights,  authorities  and powers granted or available to
Agent  in this  subsection  9.2(H)  or in any of the  Loan  Documents,  it being
understood and agreed that in respect of the property  covered by this Agreement
or the Loan Documents or any act,  omission or event related thereto,  Agent may
act in any manner it may deem appropriate, in its discretion,  given Agent's own
interest in property  covered by this  Agreement or the Loan Documents as one of
the Lenders and that Agent shall have no duty or liability  whatsoever to any of
the other  Lenders;  provided,  that Agent shall exercise the same care which it
would in dealing with loans for its own account.

                  (I) Agency for  Perfection.  Each Lender hereby  appoints each
other Lender as agent for the purpose of perfecting  Lenders'  security interest
in Collateral which, in accordance with Article 9 of the Uniform Commercial Code
in any applicable jurisdiction,  can be perfected only by possession. Should any
Lender (other than Agent) obtain possession of any such Collateral,  such Lender
shall notify Agent thereof,  and, promptly upon Agent's request therefor,  shall
deliver such Collateral to Agent or in accordance with Agent's instructions.

                  (J) Exercise of Remedies.  Each Lender agrees that it will not
have any right  individually to enforce or seek to enforce this Agreement or any
Loan Document or to realize upon any collateral security for the Loans, it being
understood  and agreed that such rights and remedies  may be  exercised  only by
Agent.

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<PAGE>
         9.3      Consents.

                  (A) In the event  Agent  requests  the consent of a Lender and
does not receive a written  denial  thereof  within five (5) Business Days after
such Lender's  receipt of such request,  then such Lender will be deemed to have
given such consent.

                  (B) In the event  Agent  requests  the consent of a Lender and
such consent is denied,  then Heller may, at its option,  require such Lender to
assign  its  interest  in the  Loans  to  Heller  for a price  equal to the then
outstanding  principal  amount thereof plus accrued and unpaid interest and fees
due such  Lender,  which  interest  and fees  will be paid when  collected  from
Borrower.  In the event that  Heller  elects to require any Lender to assign its
interest  to  Heller,  Heller  will so  notify  such  Lender in  writing  within
forty-five (45) days following such Lender's denial, and such Lender will assign
its  interest  to Heller no later than five (5) days  following  receipt of such
notice.

         9.4 Set Off and Sharing of  Payments.  In addition to any rights now or
hereafter  granted under applicable law and not by way of limitation of any such
rights,  upon the occurrence and during the continuance of any Event of Default,
each Lender is hereby  authorized  by Borrower at any time or from time to time,
with reasonably prompt subsequent notice to Borrower or to any other Person (any
prior or contemporaneous notice being hereby expressly waived) to set off and to
appropriate  and to apply any and all (A)  balances  held by such Lender or such
holder  at any  of  its  offices  for  the  account  of  Borrower  or any of its
Subsidiaries  (regardless  of whether such  balances are then due to Borrower or
its  Subsidiaries),  and (B)  other  property  at any time held or owing by such
Lender or such holder to or for the credit or for the account of Borrower or any
of its Subsidiaries,  against and on account of any of the Obligations which are
not paid when due;  except that no Lender or any such holder shall  exercise any
such right  without the prior  written  consent of Agent.  Any Lender  which has
exercised  its right to set off shall,  to the extent the amount of any such set
off exceeds its Pro Rata Share of the  Obligations,  purchase  for cash (and the
other Lenders or holders shall sell)  participations in each such other Lender's
or holder's  Pro Rata Share of the  Obligations  as would be  necessary to cause
such Lender to share such excess with each other Lender or holder in  accordance
with their respective Pro Rata Shares.  Borrower  agrees,  to the fullest extent
permitted  by law,  that (a) any Lender or holder may  exercise its right to set
off with  respect to amounts in excess of its Pro Rata Share of the  Obligations
and may sell participations in such excess to other Lenders and holders, and (b)
any Lender or holder so  purchasing a  participation  in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such  Lender  or holder  were a direct  holder of Loans and other
Obligations in the amount of such participation.

         9.5  Disbursement of Funds.  Agent may, on behalf of Lenders,  disburse
funds to Borrower  for Loans  requested.  Each Lender shall  reimburse  Agent on
demand for all funds  disbursed on its behalf by Agent, or if Agent so requests,
each  Lender  will  remit to Agent its Pro Rata Share of any Loan  before  Agent
disburses  same to  Borrower.  If Agent  elects to  require  that  funds be made

 
                                       52
<PAGE>
available prior to  disbursement to Borrower,  Agent shall advise each Lender by
telephone,  telex or telecopy of the amount of such  Lender's  Pro Rata Share of
such requested Loan by no later than 1:00 p.m.  Central time on the Funding Date
for Base Rate Loans, and each such Lender shall pay Agent such Lender's Pro Rata
Share of such  requested  Loan,  in same day funds,  by wire transfer to Agent's
account not later than 3:00 p.m. Central time for Base Rate Loans. If any Lender
fails to pay the amount of its Pro Rata Share  forthwith  upon  Agent's  demand,
Agent shall promptly notify Borrower,  and Borrower shall immediately repay such
amount to Agent. Any repayment required pursuant to this subsection 9.5 shall be
without premium or penalty.  Nothing in this subsection 9.5 or elsewhere in this
Agreement  or  the  other  Loan  Documents,  including  without  limitation  the
provisions of subsection  9.6, shall be deemed to require Agent to advance funds
on behalf of any Lender or to relieve any Lender from its  obligation to fulfill
its Commitments  hereunder or to prejudice any rights that Agent or Borrower may
have against any Lender as a result of any default by such Lender hereunder.

         9.6      Settlements, Payments and Information.

                  (A)      Revolving Advances and Payments; Fee Payments.

                           (1) The Revolving  Loan may fluctuate from day to day
through Agent's  disbursement of funds to, and receipt of funds from,  Borrower.
In order to minimize the  frequency of transfers of funds between Agent and each
Lender  notwithstanding  terms  to the  contrary  set  forth  in  Section  2 and
subsection 9.5,  Revolving  Advances and repayments may be settled  according to
the  procedures   described  in  subsection  9.6(A)(2)  and  9.6(A)(3)  of  this
Agreement.  Notwithstanding  these procedures,  each Lender's obligation to fund
its Pro Rata Share of any advances  made by Agent to Borrower  will  commence on
the date such  advances are made by Agent.  Such  payments  will be made by such
Lender without set-off, counterclaim or reduction of any kind.

                           (2) Once each  week,  or more  frequently  (including
daily), if Agent so elects (each such day being a "Settlement Date"), Agent will
advise each Lender by 1 p.m.  Central time by telephone,  telex,  or telecopy of
the amount of each such  Lender's Pro Rata Share of the  Revolving  Loan. In the
event  payments are necessary to adjust the amount of such Lender's share of the
Revolving Loan to such Lender's Pro Rata Share of the Revolving  Loan, the party
from which such  payment is due will pay the other,  in same day funds,  by wire
transfer to the other's  account  not later than 3:00 p.m.  Central  time on the
Settlement Date.

                           (3)  On  the  first   Business   Day  of  each  month
("Interest  Settlement  Date"),  Agent will  advise  each  Lender by  telephone,
telefax or telecopy of the amount of interest and fees charged to and  collected
from Borrower for the proceeding  month.  Provided that such Lender has made all
payments required to be made by it under this Agreement,  Agent will pay to such
Lender,  by wire transfer to such Lender's  account (as specified by such Lender
on the signature  page of this  Agreement as amended by such Lender from time to


                                       53
<PAGE>
time after the date hereof pursuant to the notice provisions contained herein or
in the applicable Lender Addition  Agreement) not later than 3 p.m. Central time
on the Interest Settlement Date such Lender's share of such interest and fees.


                  (B) Availability of Lender's Pro Rata Share.

                           (1) Unless Agent has been  notified by a Lender prior
to a Funding Date of such  Lender's  intention not to fund its Pro Rata Share of
the Loan amount  requested by  Borrower,  Agent may assume that such Lender will
make such amount  available to Agent on the Funding Date or the next  Settlement
Date, as applicable.  If such amount is not, in fact, made available to Agent by
such  Lender when due,  Agent will be entitled to recover  such amount on demand
from such Lender without set-off, counterclaim or deduction of any kind.

                           (2) Nothing  contained in this subsection 9.6(B) will
be deemed to relieve a Lender of its obligation to fulfill its Commitments or to
prejudice  any rights Agent or Borrower may have against such Lender as a result
of any default by such Lender under this Agreement.

                  (C) Return of Payments.

                           (1) If Agent  pays an amount to a Lender  under  this
Agreement in the belief or expectation  that a related  payment has been or will
be received by Agent from  Borrower and such related  payment is not received by
Agent,  then Agent will be  entitled  to recover  such  amount  from such Lender
without set-off, counterclaim or deduction of any kind.

                           (2) If Agent  determines  at any time that any amount
received by Agent under this  Agreement  must be returned to Borrower or paid to
any  other   person   pursuant  to  any  solvency   law  or   otherwise,   then,
notwithstanding any other term or condition of this Agreement, Agent will not be
required to  distribute  any portion  thereof to any Lender.  In addition,  each
Lender  will repay to Agent on demand any  portion of such amount that Agent has
distributed  to such Lender,  together  with  interest at such rate,  if any, as
Agent is  required to pay to Borrower  or such other  Person,  without  set-off,
counterclaim or deduction of any kind.

         9.7  Dissemination of Information.  Agent will provide Lenders with any
information  received by Agent from Borrower which is required to be provided to
a Lender hereunder; provided, however, that Agent shall not be liable to Lenders
for any failure to do so, except to the extent that such failure is attributable
to Agent's gross negligence or willful misconduct.


                            SECTION 10. MISCELLANEOUS

         10.1  Expenses and  Attorneys'  Fees.  Whether or not the  transactions
contemplated  hereby shall be  consummated,  Borrower agrees to promptly pay all
reasonable fees, costs and expenses incurred by Agent and each of the Lenders in
connection with any matters  contemplated by or arising out of this Agreement or

 
                                       54
<PAGE>
the other Loan Documents  including the following,  and all such fees, costs and
expenses shall be part of the Obligations,  payable on demand and secured by the
Collateral:  (a) fees, costs and expenses (including reasonable attorneys' fees,
allocated  costs of  internal  counsel  and fees of  environmental  consultants,
accountants  and other  professionals  retained by Agent) incurred in connection
with the examination,  review,  due diligence  investigation,  documentation and
closing of the financing arrangements evidenced by the Loan Documents; (b) fees,
costs and expenses  (including  reasonable  attorneys' fees,  allocated costs of
internal  counsel and fees of environmental  consultants,  accountants and other
professionals  retained  by  Agent)  incurred  in  connection  with the  review,
negotiation,   preparation,    documentation,    execution,   syndication,   and
administration  of the Loan Documents,  the Loans, and any amendments,  waivers,
consents,   forbearances  and  other  modifications   relating  thereto  or  any
subordination or intercreditor agreements; (c) fees, costs and expenses incurred
by Agent in creating, perfecting and maintaining perfection of Liens in favor of
Agent, on behalf of Lenders;  (d) fees, costs and expenses  incurred by Agent in
connection with  forwarding to Borrower the proceeds of Loans including  Agent's
or any Lenders' standard wire transfer fee; (e) fees,  costs,  expenses and bank
charges,  including bank charges for returned  checks,  incurred by Agent or any
Lender in  establishing,  maintaining  and handling lock box  accounts,  blocked
accounts or other accounts for collection of the  Collateral;  (f) fees,  costs,
expenses (including  reasonable  attorneys' fees and allocated costs of internal
counsel) of Agent or any Lender and costs of  settlement  incurred in collecting
upon or enforcing  rights  against the  Collateral  or incurred in any action to
enforce this  Agreement  or the other Loan  Documents or to collect any payments
due from Borrower under this Agreement or any other Loan Document or incurred in
connection  with any  refinancing or  restructuring  of the credit  arrangements
provided  under  this  Agreement,  whether in the  nature of a  "workout"  or in
connection with any insolvency or bankruptcy proceedings or otherwise.

         10.2  Indemnity.  In addition  to the  payment of expenses  pursuant to
subsection 10.1,  whether or not the transactions  contemplated  hereby shall be
consummated,  Borrower  agrees to indemnify,  pay and hold Agent and each Lender
and the officers, directors,  employees, agents, consultants,  auditors, persons
engaged by Agent or any Lender to evaluate or monitor the Collateral, affiliates
and  attorneys  of Agent,  Lender  and such  holders  (collectively  called  the
"Indemnitees")  harmless from and against any and all liabilities,  obligations,
losses, damages,  penalties,  actions, judgments, suits, claims, costs, expenses
and  disbursements  of any kind or nature  whatsoever  (including the reasonable
fees and  disbursements  of counsel for such  Indemnitees in connection with any
investigative,  administrative or judicial  proceeding  commenced or threatened,
whether or not such Indemnitee  shall be designated a party thereto) that may be
imposed on,  incurred  by, or asserted  against that  Indemnitee,  in any manner
relating to or arising out of this  Agreement or the other Loan  Documents,  the
consummation of the transactions  contemplated by this Agreement, the statements
contained in the commitment  letters,  if any, delivered by Agent or any Lender,
Agent's and each  Lender's  agreement  to make the Loans  hereunder,  the use or
intended use of the proceeds of any of the Loans or the exercise of any right or
remedy   hereunder  or  under  the  other  Loan  Documents   (the   "Indemnified
Liabilities");  provided that Borrower shall have no obligation to an Indemnitee
hereunder  with  respect  to  Indemnified  Liabilities  arising  from the  gross
negligence or willful  misconduct of that Indemnitee as determined by a court of
competent jurisdiction.

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<PAGE>
         10.3     Amendments and Waivers.

                  (A)  Except  as  otherwise   provided  herein,  no  amendment,
modification,  termination  or waiver of any provision of this  Agreement or any
Loan Document,  or consent to any departure by Borrower therefrom,  shall in any
event be  effective  unless the same shall be in writing and signed by Requisite
Lenders or Agent,  as  applicable;  provided,  that no amendment,  modification,
termination or waiver shall, unless in writing and signed by all Lenders, do any
of the  following:  (i) increase the  Commitment of any Lender;  (ii) reduce the
principal  of,  rate of interest on or fees  payable  with  respect to any Loan;
(iii)  extend the  scheduled  due date of any  installment  of  principal of the
Loans;  (iv) change the percentage of the Commitments or of the aggregate unpaid
principal  amount of the Loans,  or the  percentage  of Lenders  which  shall be
required for Lenders or any of them to take any action  hereunder;  (v) amend or
waive  this  subsection  10.3  or the  definitions  of the  terms  used  in this
subsection  10.3  insofar  as the  definitions  affect  the  substance  of  this
subsection 10.3; (vi) consent to the assignment or other transfer by Borrower of
any of its rights and  obligations  under any Loan Document;  and (vii) increase
the  percentages  contained in the  definition  of Borrowing  Base and provided,
further,  that no amendment,  modification,  termination or waiver affecting the
rights  or  duties  of Agent  under  any  Loan  Document  shall in any  event be
effective,  unless in writing  and signed by Agent,  in  addition to the Lenders
required herein above to take such action.

                  (B) Each amendment, modification,  termination or waiver shall
be  effective  only in the specific  instance  and for the specific  purpose for
which it was given. No amendment,  modification,  termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.

                  (C) No  notice  to or demand  on  Borrower  in any case  shall
entitle  Borrower  to any other or further  notice or demand in similar or other
circumstances.  Any  amendment,  modification,  termination,  waiver or  consent
effected in  accordance  with this  subsection  10.3 shall be binding  upon each
Lender, and, if signed by Borrower, on Borrower.

                  (D) In the event Agent  waives (1) any Default  arising  under
subsection  8.1(E) as a result of the breach of any of the provisions of Section
5 of this  Agreement  (other than any such breach which  constitutes an Event of
Default)  or (2) any  Default  constituting  a  condition  to the funding of any
Revolving  Advance,  such waiver shall expire on the date upon which the Default
which was the subject of such waiver  matures into an Event of Default  pursuant
to the terms of this Agreement.

         10.4  Notices.  Unless  otherwise  specifically  provided  herein,  all
notices shall be in writing addressed to the respective party as set forth below
and may be personally served, telecopied or sent by overnight courier service or
United  States mail and shall be deemed to have been given:  (a) if delivered in
person,  when  delivered;   (b)  if  delivered  by  telecopy,  on  the  date  of
transmission if transmitted on a Business Day before 4:00 p.m.  Central time or,


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<PAGE>
if not, on the next  succeeding  Business  Day;  (c) if  delivered  by overnight
courier, one (1) Business Day after delivery to such courier properly addressed;
or (d) if by U.S.  Mail,  four (4) Business Days after  depositing in the United
States mail, with postage prepaid and properly addressed.




         If to Borrower:                    CIS AIR CORPORATION
                                            One Northern Concourse
                                            North Syracuse, New York  13212
                                            Telecopy No.:  (315) 455-4862
                                            Attn:  President

         If to Agent or to Heller:          HELLER FINANCIAL, INC.
                                            500 West Monroe
                                            Chicago, Illinois,  60661
                                            Attn:  HBC Portfolio Manager
                                            Telecopy No.:  (312) 441-7119

         With a copy to:                    HELLER FINANCIAL, INC.
                                            500 West Monroe
                                            Chicago, Illinois  60661
                                            Attn:  Legal Department/HBC
                                            Telecopy No.:  (312) 441-7208

                                            and

                                            VEDDER, PRICE, KAUFMAN & KAMMHOLZ
                                            222 North LaSalle Street
                                            Chicago, Illinois  60601
                                            Attn: Michael A. Nemeroff, Esq.
                                            Telecopy No.:  (312) 609-5005

         If to any Lender:  Its address  indicated on the signature page hereto,
in a Lender  Addition  Agreement or in a notice to Agent and Borrower or to such
other address as the party addressed shall have previously designated by written
notice to the serving party, given in accordance with this subsection 10.4.

         10.5 Survival of  Representations,  Warranties and Certain  Agreements.
All  agreements,  representations  and warranties  made herein shall survive the
execution and delivery of this Agreement and the making of the Loans  hereunder.
Notwithstanding  anything in this  Agreement or implied by law to the  contrary,
the agreements of Borrower set forth in subsections  10.1 and 10.2 shall survive
the payment of the Loans and the termination of this Agreement.

         10.6  Indulgence Not Waiver.  No failure or delay on the part of Agent,
any Lender or any holder of the Revolving  Note[s] in the exercise of any power,
right or privilege  hereunder or under the  Revolving  Note[s] shall impair such
power,  right or  privilege  or be  construed  to be a waiver of any  default or
acquiescence  therein,  nor shall any  single or  partial  exercise  of any such


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power,  right or privilege  preclude other or further exercise thereof or of any
other right, power or privilege.

         10.7 Marshaling; Payments Set Aside. Neither Agent nor any Lender shall
be under any  obligation to marshal any assets in favor of Borrower or any other
party or against or in payment of any or all of the  Obligations.  To the extent
that  Borrower  makes a payment or payments to Agent  and/or any Lender or Agent
and/or any Lender  enforces  its  security  interests  or exercise its rights of
setoff,  and such  payment or payments or the  proceeds of such  enforcement  or
setoff  or  any  part  thereof  are  subsequently  invalidated,  declared  to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other  party under any  bankruptcy  law,  state or federal  law,
common  law or  equitable  cause,  then  to the  extent  of such  recovery,  the
Obligations or part thereof originally intended to be satisfied,  and all Liens,
rights and remedies  therefor,  shall be revived and continued in full force and
effect as if such  payment had not been made or such  enforcement  or setoff had
not occurred.

         10.8 Entire  Agreement.  This Agreement,  the Revolving Note[s] and the
other Loan Documents referred to herein embody the final, entire agreement among
the parties  hereto and  supersede  any and all prior  commitments,  agreements,
representations,  and  understandings,  whether written or oral, relating to the
subject  matter  hereof and may not be  contradicted  or varied by  evidence  of
prior,  contemporaneous,  or subsequent  oral  agreements or  discussions of the
parties hereto. There are no oral agreements among the parties hereto.

         10.9 Independence of Covenants.  All covenants hereunder shall be given
independent  effect so that if a particular action or condition is not permitted
by any of such  covenants,  the fact that it would be  permitted by an exception
to, or be otherwise  within the limitations of, another covenant shall not avoid
the  occurrence  of a Default or an Event of Default if such  action is taken or
condition exists.

         10.10 Severability.  The invalidity,  illegality or unenforceability in
any  jurisdiction of any provision in or obligation  under this Agreement or the
other  Loan  Documents  shall not  affect or impair the  validity,  legality  or
enforceability of the remaining  provisions or obligations under this Agreement,
or the other Loan  Documents  or of such  provision or  obligation  in any other
jurisdiction.

         10.11  Lenders'  Obligations  Several;  Independent  Nature of Lenders'
Rights.  The  obligation  of each Lender  hereunder is several and not joint and
neither  Agent  nor any  Lender  shall  be  responsible  for the  obligation  or
commitment  of any other Lender  hereunder.  In the event that any Lender at any
time should fail to make a Loan as herein provided, the Lenders, or any of them,
at their sole option, may make the Loan that was to have been made by the Lender
so failing to make such Loan.  Nothing  contained  in any Loan  Document  and no
action taken by Agent or any Lender  pursuant  hereto or thereto shall be deemed
to constitute  Lenders to be a partnership,  an association,  a joint venture or
any other kind of entity.  The  amounts  payable at any time  hereunder  to each
Lender shall be a separate and independent  debt,  and,  provided Agent fails or
refuses to exercise any remedies  against Borrower after receiving the direction

 
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<PAGE>
of the Requisite  Lenders,  each Lender shall be entitled to protect and enforce
its rights  arising out of this  Agreement and it shall not be necessary for any
other  Lender to be joined as an  additional  party in any  proceeding  for such
purpose.

         10.12 Headings.  Section and subsection  headings in this Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

         10.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         10.14 Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns except that Borrower may not assign its rights or obligations  hereunder
without the written consent of Lenders.

         10.15    No Fiduciary Relationship; Limitation of Liabilities.

                  (A) No provision in this Agreement or in any of the other Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty by Agent or any Lender to Borrower.

                  (B) Neither Agent nor any Lender, nor any affiliate,  officer,
director, shareholder, employee, attorney, or agent of Agent or any Lender shall
have any liability with respect to, and Borrower  hereby waives,  releases,  and
agrees  not to sue any of them  upon,  any  claim  for  any  special,  indirect,
incidental,  or  consequential  damages  suffered  or  incurred  by  Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan  Documents,  or any of the  transactions  contemplated by this
Agreement or any of the other Loan Documents.  Borrower hereby waives, releases,
and agrees  not to sue Agent or any  Lender or any of  Agent's  or any  Lender's
affiliates,  officers, directors,  employees,  attorneys, or agents for punitive
damages in respect of any claim in  connection  with,  arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions   contemplated  by  this  Agreement  or  any  of  the  transactions
contemplated hereby.

         10.16  CONSENT  TO  JURISDICTION.   BORROWER  HEREBY  CONSENTS  TO  THE
JURISDICTION  OF ANY STATE OR FEDERAL  COURT  LOCATED  WITHIN THE COUNTY OF COOK
STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION,  ALL
ACTIONS OR PROCEEDINGS  ARISING OUT OF OR RELATING TO THIS AGREEMENT,  REVOLVING
NOTE[S] OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.  BORROWER
ACCEPTS  FOR  ITSELF  AND IN  CONNECTION  WITH  ITS  PROPERTIES,  GENERALLY  AND
UNCONDITIONALLY,  THE  NON-EXCLUSIVE  JURISDICTION  OF THE AFORESAID  COURTS AND


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<PAGE>
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS,  AND IRREVOCABLY  AGREES TO BE BOUND
BY ANY  JUDGMENT  RENDERED  THEREBY  IN  CONNECTION  WITH  THIS  AGREEMENT,  THE
REVOLVING NOTE[S], THE OTHER LOAN DOCUMENTS OR THE OBLIGATIONS.

         10.17  WAIVER OF JURY TRIAL.  BORROWER,  AGENT AND EACH  LENDER  HEREBY
WAIVE  THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED  UPON OR  ARISING  OUT OF THIS  AGREEMENT,  THE  NOTE[S] OR THE OTHER LOAN
DOCUMENTS.  BORROWER,  AGENT AND EACH LENDER  ACKNOWLEDGE  THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT,  THE REVOLVING NOTE[S] AND
THE OTHER LOAN  DOCUMENTS  AND THAT EACH WILL  CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS.  BORROWER,  AGENT AND EACH LENDER FURTHER WARRANT
AND  REPRESENT  THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL  COUNSEL,  AND
THAT EACH  KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS JURY TRIAL  RIGHTS  FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

         10.18  Construction.  Borrower,  Agent and each Lender each acknowledge
that it has had the  benefit  of legal  counsel  of its own  choice and has been
afforded an  opportunity  to review this  Agreement and the other Loan Documents
with its legal counsel.

         10.19 Counterparts;  Effectiveness.  This Agreement and any amendments,
waivers,  consents, or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed  and  delivered  shall  be  deemed  an  original,   but  all  of  which
counterparts  together shall  constitute but one and the same  instrument.  This
Agreement shall become  effective upon the execution of a counterpart  hereof by
each of the parties hereto.  Delivery of an executed  counterpart of a signature
page to this Agreement, any amendments,  waivers, consents or supplements, or to
any other Loan  Document by  telecopier  shall be as  effective as delivery of a
manually executed counterpart thereof.

         10.20  No Duty.  All  attorneys,  accountants,  appraisers,  and  other
professional  Persons and consultants retained by Agent or any Lender shall have
the right to act  exclusively  in the interest of Agent or such Lender and shall
have no duty of  disclosure,  duty of  loyalty,  duty of care,  or other duty or
obligation  of any type or nature  whatsoever  to Borrower or any of  Borrower's
shareholders or any other Person.

         10.21  Confidentiality.  Agent and  Lenders  shall  hold all  nonpublic
information  obtained pursuant to the requirements hereof and identified as such
by Borrower in accordance with such Person's  customary  procedures for handling
confidential  information  of this nature and in accordance  with safe and sound
business  practices  and in  any  event  may  make  disclosure  to  such  of its
respective   Affiliates,    officers,    directors,    employees,   agents   and
representatives  as need to know such  information in connection with the Loans.
If any Lender is  otherwise a creditor  of a  Borrower,  such Lender may use the
information  in connection  with its other  credits.  Agent and Lenders may also


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<PAGE>
make  disclosure  reasonably  required by a bona fide  offeree or  assignee  (or
participation),  or as required or  requested by any  Governmental  Authority or
representative  thereof,  or pursuant to legal process,  or to its  accountants,
lawyers and other  advisors,  and shall require any such offeree or assignee (or
participant)   to  agree  (and  require  any  of  its  offerees,   assignees  or
participants  to agree) to comply  with this  Section  10.21.  In no event shall
Agent or any Lender be obligated or required to return any  materials  furnished
by Borrower;  provided, however, each Offeree shall be required to agree that if
it does not become a assignee (or  participant)  it shall  return all  materials
furnished to it by Borrower in connection herewith.




                                      * * *

 
                                       61

<PAGE>


                  Witness the due execution of this Loan and Security  Agreement
by the respective  duly  authorized  officers of the  undersigned as of the date
first written above.

                                                  CIS AIR CORPORATION



                                                     By: /s/Thomas J. Prinzing
                                                         ---------------------
                                                         Thomas J. Prinzing
                                                  Title: President
                                                   FEIN: 94-3043971


Revolving Loan Commitments:                       HELLER FINANCIAL, INC., 
                                                  as Agent and Lender



$10,000,000                                          By: /s/Mary C. Bookman
                                                         ------------------
                                                         Mary C. Bookman
                                                  Title: Vice President



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