LOAN AND SECURITY AGREEMENT

         This  Loan  and  Security  Agreement  (as  it  may  be  amended,   this
"Agreement") is entered into on April 18, 1997 between NATIONSCREDIT  COMMERCIAL
CORPORATION,  THROUGH ITS NATIONSCREDIT  COMMERCIAL FUNDING DIVISION ("Lender"),
having an address at 1177 Avenue of the Americas, 36th Floor, New York, New York
10036  and  FIELDS  AIRCRAFT  SPARES  INCORPORATED  ("Borrower"),   whose  chief
executive  office is  located  at 341 "A"  Street,  Fillmore,  California  93015
("Borrower's Address").  The Schedules to this Agreement are an integral part of
this  Agreement and are  incorporated  herein by reference.  Terms used, but not
defined elsewhere, in this Agreement are defined in Schedule B.

1.       LOANS AND CREDIT ACCOMMODATIONS.

         1.1.     Amount.  Subject to the terms and conditions contained in this
Agreement, Lender will:
                  (a)      Revolving Loans and Credit Accommodations.  From time
to time during the Term at Borrower's request,  make revolving loans to Borrower
("Revolving Loans"),  and make letters of credit,  bankers acceptances and other
credit accommodations ("Credit  Accommodations")  available to Borrower, in each
case to the extent  that there is  sufficient  Availability  at the time of such
request to cover,  dollar for dollar,  the  requested  Revolving  Loan or Credit
Accommodation;  provided,  that after giving  effect to such  Revolving  Loan or
Credit  Accommodation,  (x) the outstanding balance of all monetary  Obligations
(including the principal balance of any Term Loan and, solely for the purpose of
determining  compliance with this provision,  the Credit Accommodation  Balance)
will not exceed the  Maximum  Fields  Facility  Amount set forth in Section 1 of
Schedule  A and (y) none of the other  Loan  Limits  set  forth in  Section 1 of
Schedule A will be exceeded. For this purpose, "Availability" means:

                           (i) the aggregate  amount of Eligible  Accounts (less
         maximum existing or asserted taxes, discounts,  credits and allowances)
         multiplied by the Accounts Advance Rate set forth in Section 1(b)(i) of
         Schedule A but not to exceed the Accounts Sublimit set forth in Section
         1(c) of Schedule A;

                                      plus

                           (ii) the  lower of cost or market  value of  Eligible
         Ordinary  Inventory  multiplied  by the  applicable  Inventory  Advance
         Rate(s) set forth in Section  1(b)(ii) of Schedule A, but not to exceed
         the  applicable  Inventory  Sublimit(s)  set forth in  Section  1(d) of
         Schedule A;
                                      plus

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                           (iii) the orderly  liquidation  value of Eligible MDC
         Inventory  (as  determined   pursuant  to  a  certain  appraisal  dated
         __________ conducted by Morten Beyer Associates, based on a 24-36 month
         orderly  liquidation)  multiplied by the applicable  Inventory  Advance
         Rate set forth in Section 1(b)(ii) of Schedule A, but not to exceed the
         applicable Inventory Sublimit set forth in Section 1(d) of Schedule A;

                                      minus

                           (iv)  all  Reserves  which  Lender  has   established
         pursuant  to  Section  1.2  (including   those  to  be  established  in
         connection with the requested Revolving Loan or Credit  Accommodation);
         and

                                      minus

                           (v)  the outstanding  balance  of all of the monetary
         Obligations  (excluding  the  Credit  Accommodation  Balance  and   the
         principal balance of the Term Loan).

                  (b)      Term Loan. On the date of this Agreement, make a term
loan to Borrower (the "Term Loan") in the principal amount, if any, set forth in
Section 2(a) of Schedule A.

         1.2.  Reserves.  Lender may from time to time establish and revise such
reserves as Lender deems  appropriate  in its sole  discretion  ("Reserves")  to
reflect  (i) events,  conditions,  contingencies  or risks  which  affect or may
affect (A) the  Collateral  or its value,  or the security  interests  and other
rights of Lender in the  Collateral or (B) the assets,  business or prospects of
Borrower or any Obligor,  (ii) Lender's  good faith concern that any  Collateral
report or  financial  information  furnished  by or on behalf of Borrower or any
Obligor to Lender is or may have been  incomplete,  inaccurate  or misleading in
any material respect,  (iii) any fact or circumstance which Lender determines in
good faith  constitutes,  or could constitute,  a Default or Event of Default or
(iv) any other events or  circumstances  which Lender  determines  in good faith
make the  establishment or revision of a Reserve  prudent.  Without limiting the
foregoing,  Lender shall (x) in the case of each Credit Accommodation issued for
the  purchase of Inventory  (a) which meets the  criteria for Eligible  Ordinary
Inventory  set forth in  clauses  (i),  (ii),  (iii),  (v) and (vi) of  Eligible
Ordinary  Inventory,  (b) which is or will be in transit to one of the locations
set forth in Section 10(d), (c) which is fully insured in a manner  satisfactory
to Lender and (d) with respect to which Lender is in  possession of all bills of
lading and all other documentation  which Lender has requested,  all in form and
substance  satisfactory  to Lender in its sole  discretion,  establish a Reserve
equal to the cost of such Inventory (plus all duties, freight, taxes, insurance,
costs and other charges and expenses  relating to such Credit  Accommodation  or
such Eligible Ordinary Inventory) multiplied by a percentage equal to 100% minus


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<PAGE>

the Inventory  Advance Rate applicable to such Eligible  Ordinary  Inventory and
(y) in the  case of any  other  Credit  Accommodation  issued  for any  purpose,
establish a Reserve equal to the full amount of such Credit  Accommodation  plus
all costs and other charges and expenses relating to such Credit  Accommodation.
In addition,  (x) Lender shall  establish a permanent  Reserve in the amount set
forth  in  Section  1(f) of  Schedule  A, and (y) if the  outstanding  principal
balance of the Term Loan advance with respect to Eligible  Equipment exceeds the
percentage  of the  appraised  value of such  Eligible  Equipment  set  forth in
Section 2(a) of Schedule A, Lender may  establish an  additional  Reserve in the
amount of such excess (and, for this purpose,  payments of principal of the Term
Loan made by  Borrower  shall be deemed to apply to the Term Loan  advance  with
respect to Eligible Equipment and Real Property,  respectively, in proportion to
the original principal amounts of such advances). Lender may, in its discretion,
establish and revise  Reserves by deducting them in determining  Availability or
by reclassifying Eligible Accounts or Eligible Inventory as ineligible.

         1.3. Other Provisions Applicable to Credit Accommodations.  Lender may,
in its sole  discretion and on terms and conditions  acceptable to Lender,  make
Credit  Accommodations  available  to  Borrower  either by issuing  them,  or by
causing  other  financial  institutions  to issue  them  supported  by  Lender's
guaranty or indemnification;  provided,  that after giving effect to each Credit
Accommodation,  the  Credit  Accommodation  Balance  will not  exceed the Credit
Accommodation Limit set forth in Section 1(e) of Schedule A. Any amounts paid by
Lender in respect of a Credit  Accommodation will be treated for all purposes as
a Revolving Loan which shall be secured by the Collateral and bear interest, and
be payable,  in the same manner as a Revolving Loan.  Borrower agrees to execute
all documentation  required by Lender or the issuer of any Credit  Accommodation
in connection with any such Credit Accommodation.

         1.4. Repayment.  Accrued interest on all monetary  Obligations shall be
payable  on the first day of each  month.  Principal  of the Term Loan  shall be
repaid as set forth in  Section  2(b) of  Schedule  A. If at any time any of the
Loan Limits are exceeded,  Borrower will  immediately pay to Lender such amounts
and/or   provide  cash   collateral   to  Lender  with  respect  to  the  Credit
Accommodation  Balance in the manner set forth in Section  7.3,  as shall  cause
Borrower to be in full compliance  with all of the Loan Limits.  Notwithstanding
the  foregoing,  Lender may, in its sole  discretion,  make or permit  Revolving
Loans,  the  Term  Loan,  any  Credit   Accommodations  or  any  other  monetary
Obligations to be in excess of any of the Loan Limits;  provided,  that Borrower
shall, upon Lender's demand,  pay to Lender such amounts as shall cause Borrower
to be in full  compliance  with  all of the Loan  Limits.  All  unpaid  monetary
Obligations  shall be payable in full on the Maturity  Date set forth in Section
7.1 or, if earlier, the date of any early termination pursuant to Section 7.2.

         1.5.    Minimum Borrowing.  Subject to the terms and conditions of this
Agreement,  Borrower  agrees  to (i)  borrow  sufficient  amounts  to cause  the
outstanding  principal  balance  of the Loans to equal or  exceed,  at all times


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<PAGE>

prior to the  Maturity  Date,  the Minimum Loan Amount set forth in Section 4 of
Schedule A and (ii) maintain  Availability  sufficient to enable  Borrower to do
so.  However,  Lender shall not be  obligated to loan  Borrower the Minimum Loan
Amount other than in  accordance  with all of the terms and  conditions  of this
Agreement.

2.       INTEREST AND FEES.

         2.1.  Interest.  All Loans and other  monetary  Obligations  shall bear
interest  at the  Interest  Rate(s) set forth in Section 3 of Schedule A, except
where  expressly  set forth to the  contrary in this  Agreement  or another Loan
Document;  provided, that after the occurrence of an Event of Default, all Loans
and other monetary  Obligations  shall, at Lender's  option,  bear interest at a
rate per  annum  equal  to two  percent  (2%) in  excess  of the rate  otherwise
applicable thereto (the "Default Rate") until paid in full  (notwithstanding the
entry of any  judgment  against  Borrower or the  exercise of any other right or
remedy by Lender), and all such interest shall be payable on demand.  Changes in
the  Interest  Rate shall be effective as of the date of any change in the Prime
Rate.  Notwithstanding anything to the contrary contained in this Agreement, the
aggregate  of all  amounts  deemed  to be  interest  hereunder  and  charged  or
collected by Lender is not intended to exceed the highest rate permissible under
any  applicable  law, but if it should,  such interest  shall  automatically  be
reduced to the extent  necessary to comply with  applicable  law and Lender will
refund to Borrower any such excess interest received by Lender.

         2.2.  Fees and Warrants.  Borrower shall pay Lender the following fees,
and issue Lender the following  warrants,  which are in addition to all interest
and other sums payable by Borrower to Lender under this  Agreement,  and are not
refundable:

                  (a)  Closing  Fee.  A closing  fee in the  amount set forth in
Section  6(a) of  Schedule A,  one-half of which was fully  earned and paid upon
issuance of the  commitment  letter  dated March 21, 1997 and  one-half of which
shall be deemed to be fully earned as of, and payable on, the date hereof.

                  (b) Facility  Fees. A facility fee for the Initial Term in the
amount set forth in Section  6(b)(i) of Schedule A (which  shall be fully earned
as of the date of this Agreement and shall be payable in equal installments due,
respectively,  on each  anniversary  thereof  during the  Initial  Term),  and a
facility fee for each  Renewal Term in the amount set forth in Section  6(b)(ii)
of Schedule A (which  shall be fully  earned as of the first day of such Renewal
Term and shall be payable in equal installments due, respectively,  on the first
day of such Renewal  Term and on each  anniversary  thereof  during such Renewal
Term).
                  (c)      Servicing Fee.  A monthly servicing fee in the amount
set  forth  in  Section  6(c)  of  Schedule  A,  in  consideration  of  Lender's
administration and other services for each month (or part thereof),  which shall


                                       4
<PAGE>

be fully earned as of, and payable in advance on, the date of this Agreement and
on the first day of each month  thereafter so long as any of the Obligations are
outstanding.

                  (d) Unused Line Fee. An unused line fee at a rate equal to the
percentage  per annum set forth in Section  6(d) of  Schedule A of the amount by
which $10,000,000 exceeds the sum of (i) the average daily outstanding principal
balance of the Loans and the Credit  Accommodation  Balance and (ii) the average
daily  Aero  Management  Loan  Balance,  in each  case  during  the  immediately
preceding month (or part thereof),  which fee shall be payable,  in arrears,  on
the first day of each month so long as any of the  Obligations  are  outstanding
and on the Maturity Date.

                  (e) Minimum  Borrowing  Fee. A minimum  borrowing fee equal to
the excess,  if any, of (i) interest which would have been payable in respect of
each period set forth in Section 6(e) of Schedule A if, at all times during such
period,  the principal balance of the Loans was equal to the Minimum Loan Amount
over (ii) the actual interest payable in respect of such period, which fee shall
be fully  earned as of the first day of such  period and payable on the date set
forth in Section 6(e)(ii) of Schedule A and on the Maturity Date.

                  (f)     Success Fee.  A success fee in the amount set forth in
Section  6(e)(i) of Schedule  A, which  shall be fully  earned as of the date of
this Agreement and payable as set forth in Section 6(f) of Schedule A.

                  (g) Warrants. Warrants to acquire the capital stock of Spares,
as  summarized  in Section  6(g) of  Schedule A and as more fully set forth in a
separate  warrant  agreement  executed by Borrower  contemporaneously  with this
Agreement.

                  (h)    Credit Accommodation Fees.  All of the fees relating to
Credit Accommodations set forth in Section 6(i) and 6(j) of Schedule A.

         2.3.  Computation  of Interest and Fees. All interest and fees shall be
calculated daily on the closing balances in the Loan Account based on the actual
number  of days  elapsed  in a year of 360 days.  For  purposes  of  calculating
interest and fees, if the outstanding  daily principal  balance of the Revolving
Loans is a credit balance, such balance shall be deemed to be zero.

         2.4. Loan Account;  Monthly  Accountings.  Lender shall maintain a loan
account for Borrower  reflecting  all advances,  charges,  expenses and payments
made pursuant to this Agreement (the "Loan Account"), and shall provide Borrower
with a monthly  accounting  reflecting  the activity in the Loan  Account.  Each
accounting  shall be deemed  correct,  accurate  and binding on Borrower  and an
account  stated  (except for reverses and  reapplications  of payments  made and
corrections of errors discovered by Lender),  unless Borrower notifies Lender in


                                        5
<PAGE>

writing to the  contrary  within  sixty days  after  such  account is  rendered,
describing  the nature of any alleged errors or  admissions.  However,  Lender's
failure to maintain the Loan Account or to provide any such accounting shall not
affect the legality or binding nature of any of the Obligations.  Interest, fees
and other monetary  Obligations  due and owing under this  Agreement  (including
fees and other amounts paid by Lender to issuers of Credit  Accommodations) may,
in Lender's  discretion,  be charged to the Loan Account, and will thereafter be
deemed to be  Revolving  Loans and will bear  interest at the same rate as other
Revolving Loans.

3.SECURITY INTEREST.

         3.1.  To  secure  the  full  payment  and  performance  of  all  of the
Obligations  when due,  Borrower  hereby grants to Lender a continuing  security
interest in all of  Borrower's  property  and  interests  in  property,  whether
tangible or  intangible,  now owned or in  existence  or  hereafter  acquired or
arising,  wherever  located,   including  Borrower's  interest  in  all  of  the
following,  whether or not  eligible  for lending  purposes:  (i) all  Accounts,
Chattel Paper, Instruments,  Documents,  Goods (including Inventory,  Equipment,
farm products and consumer goods),  Investment  Property,  General  Intangibles,
Deposit  Accounts  and  money,  (ii) all  proceeds  and  products  of all of the
foregoing  (including proceeds of any insurance  policies,  proceeds of proceeds
and claims  against  third  parties  for loss or any  destruction  of any of the
foregoing) and (iii) all books and records relating to any of the foregoing.

4.       ADMINISTRATION.

         4.1. Lock Boxes and Blocked  Accounts.  Borrower  will, at its expense,
establish  (and  revise  from time to time as  Lender  may  require)  collection
procedures acceptable to Lender, in Lender's sole discretion, for the collection
of checks,  wire transfers and other proceeds of Accounts ("Account  Proceeds"),
which may include (i)  directing  all Account  Debtors to send all such proceeds
directly  to a post  office  box  designated  by  Lender  either  in the name of
Borrower (but as to which Lender has exclusive  access) or in the name of Lender
(a "Lock Box") or (ii) depositing all Account Proceeds received by Borrower into
one or more  bank  accounts  maintained  in  Lender's  name  (each,  a  "Blocked
Account"),  under an  arrangement  acceptable  to Lender with a depository  bank
acceptable to Lender,  pursuant to which all funds  deposited  into each Blocked
Account are to be transferred to Lender in such manner, and with such frequency,
as Lender shall specify or (iii) a combination of the foregoing. Borrower agrees
to execute,  and to cause its  depository  banks to  execute,  such Lock Box and
Blocked Account agreements and other  documentation as Lender shall require from
time to time in connection with the foregoing.

         4.2.    Remittance of Proceeds.  Except as provided in Section 4.1, all
proceeds  arising from the sale or other  disposition of any Collateral shall be
delivered, in kind, by Borrower to Lender in the original form in which received
by Borrower not later than the second  Business  Day after  receipt by Borrower.


                                        6
<PAGE>

Until so delivered to Lender,  Borrower  shall hold such  proceeds  separate and
apart from  Borrower's  other funds and property in an express trust for Lender.
Nothing in this  Section  4.2 shall limit the  restrictions  on  disposition  of
Collateral set forth elsewhere in this Agreement.

         4.3.  Application  of  Payments.  Lender may,  in its sole  discretion,
apply,  reverse and  re-apply all cash and non-cash  proceeds of  Collateral  or
other  payments  received  with  respect to the  Obligations,  in such order and
manner as Lender shall  determine,  whether or not the  Obligations are due, and
whether before or after the occurrence of a Default or an Event of Default.  For
purposes of determining Availability,  such amounts will be credited to the Loan
Account and the Collateral  balances to which they relate upon Lender's  receipt
of advice from  Lender's  Bank (set forth in Section 11 of Schedule A) that such
items have been credited to Lender's  account at Lender's Bank (or upon Lender's
deposit  thereof at Lender's Bank in the case of payments  received by Lender in
kind),  in each case  subject to final  payment  and  collection.  However,  for
purposes of computing  interest on the  Obligations,  such items shall be deemed
applied by Lender one and  one-half  Business  Days  after  Lender's  receipt of
advice of deposit thereof at Lender's Bank.

         4.4. Notification;  Verification. Lender or its designee may, from time
to time,  whether or not a Default or Event of Default has occurred:  (i) verify
directly  with the  Account  Debtors  the  validity,  amount  and other  matters
relating to the  Accounts  and Chattel  Paper,  by means of mail,  telephone  or
otherwise, either in the name of Borrower or Lender or such other name as Lender
may choose;  (ii) notify Account Debtors that Lender has a security  interest in
the  Accounts  and that payment  thereof is to be made  directly to Lender;  and
(iii) demand,  collect or enforce payment of any Accounts and Chattel Paper (but
without any duty to do so).

         4.5. Power of Attorney. Borrower hereby grants to Lender an irrevocable
power of attorney,  coupled with an interest,  authorizing and permitting Lender
(acting  through any of its officers,  employees,  attorneys or agents),  at any
time  (whether  or not a  Default  or  Event  of  Default  has  occurred  and is
continuing, except as expressly provided below), at Lender's option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the  following,  in Borrower's  name or otherwise:  (i) execute on
behalf of Borrower any documents that Lender may, in its sole  discretion,  deem
advisable in order to perfect and maintain  Lender's  security  interests in the
Collateral,  to exercise a right of Borrower or Lender,  or to fully  consummate
all the transactions contemplated by this Agreement and the other Loan Documents
(including such financing statements and continuation financing statements,  and
amendments  thereto,  as Lender shall deem necessary or appropriate) and to file
as a financing  statement any copy of this Agreement or any financing  statement
signed by Borrower;  (ii) execute on behalf of Borrower any document exercising,
transferring or assigning any option to purchase,  sell or otherwise  dispose of
or lease (as lessor or lessee)  any real or personal  property  which is part of
the  Collateral  or in which Lender has an interest;  (iii) execute on behalf of


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<PAGE>

Borrower any invoices  relating to any  Accounts,  any draft against any Account
Debtor and any notice to any Account  Debtor,  any proof of claim in bankruptcy,
any  notice  of  Lien  or  claim,  assignment  or  satisfaction  of  mechanic's,
materialman's  or other Lien;  (iv)  receive and  otherwise  take control in any
manner of any cash or non-cash items of payment or proceeds of  Collateral;  (v)
endorse Borrower's name on all checks and other forms of remittances received by
Lender;  (vi) pay,  contest or settle any Lien,  charge,  encumbrance,  security
interest and adverse claim in or to any of the Collateral, or any judgment based
thereon,  or otherwise take any action to terminate or discharge the same; (vii)
after the occurrence of a Default or Event of Default,  grant extensions of time
to pay,  compromise  claims relating to, and settle Accounts,  Chattel Paper and
General  Intangibles for less than face value and execute all releases and other
documents in  connection  therewith;  (viii) pay any sums required on account of
Borrower's  taxes or to secure the release of any Liens  therefor;  (ix) pay any
amounts  necessary  to  obtain,  or  maintain  in effect,  any of the  insurance
described  in Section  5.13;  (x) settle and adjust,  and give  releases of, any
insurance  claim  that  relates  to any of the  Collateral  and  obtain  payment
therefor;  (xi)  instruct  any third  party  having  custody  or  control of any
Collateral or books or records  belonging  to, or relating to,  Borrower to give
Lender the same rights of access and other rights with respect thereto as Lender
has under this  Agreement;  and (xii) after the occurrence of a Default or Event
of Default,  change the address for  delivery of  Borrower's  mail in respect of
payments  from  Account  Debtors  and  receive  and open all mail  addressed  to
Borrower;  provided,  that  Lender  shall  promptly  forward  all other  mail of
Borrower to Borrower at its address set forth in Section  9.1.  Any and all sums
paid, and any and all costs, expenses,  liabilities,  obligations and reasonable
attorneys' fees incurred, by Lender with respect to the foregoing shall be added
to and become  part of the  Obligations,  shall be payable on demand,  and shall
bear interest at a rate equal to the highest  interest rate applicable to any of
the Obligations.  Borrower agrees that Lender's rights under the foregoing power
of attorney or any of Lender's  other rights  under this  Agreement or the other
Loan  Documents  shall not be construed to indicate that Lender is in control of
the business, management or properties of Borrower.

         4.6. Disputes. Borrower shall promptly notify Lender of all disputes or
claims  relating  to Accounts  and Chattel  Paper.  Borrower  will not,  without
Lender's  prior  written  consent,  compromise  or settle any Account or Chattel
Paper for less than the full  amount  thereof,  grant any  extension  of time of
payment  of any  Account  or Chattel  Paper,  release  (in whole or in part) any
Account  Debtor or other person liable for the payment of any Account or Chattel
Paper  or  grant  any  credits,  discounts,   allowances,   deductions,   return
authorizations or the like with respect to any Account or Chattel Paper;  except
that prior to an Event of Default  Borrower  may do such things in the  ordinary
course of business.  Borrower will promptly report any such permitted settlement
or forgiveness to Lender.


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<PAGE>

         4.7.   Invoices.  At Lender's request, Borrower will cause all invoices
and  statements  which it sends to Account  Debtors or other third parties to be
marked,  in a manner  satisfactory  to  Lender,  to  reflect  Lender's  security
interest therein.

         4.8.     Inventory.

                  (a)  Returns.  Provided  that no Event of Default has occurred
and is  continuing,  if any Account  Debtor returns any Inventory to Borrower in
the ordinary course of its business, Borrower will promptly determine the reason
for such return and promptly issue a credit  memorandum to the Account Debtor in
the appropriate  amount  (sending a copy to Lender).  After the occurrence of an
Event of Default,  Borrower will not accept any return  without  Lender's  prior
written  consent.  Regardless  of  whether  an Event of  Default  has  occurred,
Borrower will, until such time as Borrower has issued a credit memorandum to the
Account  Debtor,  (i) hold the  returned  Inventory  in trust for  Lender;  (ii)
segregate all returned  Inventory from all of Borrower's  other property;  (iii)
conspicuously  label the  returned  Inventory  as  Lender's  property;  and (iv)
immediately notify Lender of the return of such Inventory, specifying the reason
for such return,  the location and condition of the returned  Inventory  and, at
Lender's  request,  deliver  such  returned  Inventory  to Lender at an  address
specified by Lender.

                  (b) Other Covenants. Borrower will not, without Lender's prior
written  consent,   (i)  store  any  Inventory  or  other  Collateral  with  any
warehouseman  or other third  party  other than as set forth in Section  9(d) of
Schedule A or (ii) sell any  Inventory  on a  sale-or-return,  guaranteed  sale,
consignment,  or other contingent basis. Borrower will produce Inventory only in
accordance with the Fair Labor Standards Act of 1938 as amended,  and all rules,
regulations and orders promulgated thereunder.

         4.9. Access to Collateral,  Books and Records. At reasonable times, and
on one Business  Day's notice,  prior to the occurrence of a Default or an Event
of Default, and at any time and with or without notice after the occurrence of a
Default or an Event of  Default,  Lender or its  agents  shall have the right to
inspect the Collateral,  and the right to examine and copy Borrower's  books and
records. Lender shall take reasonable steps to keep confidential all information
obtained in any such inspection or examination,  but Lender shall have the right
to disclose any such information to its auditors, regulatory agencies, attorneys
and participants, and pursuant to any subpoena or other legal process; provided,
however, that if Lender is required to disclose any such information pursuant to
any  subpoena or other  legal  process,  Lender  shall  notify  Borrower of such
required  disclosure and Lender shall refrain from making such disclosure  until
the earlier of Borrower's  consent thereto and the date immediately prior to the
expiration of the period in which Lender must comply with such subpoena or other
legal  process,  during  which time  Borrower  shall be  entitled  to pursue all
remedies  available to Borrower to delay or prevent such  disclosure;  provided,
further,  that  Lender  shall not be liable for any  damages  or other  costs or


                                        9
<PAGE>

expenses  resulting  from any action of Borrower  under this  Section  4.9,  and
Borrower  agrees to  indemnify  Lender  for any losses  incurred  by Lender as a
result of any such actions by Borrower under this Section 4.9.  Borrower  agrees
to give Lender access to any or all of  Borrower's  premises to enable Lender to
conduct such  inspections and  examinations.  Such  inspections and examinations
shall be at Borrower's  expense and the charge therefor shall be $650 per person
per day (or such higher amount as shall represent Lender's then current standard
charge),  plus reasonable out-of-pockets  expenses.  Lender  may,  at Borrower's
expense,  use  Borrower's  personnel,  computer and other  equipment,  programs,
printed  output and  computer  readable  media,  supplies  and  premises for the
collection, sale or other disposition of Collateral to the extent Lender, in its
sole discretion,  deems appropriate.  Borrower hereby irrevocably authorizes all
accountants  and third parties to disclose and deliver to Lender,  at Borrower's
expense, all financial information,  books and records, work papers,  management
reports and other  information in their  possession  regarding  Borrower and not
subject to professional privilege, such as attorney-client  privilege.  Borrower
will not enter into any agreement  with any accounting  firm,  service bureau or
third  party to store  Borrower's  books or records at any  location  other than
Borrower's  Address  without first  obtaining  Lender's  written  consent (which
consent may be conditioned  upon such accounting  firm,  service bureau or other
third party  agreeing  to give Lender the same rights with  respect to access to
books and records and related rights as Lender has under this Agreement).

5.       REPRESENTATIONS, WARRANTIES AND COVENANTS.

         To induce  Lender to enter into this  Agreement,  Borrower  represents,
warrants  and  covenants  as  follows  (it being  understood  that (i) each such
representation  and warranty  will be deemed remade as of the date on which each
Loan is made and each Credit Accommodation is provided and shall not be affected
by any knowledge of, or any investigation  by, Lender,  and (ii) compliance with
each such covenant will be a condition to each Loan and Credit Accommodation:

         5.1.  Existence  and  Authority.  Borrower is duly  organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation or formation. Borrower is qualified and licensed to do business in
all  jurisdictions  in which any failure to do so would have a material  adverse
effect on Borrower. The execution,  delivery and performance by Borrower of this
Agreement  and all of the  other  Loan  Documents  have  been  duly and  validly
authorized,  do not violate Borrower's articles or certificate of incorporation,
by-laws  or  other  organizational  documents,  or any law or any  agreement  or
instrument or any court order which is binding upon Borrower or its property, do
not constitute  grounds for acceleration of any indebtedness or obligation under
any agreement or instrument which is binding upon Borrower or its property,  and
do not require the consent of any  Person.  This  Agreement  and such other Loan
Documents have been duly executed and delivered by, and are enforceable against,


                                       10
<PAGE>

Borrower,  and all other Obligors who have signed them, in accordance with their
respective terms.  Sections 9(g) and 9(h) of Schedule A sets forth the ownership
of Borrower and its Subsidiaries as of the date of this Agreement.

         5.2.  Name;  Trade Names and Styles.  The name of Borrower set forth in
the heading to this Agreement is its correct and complete legal name.  Listed in
Section 9 of Schedule A are all prior names of  Borrower  and all of  Borrower's
present  and prior  trade  names.  Borrower  shall give Lender at least 30 days'
prior written notice before  changing its name or doing business under any other
name.  Borrower has complied  with all laws  relating to the conduct of business
under a fictitious  business name.  Borrower represents and warrants that (i) to
the best of its knowledge, each trade name does not refer to another corporation
or other legal entity; (ii) all Accounts invoiced under any such trade names are
owned exclusively by Borrower and are subject to the security interest of Lender
and the other  terms of this  Agreement  and (iii) all  schedules  of  Accounts,
including  any sales made or services  rendered  using the trade name shall show
Borrower's name as assignor.

         5.3.  Title  to  Collateral;  Permitted  Liens.  Borrower  has good and
marketable  title to the Collateral.  The Collateral now is and will remain free
and clear of any and all liens,  charges,  security interests,  encumbrances and
adverse claims, except for Permitted Liens. Lender now has, and will continue to
have, a first-priority perfected and enforceable security interest in all of the
Collateral,  subject only to the Permitted Liens, and Borrower will at all times
defend  Lender and the  Collateral  against  all  claims of others.  None of the
Collateral which is Equipment is or will be affixed to any real property in such
a manner, or with such intent, as to become a fixture.  Borrower is not a lessee
under any real property lease pursuant to which the lessor may obtain any rights
in any of the Collateral, and no such lease now prohibits, restrains, impairs or
conditions, or will prohibit, restrain, impair or condition, Borrower's right to
remove any  Collateral  from the leased  premises.  Whenever any  Collateral  is
located  upon  premises  in which any third  party has an  interest  (whether as
owner,  mortgagee,  beneficiary  under a deed  of  trust,  lien  or  otherwise),
Borrower  shall,  whenever  requested by Lender,  cause each such third party to
execute and deliver to Lender,  in form  acceptable to Lender,  such waivers and
subordinations as Lender shall specify,  so as to ensure that Lender's rights in
the Collateral  are, and will continue to be, superior to the rights of any such
third party.  Borrower will keep in full force and effect,  and will comply with
all the terms of, any lease of real property  where any of the Collateral now or
in the future may be located.

         5.4.  Accounts and Chattel Paper. As of each date reported by Borrower,
all Accounts which  Borrower has reported to Lender as being  Eligible  Accounts
comply in all respects with the criteria for  eligibility  established by Lender
and in effect at such time.  Should an Account  that has been  reported  in good
faith as an  Eligible  Account  subsequently  be  determined  to be  ineligible,
Borrower  will  have 15 days to fix the  error by  providing  a new  report  not
including that Account and no Event of Default shall have occurred provided that
the amount advanced to Borrower does not  exceed  Availability. All Accounts and

                                       11

<PAGE>

Chattel Paper are genuine and in all respects what they purport to be, arise out
of a completed, bona fide and unconditional and non-contingent sale and delivery
of goods or  rendition  of services by  Borrower in the  ordinary  course of its
business and in accordance with the terms and conditions of all purchase orders,
contracts or other documents  relating  thereto,  each Account Debtor thereunder
had the capacity to contract at the time any contract or other  document  giving
rise to such  Accounts and Chattel  Paper were  executed,  and the  transactions
giving rise to such Accounts and Chattel Paper comply with all  applicable  laws
and governmental rules and regulations.

         5.5.  Investment  Property.  Borrower  will  take  any and all  actions
required  or  requested  by Lender,  from time to time,  to (i) cause  Lender to
obtain exclusive  control of any Investment  Property in a manner  acceptable to
Lender and (ii) obtain from any issuers of  Investment  Property  and such other
Persons as Lender shall specify, for the benefit of Lender, written confirmation
of Lender's  exclusive  control over such Investment  Property.  For purposes of
this Section 5.5, Lender shall have exclusive control of Investment  Property if
(A) such Investment  Property  consists of certificated  securities and Borrower
delivers such certificated  securities to Lender (with appropriate  endorsements
if such  certificated  securities are in registered  form);  (B) such Investment
Property consists of uncertificated  securities and either (x) Borrower delivers
such  uncertificated  securities  to Lender or (y) the  issuer  thereof  agrees,
pursuant to documentation in form and substance  satisfactory to Lender, that it
will comply with  instructions  originated by Lender without  further consent by
Borrower, and (C) such Investment Property consists of security entitlements and
either (x) Lender becomes the entitlement  holder thereof or (y) the appropriate
securities  intermediary agrees, pursuant to documentation in form and substance
satisfactory to Lender,  that it will comply with entitlement  orders originated
by Lender without further consent by Borrower.

         5.6. Place of Business;  Location of Collateral.  Borrower's Address is
Borrower's chief executive office and the location of its books and records.  In
addition, except as provided in the immediately following sentence, Borrower has
places of business and  Collateral  located only at the  locations  set forth on
Sections  9(d) and 9(e) of  Schedule  A.  Borrower  will give Lender at least 30
days' prior written  notice  before  opening any  additional  place of business,
changing its chief executive office or the location of its books and records, or
moving any of the Collateral to a location other than Borrower's  Address or one
of the  locations  set forth in  Sections  9(d) and 9(e) of Schedule A, and will
execute and deliver all financing  statements and other agreements,  instruments
and documents which Lender shall require as a result thereof.

         5.7.  Financial  Condition,   Statements  and  Reports.  All  financial
statements delivered to Lender by or on behalf of Borrower have been prepared in
conformity  with GAAP and completely and fairly reflect the financial  condition
of Borrower in all material  respects,  at the times and for the periods therein
stated (subject to year-end  adjustments).  Between the last date covered by any
such financial statement provided to Lender and the date hereof,  there has been


                                       12

<PAGE>

no material  adverse change in the financial  condition or business of Borrower.
Borrower  is  solvent  and  able to pay its  debts  as they  come  due,  and has
sufficient  capital to carry on its business as now conducted and as proposed to
be conducted.  All schedules,  reports and other  information and  documentation
delivered by Borrower to Lender with respect to the Collateral  are, or will be,
when delivered,  true, correct and complete as of the date delivered or the date
specified therein in all material respects.

         5.8.  Tax Returns and  Payments;  Pension  Contributions.  Borrower has
timely  filed all tax returns  and  reports  required  by  applicable  law,  and
Borrower  has  timely  paid all  applicable  taxes,  assessments,  deposits  and
contributions  now or in the future owed by  Borrower.  Borrower  may,  however,
defer payment of any contested taxes; provided,  that Borrower (i) in good faith
contests  Borrower's  obligation  to pay such taxes by  appropriate  proceedings
promptly and  diligently  instituted  and  conducted;  (ii)  notifies  Lender in
writing  of  the  commencement   of,  and  any  material   development  in,  the
proceedings;  (iii) posts  bonds or takes any other  steps  required to keep the
contested  taxes  from  becoming  a Lien  upon  any of the  Collateral  and (iv)
maintains  adequate  reserves  therefor  in  conformity  with GAAP.  Borrower is
unaware of any claims or  adjustments  proposed for any of Borrower's  prior tax
years  which  could  result in  additional  taxes  becoming  due and  payable by
Borrower. Borrower has paid, and shall continue to pay, all amounts necessary to
fund all present and future  pension,  profit sharing and deferred  compensation
plans in  accordance  with their  terms,  and Borrower  has not  withdrawn  from
participation in, permitted partial or complete termination of, or permitted the
occurrence  of any other event with respect to, any such plan which could result
in any liability of Borrower,  including  any  liability to the Pension  Benefit
Guaranty  Corporation or any other governmental  agency.  Borrower shall, at all
times,  utilize the services of an outside  payroll  service  providing  for the
automatic deposit of all payroll taxes payable by Borrower.

         5.9.  Compliance  with Laws.  Borrower  has  complied  in all  material
respects with all provisions of all applicable laws and  regulations,  including
those relating to Borrower's ownership of real or personal property, the conduct
and  licensing of Borrower's  business,  the payment and  withholding  of taxes,
ERISA and other employee matters, safety and environmental matters.

         5.10.  Litigation.  Section  9(f) of Schedule A  discloses  all claims,
proceedings,  litigation or investigations pending or (to the best of Borrower's
knowledge)  threatened against Borrower.  There is no claim,  suit,  litigation,
proceeding or  investigation  pending or (to the best of  Borrower's  knowledge)
threatened  by or  against  or  affecting  Borrower  in any court or before  any
governmental  agency (or any basis therefor known to Borrower) which may result,
either  separately or in the  aggregate,  in any material  adverse change in the
financial  condition or business of Borrower,  or in any material  impairment in
the  ability of  Borrower to carry on its  business  in  substantially  the same
manner as it is now being  conducted.  Borrower will  promptly  inform Lender in


                                       13

<PAGE>

writing of any claim,  proceeding,  litigation  or  investigation  in the future
threatened or instituted by or against Borrower.

         5.11.    Use of Proceeds. All proceeds of all Loans will be used solely
for lawful business purposes.

         5.12. Insurance.  Borrower will at all times carry property,  liability
and other  insurance,  with  insurers  acceptable  to  Lender,  in such form and
amounts,  and with such  deductibles  and  other  provisions,  as  Lender  shall
require, and Borrower will provide evidence of such insurance to Lender, so that
Lender is  satisfied  that such  insurance  is, at all times,  in full force and
effect. Each property insurance policy shall name Lender as loss payee and shall
contain a lender's loss payable  endorsement in form acceptable to Lender,  each
liability insurance policy shall name Lender as an additional insured,  and each
business interruption insurance policy shall be collaterally assigned to Lender,
all in form and  substance  satisfactory  to Lender.  All  policies of insurance
shall provide that they may not be cancelled or changed  without at least thirty
(30) days' prior  written  notice to Lender,  shall  contain  breach of warranty
coverage,  and shall otherwise be in form and substance  satisfactory to Lender.
Upon  receipt of the  proceeds of any such  insurance,  Lender  shall apply such
proceeds in reduction of the  Obligations as Lender shall  determine in its sole
discretion.  Borrower will promptly deliver to Lender copies of all reports made
to insurance companies.

         5.13. Financial and Collateral Reports. Borrower has kept and will keep
adequate  records and books of account with  respect to its business  activities
and the  Collateral  in which proper  entries are made in  accordance  with GAAP
reflecting  all its  financial  transactions,  and will cause to be prepared and
furnished to Lender the following  (all to be prepared in accordance  with GAAP,
unless Borrower's  certified public accountants concur in any change therein and
such change is disclosed to Lender and is consistent with GAAP):

                  (a) Collateral  Reports. On or before the fifteenth (15th) day
of each  month,  an  aging of  Borrower's  Accounts,  Chattel  Paper  and  notes
receivable,  and weekly inventory  reports,  all in such form, and together with
such additional  certificates,  schedules and other  information with respect to
the  Collateral  or the  business of Borrower or any  Obligor,  as Lender  shall
request,  in each case,  with  respect to any items that  exceed  dollar  limits
established  by Lender either orally or in writing from time to time;  provided,
that  Borrower's  failure to execute  and  deliver  the same shall not affect or
limit Lender's security  interests and other rights in any of the Accounts,  nor
shall Lender's  failure to advance or lend against a specific  Account affect or
limit Lender's  security  interest and other rights therein.  Together with each
such schedule, Borrower shall furnish Lender, upon its request, with copies (or,
at Lender's request,  originals) of all contracts,  orders,  invoices, and other
similar documents,  and all original shipping  instructions,  delivery receipts,
bills of  lading,  and other  evidence  of  delivery,  for any goods the sale or


                                       14

<PAGE>

disposition  of which gave rise to such  Accounts,  and  Borrower  warrants  the
genuineness  of all of the  foregoing.  In addition,  Borrower  shall deliver to
Lender,  upon its request,  the  originals of all  Instruments,  Chattel  Paper,
security  agreements,  guaranties and other documents and property evidencing or
securing any Accounts,  immediately upon receipt thereof and in the same form as
received,  with all  necessary  endorsements.  Lender may  destroy or  otherwise
dispose  of all  documents,  schedules  and  other  papers  delivered  to Lender
pursuant to this Agreement (other than originals of Instruments,  Chattel Paper,
security  agreements,  guaranties and other documents and property evidencing or
securing any Accounts) six months after Lender  receives them,  unless  Borrower
requests  their  return in writing in advance and  arranges  for their return to
Borrower at Borrower's expense.

                  (b) Annual Statements. Not later than one hundred twenty (120)
days after the close of each fiscal year of Borrower,  unqualified (except for a
qualification  for a change in accounting  principles  with which the accountant
concurs) audited financial statements of Borrower and its Subsidiaries as of the
end of such year, on a consolidated and consolidating basis, certified by a firm
of independent  certified public accountants of recognized  standing selected by
Borrower but acceptable to Lender, together with a copy of any management letter
issued in connection therewith;

                  (c) Interim  Statements.  Not later than twenty-five (25) days
after the end of each month  hereafter which is not the last month of a calendar
quarter,  and  forty-five  (45) days after the last day of a  calendar  quarter,
including the last month of Borrower's fiscal year,  unaudited interim financial
statements of Borrower and its  Subsidiaries  as of the end of such month and of
the  portion of  Borrower's  fiscal year then  elapsed,  on a  consolidated  and
consolidating basis, certified by the principal financial officer of Borrower as
prepared  in  accordance  with  GAAP  and  fairly  presenting  the  consolidated
financial  position and results of operations  of Borrower and its  Subsidiaries
for such  month and period  subject  only to  changes  from  audit and  year-end
adjustments and except that such statements need not contain notes;

                  (d)    Projections.  No later than the end of each fiscal year
of Borrower,  such  projections of the business of Borrower and its Subsidiaries
as Lender shall request from time to time;

                  (e) Shareholder  Reports,  Etc.  Promptly after the sending or
filing thereof,  as the case may be, copies of any proxy  statements,  financial
statements or reports which Borrower has made available to its  shareholders and
copies of any regular,  periodic and special reports or registration  statements
which  Borrower  files  with  the  Securities  and  Exchange  Commission  or any
governmental  authority  which  may be  substituted  therefor,  or any  national
securities exchange;


                                       15

<PAGE>

                  (f)      ERISA Reports.  Upon request by Lender, copies of any
annual report to be filed  pursuant to the  requirements  of ERISA in connection
with each plan subject thereto; and

                  (g)  Other  Information.   Such  other  data  and  information
(financial and otherwise) as Lender,  from time to time, may reasonably request,
bearing  upon  or  related  to the  Collateral  or  Borrower's  and  each of its
Subsidiary's financial condition or results of operations.

         Concurrently with the delivery of the financial statements described in
clause (b) above,  Borrower  shall forward to Lender a copy of the  accountants'
letter  to  Borrower's  management  that is  prepared  in  connection  with such
financial statements.

         5.14. Litigation Cooperation. Should any third-party suit or proceeding
be  instituted  by or against  Lender with respect to any  Collateral  or in any
manner  relating to Borrower,  Borrower shall,  without expense to Lender,  make
available Borrower and its officers,  employees and agents, and Borrower's books
and records,  without charge, to the extent that Lender may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.

         5.15. Maintenance of Collateral, Etc. Borrower will maintain all of its
Equipment  in good  working  condition,  ordinary  wear and tear  excepted,  and
Borrower will not use the  Collateral  for any unlawful  purpose.  Borrower will
immediately  advise  Lender in  writing  of any  material  loss or damage to the
Collateral and of any investigation,  action, suit, proceeding or claim relating
to the  Collateral  or which may result in an  adverse  impact  upon  Borrower's
business, assets or financial condition.

         5.16. Notification of Changes.  Borrower will promptly notify Lender in
writing of any change in its officers or directors,  the opening of any new bank
account or other deposit account, or any material adverse change in the business
or  financial  affairs of Borrower or the  existence of any  circumstance  which
would make any  representation  or warranty of Borrower  untrue in any  material
respect or constitute a material breach of any covenant of Borrower.

         5.17. Further  Assurances.  Borrower agrees, at its expense to take all
actions,  and  execute  or cause to be  executed  and  delivered  to Lender  all
promissory notes, security agreements, agreements with landlords, mortgagees and
processors and other bailees,  subordination  and  intercreditor  agreements and
other  agreements,  instruments and documents as Lender may request from time to
time, to perfect and maintain Lender's security  interests in the Collateral and
to fully effectuate the transactions contemplated by this Agreement.


                                       16

<PAGE>

         5.18.  Negative  Covenants.  Borrower will not,  without Lender's prior
written consent which consent will not be unreasonably  withheld or delayed, (i)
merge or consolidate with another Person, form any new Subsidiary or acquire any
interest in any Person; (ii) acquire any assets except in the ordinary course of
business  and as  otherwise  permitted  by this  Agreement  and the  other  Loan
Documents;  (iii)  enter into any  transaction  outside the  ordinary  course of
business;  (iv) sell or transfer any  Collateral  or other  assets,  except that
Borrower  may sell  finished  goods  Inventory  in the  ordinary  course  of its
business;  (v) make any loans to, or investments in, any other Person (including
without  limitation Aero Management) in the form of money or other assets except
(a) that so long as no Event of Default is then in  existence or would be caused
thereby,  Borrower  may make loans of up to  $200,000  per fiscal year to Fields
Aircraft Spares,  Inc.  ("Spares") to permit Spares to pay filing fees and other
expenses  incurred with respect to its status as a public  company,  and (b) for
the loans  existing on the date hereof and set forth in Section 9(i) of Schedule
A; (vi) incur any debt outside the ordinary  course of business;  (vii) guaranty
or otherwise  become liable with respect to the  obligations of another party or
entity; (viii) pay or declare any dividends or other distributions on Borrower's
stock,  if Borrower is a  corporation  (except for dividends  payable  solely in
capital stock of Borrower) or with respect to any equity interests,  if Borrower
is not a  corporation;  (ix)  redeem,  retire,  purchase or  otherwise  acquire,
directly  or  indirectly,  any of  Borrower's  capital  stock  or  other  equity
interests; (x) make any change in Borrower's capital structure; (xi) dissolve or
elect to dissolve; (xii) pay any principal or interest on any indebtedness owing
to an Affiliate,  (xiii) enter into any transaction with an Affiliate other than
on arms-length terms; or (xiv) agree to do any of the foregoing.

         5.19.    Financial Covenants.

                  (a) Capital  Expenditures.  Borrower will not expend or commit
to expend,  directly or indirectly,  for capital expenditures (including capital
lease obligations) in excess of the amount set forth in Section 8(a) of Schedule
A as the Capital Expenditure Limitation in any fiscal year.

                  (b)      Net Worth.  Borrower will at all times maintain a net
worth of at least the  amount  set forth in  Section  8(b) of  Schedule A as the
Minimum Net Worth Requirement.

                  (c)      Working Capital.  Borrower will at all times maintain
working  capital of at least the amount set forth in Section  8(c) of Schedule A
as the Minimum Working Capital Requirement.

                  (d)      Other Financial Covenants.  Borrower will comply with
any additional financial covenants set forth in Section 8(f) of Schedule A.

6.       RELEASE AND INDEMNITY.

                                       17

<PAGE>

         6.1.  Release.  Borrower  hereby releases Lender and its Affiliates and
their respective directors,  officers,  employees,  attorneys and agents and any
other Person  affiliated  with or representing  Lender (the "Released  Parties")
from any and all liability  arising from acts or omissions  under or pursuant to
this  Agreement,  whether based on errors of judgment or mistake of law or fact,
except for those arising from gross negligence or willful  misconduct.  However,
in no circumstance  will any of the Released  Parties be liable for lost profits
or other  special or  consequential  damages.  Such  release is made on the date
hereof  and  remade  upon each  request  for a Loan or Credit  Accommodation  by
Borrower. Without limiting the foregoing:

                  (a)  Lender  shall  not be  liable  for  (i) any  shortage  or
discrepancy  in, damage to, or loss or  destruction  of, any goods,  the sale or
other  disposition  of which  gave  rise to an  Account;  (ii) any  error,  act,
omission,  or delay of any kind occurring in the settlement,  failure to settle,
collection or failure to collect any Account; (iii) settling any Account in good
faith  for  less  than  the  full  amount  thereof;  or (iv)  any of  Borrower's
obligations under any contract or agreement giving rise to an Account; and

                  (b) In connection with Credit Accommodations or any underlying
transaction,  Lender shall not be responsible for the conformity of any goods to
the documents  presented,  the validity or genuineness of any documents,  delay,
default or fraud by Borrower,  shippers and/or any other Person. Borrower agrees
that any action taken by Lender,  if taken in good faith, or any action taken by
an issuer of any Credit  Accommodation,  under or in connection  with any Credit
Accommodation,  shall be binding on Borrower and shall not create any  resulting
liability to Lender.  In furtherance  thereof,  Lender shall have the full right
and authority to clear and resolve any questions of non-compliance of documents,
to give any  instructions  as to  acceptance  or rejection  of any  documents or
goods, to execute for Borrower's  account any and all applications for steamship
or airway guaranties, indemnities or delivery orders, to grant any extensions of
the maturity of, time of payment  for, or time of  presentation  of, any drafts,
acceptances or documents, and to agree to any amendments,  renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the Credit Accommodations or applications and other documentation  pertaining
thereto.

         6.2.  Indemnity.  Borrower  hereby  agrees to  indemnify  the  Released
Parties and hold them  harmless  from and  against  any and all  claims,  debts,
liabilities,  demands, obligations,  actions, causes of action, penalties, costs
and  expenses  (including  attorneys'  fees),  of every  nature,  character  and
description,  which the  Released  Parties  may  sustain or incur  based upon or
arising out of any of the  transactions  contemplated  by this  Agreement or the
other Loan Documents or any of the  Obligations,  including any  transactions or
occurrences relating to the issuance of any Credit Accommodation, the Collateral
relating  thereto,  any drafts  thereunder and any errors or omissions  relating
thereto  (including any loss or claim due to any action or inaction taken by the


                                       18
<PAGE>

issuer of any Credit  Accommodation) (and for this purpose any charges to Lender
by  any  issuer  of  Credit  Accommodations  shall  be  conclusive  as to  their
appropriateness  and may be charged to the Loan  Account),  or any other matter,
cause or thing  whatsoever  occurred,  done,  omitted or  suffered to be done by
Lender  relating  to  Borrower  or the  Obligations  (except  any  such  amounts
sustained  or incurred as the result of the willful  misconduct  of the Released
Parties).  Notwithstanding any provision in this Agreement to the contrary,  the
indemnity  agreement set forth in this Section shall survive any  termination of
this Agreement.

7.       TERM.

         7.1.  Maturity Date.  Lender's  obligation to make Loans and to provide
Credit  Accommodations  under this Agreement shall initially  continue in effect
until the  Initial  Maturity  Date set forth in  Section  7 of  Schedule  A (the
"Initial Term");  provided,  that such date shall automatically be extended (the
Initial  Maturity  Date,  as it may be so  extended,  being  referred  to as the
"Maturity  Date") for  successive  additional  terms of three years each (each a
"Renewal  Term"),  unless one party gives written notice to the other,  not less
than sixty (60) days prior to the Maturity  Date,  that such party elects not to
extend the  Maturity  Date.  This  Agreement  and the other Loan  Documents  and
Lender's  security  interests  in  and  Liens  upon  the  Collateral,   and  all
representations,  warranties  and  covenants  of Borrower  contained  herein and
therein, shall remain in full force and effect after the Maturity Date until all
of the monetary Obligations are indefeasibly paid in full.

         7.2.  Early  Termination.  Lender's  obligation  to make  Loans  and to
provide Credit  Accommodations  under this Agreement may be terminated  prior to
the Maturity Date as follows:  (i) by Borrower,  effective  thirty (30) business
days after written notice of termination is given to Lender or (ii) by Lender at
any time after the occurrence of an Event of Default,  without notice, effective
immediately.  Notwithstanding the foregoing,  no such early termination shall be
effective unless Aero Management  simultaneously  terminates the Aero Management
Loan  Agreement.  If so terminated by Borrower under this Section 7.2,  Borrower
shall pay to Lender (i) an early  termination fee (the "Early  Termination Fee")
in the amount set forth in Section  6(h) of  Schedule A plus (ii) any earned but
unpaid  Facility Fee. Such fee shall be due and payable on the effective date of
termination  and  thereafter  shall bear interest at a rate equal to the highest
rate  applicable  to  any  of the  Obligations.  In  addition,  if  Borrower  so
terminates and repays the  Obligations  without having  provided  Lender with at
least thirty (30) days' prior written notice thereof, an additional amount equal
to thirty (30) days of interest at the applicable Interest Rate(s), based on the
average  outstanding  amount  of  the  Obligations  for  the  six  month  period
immediately preceding the date of termination.

         7.3.     Payment of Obligations. On the Maturity Date or on any earlier
effective  date of  termination,  Borrower  shall  pay and  perform  in full all
Obligations,  whether or not all or any part of such  Obligations  are otherwise


                                       19

<PAGE>

then due and payable.  Without limiting the generality of the foregoing,  if, on
the Maturity Date or on any earlier effective date of termination, there are any
outstanding Credit  Accommodations,  then on such date Borrower shall provide to
Lender cash  collateral  in an amount equal to 110% of the Credit  Accommodation
Balance to secure all of the Obligations  (including  estimated  attorneys' fees
and other  expenses)  relating to said  Credit  Accommodations  or such  greater
percentage or amount as Lender reasonably deems appropriate,  pursuant to a cash
pledge agreement in form and substance satisfactory to Lender.

         7.4. Effect of Termination.  No termination  shall affect or impair any
right or remedy of Lender or relieve  Borrower of any of the  Obligations  until
all of the  monetary  Obligations  have  been  indefeasibly  paid in full.  Upon
indefeasible  payment and performance in full of all of the monetary Obligations
(or the provision of cash  collateral  with respect to the Credit  Accommodation
Balance as set forth in Section 7.3) and termination of this  Agreement,  Lender
shall  promptly  deliver  to  Borrower  termination  statements,   requests  for
reconveyances  and  such  other  documents  as may  be  reasonably  required  to
terminate Lender's security interests in the Collateral.

8.       EVENTS OF DEFAULT AND REMEDIES.

         8.1. Events of Default.  The occurrence of any of the following  events
shall constitute an "Event of Default" under this Agreement,  and Borrower shall
give  Lender   immediate   written   notice   thereof:   (i)  if  any  warranty,
representation,  statement, report or certificate made or delivered to Lender by
Borrower  or any of  Borrower's  officers,  employees  or  agents  is  untrue or
misleading;  (ii) if Borrower fails to pay when due any principal or interest on
any Loan or any  other  monetary  Obligation;  (iii) if  Borrower  breaches  any
covenant or obligation contained in this Agreement or any other Loan Document or
fails  to  perform  any  other  non-monetary  Obligation;   (iv)  if  any  levy,
assessment,  attachment,  seizure,  lien or encumbrance  (other than a Permitted
Lien) is made or permitted to exist on all or any part of the Collateral; (v) if
one or more  judgments  aggregating  in excess of $25,000,  or any injunction or
attachment,  is  obtained  against  Borrower  or any  Obligor  or which  remains
unstayed for more than ten (10) days or is enforced;  (vi) the occurrence of any
default under any financing  agreement,  security  agreement or other agreement,
instrument or document  executed and delivered by (A) Borrower with, or in favor
of, any Person  other than Lender or (B)  Borrower or any  Affiliate of Borrower
with, or in favor of, Lender or any Affiliate of Lender;  (vii) the dissolution,
death, termination of existence in good standing, insolvency or business failure
or  suspension  or cessation of business as usual of Borrower or any Obligor (or
of any general partner of Borrower or any Obligor if it is a partnership) or the
appointment  of a  receiver,  trustee  or  custodian  for all or any part of the
property  of, or an  assignment  for the benefit of creditors by Borrower or any
Obligor,  or the commencement of any proceeding by Borrower or any Obligor under
any reorganization,  bankruptcy, insolvency, arrangement,  readjustment of debt,
dissolution or  liquidation  law or statute of any  jurisdiction,  now or in the
future in effect,  or if Borrower  makes or sends a notice of a bulk transfer or


                                       20
<PAGE>

calls a meeting of its  creditors;  (viii) the  commencement  of any  proceeding
against   Borrower  or  any  Obligor  under  any   reorganization,   bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction,  now or in the future in effect; (ix) the actual or
attempted  revocation  or  termination  of, or limitation or denial of liability
upon, any guaranty of the  Obligations or any security  document by any Obligor;
(x) if Borrower makes any payment on account of any  indebtedness  or obligation
which has been  subordinated to the  Obligations  other than as permitted in the
applicable  subordination  agreement, or if any Person who has subordinated such
indebtedness  or  obligations  attempts to limit or terminate its  subordination
agreement;  (xi) if there is any actual or threatened  indictment of Borrower or
any  Obligor  under  any  criminal   statute  or   commencement   or  threatened
commencement of criminal or civil  proceedings  against Borrower or any Obligor,
pursuant  to which the  potential  penalties  or  remedies  sought or  available
include  forfeiture of any property of Borrower or such Obligor;  (xii) if there
is a change in the record or  beneficial  ownership of an aggregate of more than
20% of the outstanding shares of stock of Borrower (or partnership or membership
interests if it is a partnership or limited liability  company),  in one or more
transactions,  compared  to the  ownership  of  outstanding  shares of stock (or
partnership or membership interests) of Borrower as of the date hereof,  without
the prior written consent of Lender;  (xiii) if there is any change in the chief
executive officer,  chairman or chief financial officer of Borrower; (xiv) if an
event of default occurs under the Aero  Management  Loan  Agreement;  or (xv) if
Lender  determines in good faith that the  Collateral is  insufficient  to fully
secure the  Obligations  or that the prospect of payment of  performance  of the
Obligations is impaired.

         8.2. Remedies.  Upon the occurrence of any Event of Default, and at any
time thereafter, Lender, at its option, and without notice or demand of any kind
(all of which are hereby expressly  waived by Borrower),  may do any one or more
of the  following:  (i) cease  making  Loans or  otherwise  extending  credit to
Borrower under this Agreement or any other Loan  Document;  (ii)  accelerate and
declare all or any part of the  Obligations to be immediately  due,  payable and
performable, notwithstanding any deferred or installment payments allowed by any
instrument  evidencing  or  relating  to  any  of the  Obligations;  (iii)  take
possession  of any or all of the  Collateral  wherever it may be found,  and for
that purpose Borrower hereby authorizes  Lender,  without judicial  process,  to
enter onto any of Borrower's  premises without  interference to search for, take
possession  of, keep,  store,  or remove any of the  Collateral,  and remain (or
cause a custodian  to remain) on the  premises  in  exclusive  control  thereof,
without  charge for so long as Lender deems it reasonably  necessary in order to
complete  the  enforcement  of its  rights  under  this  Agreement  or any other
agreement;  provided,  that if  Lender  seeks to take  possession  of any of the
Collateral by court process, Borrower hereby irrevocably waives (A) any bond and
any surety or security  relating  thereto required by law as an incident to such
possession,  (B) any demand for possession prior to the commencement of any suit
or action to recover  possession  thereof  and (C) any  requirement  that Lender
retain  possession of, and not dispose of, any such Collateral until after trial


                                       21
<PAGE>

or  final  judgment;  (iv)  require  Borrower  to  assemble  any  or  all of the
Collateral  and make it available to Lender at one or more places  designated by
Lender which are reasonably convenient to Lender and Borrower, and to remove the
Collateral  to such  locations  as Lender may deem  advisable;  (v) complete the
processing,  manufacturing  or repair of any  Collateral  prior to a disposition
thereof and, for such purpose and for the purpose of removal,  Lender shall have
the right to use Borrower's premises, vehicles and other Equipment and all other
property  without charge;  (vi) sell,  lease or otherwise  dispose of any of the
Collateral,  in its  condition at the time Lender  obtains  possession  of it or
after  further  manufacturing,  processing  or repair,  at one or more public or
private sales, in lots or in bulk, for cash,  exchange or other property,  or on
credit (a "Sale"), and to adjourn any such Sale from time to time without notice
other than oral  announcement at the time scheduled for Sale (and, in connection
therewith,  (A) Lender shall have the right to conduct  such Sale on  Borrower's
premises without charge, for such times as Lender deems reasonable,  on Lender's
premises,  or elsewhere,  and the Collateral need not be located at the place of
Sale; (B) Lender may directly or through any of its Affiliates purchase or lease
any of the Collateral at any such public  disposition,  and if permissible under
applicable law, at any private  disposition and (C) any Sale of Collateral shall
not relieve  Borrower of any  liability  Borrower may have if any  Collateral is
defective  as to title,  physical  condition  or otherwise at the time of sale);
(vii) demand payment of and collect any Accounts, Chattel Paper, Instruments and
General  Intangibles  included in the Collateral  and, in connection  therewith,
Borrower irrevocably authorizes Lender to endorse or sign Borrower's name on all
collections,  receipts,  Instruments and other documents,  to take possession of
and open mail  addressed to Borrower  and remove  therefrom  payments  made with
respect to any item of  Collateral  or proceeds  thereof  and, in Lender's  sole
discretion,  to grant  extensions of time to pay,  compromise  claims and settle
Accounts,  General Intangibles and the like for less than face value; and (viii)
demand and receive  possession of any of Borrower's federal and state income tax
returns  and the  books and  records  utilized  in the  preparation  thereof  or
relating thereto. In addition to the rights and remedies set forth above, Lender
shall have all the other  rights and  remedies  accorded a secured  party  after
default under the UCC and under all other  applicable  laws, and under any other
Loan  Document,  and  all  of  such  rights  and  remedies  are  cumulative  and
non-exclusive.  Exercise  or  partial  exercise  by Lender of one or more of its
rights or remedies shall not be deemed an election or bar Lender from subsequent
exercise or partial  exercise of any other  rights or  remedies.  The failure or
delay of Lender to exercise any rights or remedies shall not operate as a waiver
thereof,  but all rights and  remedies  shall  continue in full force and effect
until all of the  Obligations  have been fully paid and performed.  If notice of
any sale or other  disposition of Collateral is required by law, notice at least
seven (7) days prior to the sale  designating  the time and place of sale in the
case of a  public  sale or the  time  after  which  any  private  sale or  other
disposition is to be made shall be deemed to be reasonable  notice, and Borrower
waives any other notice. If any Collateral is sold or leased by Lender on credit
terms or for future delivery,  the Obligations  shall not be reduced as a result
thereof until payment is collected by Lender.


                                       22
<PAGE>

         8.3.  Application of Proceeds.  Subject to any application  required by
law, all proceeds  realized as the result of any Sale shall be applied by Lender
to the  Obligations  in  such  order  as  Lender  shall  determine  in its  sole
discretion.  Any  surplus  shall be paid to Borrower  or other  persons  legally
entitled thereto; but Borrower shall remain liable to Lender for any deficiency.
If Lender, in its sole discretion, directly or indirectly enters into a deferred
payment or other credit transaction with any purchaser at any Sale, Lender shall
have the option,  exercisable  at any time,  in its sole  discretion,  of either
reducing  the  Obligations  by the  principal  amount of the  purchase  price or
deferring the reduction of the Obligations until the actual receipt by Lender of
the cash therefor.

9.       GENERAL PROVISIONS.

         9.1. Notices.  All notices to be given under this Agreement shall be in
writing and shall be given  either  personally,  by reputable  private  delivery
service, by regular first-class mail or certified mail return receipt requested,
addressed  to Lender at the address  shown in the heading to this  Agreement  or
Borrower at 2251-A Ward Avenue,  Simi Valley,  California 93065, or by facsimile
to the  facsimile  number  shown in Section  9(j) of Schedule A, or at any other
address (or to any other facsimile number) designated in writing by one party to
the other party in the manner  prescribed in this Section 9.1. All notices shall
be deemed to have been given when  received  or when  delivery is refused by the
recipient.

         9.2.     Severability.  If  any  provision  of  this  Agreement, or the
application  thereof  to any  party  or  circumstance,  is  held  to be  void or
unenforceable  by any court of  competent  jurisdiction,  such defect  shall not
affect the remainder of this  Agreement,  which shall continue in full force and
effect.

         9.3.     Integration.  This  Agreement  and  the  other  Loan Documents
represent the final,  entire and complete  agreement between Borrower and Lender
and supersede all prior and contemporaneous  negotiations,  oral representations
and  agreements,  all of which are merged and  integrated  into this  Agreement.
THERE ARE NO ORAL UNDER- STANDINGS,  REPRESENTATIONS  OR AGREEMENTS  BETWEEN THE
PARTIES WHICH ARE NOT SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

         9.4.  Waivers.  The  failure  of Lender at any time or times to require
Borrower to strictly  comply with any of the provisions of this Agreement or any
other Loan  Documents  shall not waive or diminish  any right of Lender later to
demand and receive strict compliance therewith.  Any waiver of any default shall
not waive or affect any other default, whether prior or subsequent,  and whether
or not  similar.  None of the  provisions  of this  Agreement  or any other Loan
Document  shall be deemed to have been waived by any act or  knowledge of Lender
or its agents or employees,  but only by a specific  written waiver signed by an
authorized officer of Lender and delivered to Borrower.  Borrower waives demand,


                                       23
<PAGE>

protest, notice of protest and notice of default or dishonor,  notice of payment
and nonpayment,  release,  compromise,  settlement,  extension or renewal of any
commercial paper,  Instrument,  Account, General Intangible,  Document,  Chattel
Paper,  Investment  Property  or  guaranty  at any time  held by Lender on which
Borrower  is or may in any way be  liable,  and  notice of any  action  taken by
Lender,  unless expressly  required by this Agreement,  and notice of acceptance
hereof.

         9.5.     Amendment.  The terms and provisions of this Agreement may not
be amended or  modified  except in a writing  executed  by  Borrower  and a duly
authorized officer of Lender.

         9.6.     Time of Essence.  Time is of the essence in the performance by
Borrower of each and every  obligation  under this  Agreement and the other Loan
Documents.

         9.7. Attorneys Fees and Costs.  Borrower shall reimburse Lender for all
reasonable  attorneys' and paralegals'  fees (including  in-house  attorneys and
paralegals  employed  by  Lender)  and  all  filing,  recording,  search,  title
insurance, appraisal, audit, and other costs incurred by Lender, pursuant to, in
connection  with,  or  relating  to this  Agreement,  including  all  reasonable
attorneys'  fees and costs Lender incurs to prepare and negotiate this Agreement
and the other Loan  Documents;  to obtain legal advice in  connection  with this
Agreement and the other Loan Documents or Borrower or any Obligor; to administer
this  Agreement  and the other Loan  Documents  (including  the cost of periodic
financing  statement,  tax lien and other  searches  conducted  by  Lender);  to
enforce,  or seek to enforce,  any of its rights;  prosecute actions against, or
defend actions by,  Account  Debtors;  to commence,  intervene in, or defend any
action or proceeding;  to initiate any complaint to be relieved of the automatic
stay in bankruptcy;  to file or prosecute any probate claim,  bankruptcy  claim,
third-party  claim, or other claim; to examine,  audit, copy, and inspect any of
the  Collateral  or any of  Borrower's  books and  records;  to protect,  obtain
possession  of,  lease,  dispose  of, or  otherwise  enforce  Lender's  security
interests  in,  the  Collateral;  and  to  otherwise  represent  Lender  in  any
litigation relating to Borrower.  If either Lender or Borrower files any lawsuit
against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its reasonable  costs and attorneys'
fees, including reasonable attorneys' fees and costs incurred in the enforcement
of,  execution  upon or defense of any order,  decree,  award or  judgment.  All
attorneys'  fees and costs to which  Lender  may be  entitled  pursuant  to this
Section  shall  immediately  become  part of the  Obligations,  shall  be due on
demand,  and shall bear  interest at a rate equal to the highest  interest  rate
applicable to any of the Obligations.

         9.8.     Benefit of  Agreement;  Assignability.  The provisions of this
Agreement  shall be  binding  upon and inure to the  benefit  of the  respective
successors,  assigns,  heirs,  beneficiaries and representatives of Borrower and
Lender;  provided,  that  Borrower  may not assign or transfer any of its rights


                                       24
<PAGE>

under this  Agreement  without  the prior  written  consent  of Lender,  and any
prohibited  assignment  shall be void.  No consent  by Lender to any  assignment
shall release  Borrower from its  liability for any of the  Obligations.  Lender
shall have the right to assign all or any of its  rights and  obligations  under
the Loan Documents,  and to sell participating interests therein, to one or more
other Persons,  and Borrower agrees to execute all  agreements,  instruments and
documents  requested  by Lender in  connection  with  each such  assignment  and
participation.

         9.9. Joint and Several Liability. If Borrower consists of more than one
Person,  their liability  shall be joint and several,  and the compromise of any
claim with,  or the release of, any Borrower  shall not  constitute a compromise
with, or a release of, any other Borrower or any other Obligor.

         9.10. Headings; Construction.  Section and subsection headings are used
in this Agreement only for convenience. Borrower and Lender acknowledge that the
headings  may not  describe  completely  the  subject  matter of the  applicable
Sections or  subsections,  and the  headings  shall not be used in any manner to
construe,  limit,  define or interpret any term or provision of this  Agreement.
This Agreement has been fully reviewed and negotiated between the parties and no
uncertainty  or ambiguity in any term or  provision of this  Agreement  shall be
construed  strictly against Lender or Borrower under any rule of construction or
otherwise.

         9.11.  GOVERNING  LAW;  CONSENT TO FORUM,  ETC. THIS AGREEMENT HAS BEEN
NEGOTIATED,  EXECUTED AND  DELIVERED,  AND SHALL BE DEEMED TO HAVE BEEN MADE, IN
NEW YORK,  NEW YORK,  AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH
THE LAWS OF SUCH STATE.  BORROWER  HEREBY CONSENTS AND AGREES THAT THE STATE AND
FEDERAL  COURTS  IN NEW  YORK OR THE  STATE IN WHICH  ANY OF THE  COLLATERAL  IS
LOCATED SHALL HAVE  NON-EXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN BORROWER AND LENDER PERTAINING TO THIS AGREEMENT,  ANY OTHER
LOAN  DOCUMENTS OR ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS. BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION  IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,  AND WAIVES ANY
OBJECTION  WHICH  BORROWER  MAY HAVE BASED UPON LACK OF  PERSONAL  JURISDICTION,
IMPROPER VENUE OR FORUM NON  CONVENIENS.  BORROWER ALSO AGREES THAT ANY CLAIM OR
DISPUTE BROUGHT BY BORROWER AGAINST LENDER PURSUANT TO THIS AGREEMENT, ANY OTHER
LOAN  DOCUMENT  OR ANY MATTER  ARISING OUT OF THIS  AGREEMENT  OR ANY OTHER LOAN
DOCUMENT  SHALL BE BROUGHT  EXCLUSIVELY  IN THE STATE AND FEDERAL  COURTS OF NEW
YORK.  BORROWER  HEREBY WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT AND
OTHER PROCESS  ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH


                                       25

<PAGE>

SUMMONS,  COMPLAINT  AND OTHER  PROCESS  MAY BE MADE IN THE  MANNER AND SHALL BE
DEEMED RECEIVED AS SET FORTH IN SECTION 9.1 FOR NOTICES, TO THE EXTENT PERMITTED
BY LAW. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT
OF LENDER TO SERVE LEGAL  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW, OR TO
PRECLUDE THE  ENFORCEMENT  BY LENDER OF ANY  JUDGMENT OR ORDER  OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION  UNDER THIS  AGREEMENT  TO ENFORCE THE SAME IN
ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

         9.12. WAIVER OF JURY TRIAL, ETC. BORROWER WAIVES (i) THE RIGHT TO TRIAL
BY  JURY  (WHICH  LENDER  ALSO  WAIVES)  IN  ANY  ACTION,  SUIT,  PROCEEDING  OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS OR THE COLLATERAL OR ANY CONDUCT, ACTS OR OMISSIONS OF LENDER OR
BORROWER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR
AGENTS OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, WHETHER SOUNDING
IN  CONTRACT,  TORT OR  OTHERWISE;  (ii  THE  RIGHT  TO  INTERPOSE  ANY  CLAIMS,
DEDUCTIONS,  SETOFFS OR  COUNTERCLAIMS  OF ANY KIND IN ANY ACTION OR  PROCEEDING
INSTITUTED BY LENDER WITH RESPECT TO THE LOAN  DOCUMENTS OR ANY MATTER  RELATING
THERETO,  EXCEPT FOR  COMPULSORY  COUNTERCLAIMS;  (iii) NOTICE PRIOR TO LENDER'S
TAKING  POSSESSION OR CONTROL OF THE  COLLATERAL  OR ANY BOND OR SECURITY  WHICH
MIGHT BE  REQUIRED BY ANY COURT  PRIOR TO  ALLOWING  LENDER TO  EXERCISE  ANY OF
LENDER'S  REMEDIES  AND (iv) THE  BENEFIT  OF ALL  VALUATION,  APPRAISEMENT  AND
EXEMPTION LAWS. BORROWER  ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO LENDER'S  ENTERING INTO THIS  AGREEMENT AND THAT LENDER IS RELYING
UPON THE  FOREGOING  WAIVERS  IN ITS FUTURE  DEALINGS  WITH  BORROWER.  BORROWER
WARRANTS AND  REPRESENTS  THAT IT HAS REVIEWED  THE  FOREGOING  WAIVERS WITH ITS
LEGAL  COUNSEL AND HAS KNOWINGLY  AND  VOLUNTARILY  WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING  CONSULTATION  WITH LEGAL COUNSEL.  IN THE EVENT OF  LITIGATION,  THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


                                       26

<PAGE>

         IN WITNESS  WHEREOF,  Borrower and Lender have signed this Agreement as
of the date set forth in the heading.

Borrower:                                Lender:
FIELDS AIRCRAFT SPARES                   NATIONSCREDIT COMMERCIAL
INCORPORATED                             CORPORATION, THROUGH ITS
                                         NATIONSCREDIT COMMERCIAL FUNDING
                                         DIVISION
By___________________________________
Its__________________________________    By__________________________________
                                           Its Authorized Signatory




                                       27



<PAGE>








                                                    Schedule A

Description of Certain Terms

         This  Schedule is an integral  part of the Loan and Security  Agreement
between  FIELDS  AIRCRAFT  SPARES  INCORPORATED  and  NationsCredit   Commercial
Corporation,   through  its  NationsCredit   Commercial  Funding  Division  (the
"Agreement").
1.       Loan Limits for Revolving Loans:
   (a)      Maximum                     $10,000,000
            Facility Amount:
   (b)      Advance Rates:
            (i)      Accounts           80%; provided, that if the Dilution
                     Advance            Percentage exceeds 5%, such advance rate
                     Rate:              will be reduced by the number of full or
                                        partial percentage points of such excess
            (ii)     Inventory
                     Advance
                     Rate(s):
            (A)      Finished
                     goods
                     consisting
                     of
                     Ordinary
                     Inventory:         50%
            (B)      Finished
                     goods
                     consisting
                     of MDC
                     Inventory:         67%
            (C)      Raw
                     materials:         not applicable
            (D)      Work in
                     process:           not applicable
   (c)      Accounts                    At any time of determination, the
            Sublimit:                   Maximum Fields Facility Amount less the
                                        aggregate advances against Inventory
                                        outstanding at such time


                                       A-1

<PAGE>

   (d)      Inventory
            Sublimit(s):
            (i)      Overall            $10,000,000, minus the portion of the
                     sublimit           Aero Management Loan Balance at such
                     on                 time that is predicated on eligible
                     advances           inventory of Aero Management
                     against
                     Eligible
                     Inventory
            (ii)     Sublimit          $4,000,000, minus the portion of the Aero
                     on                Management Loan Balance at such time
                     advances          that is predicated on finished goods
                     against           Inventory of Aero Management
                     finished
                     goods
                     consisting
                     of
                     Ordinary
                     Inventory
            (iii)    Sublimit           $6,500,000, reducing on the first day of
                     on                 each month commencing June 1, 1997 by
                     advances           the greater of $100,000 or 50% of net
                     against            sales of MDC Inventory during the prior
                     finished           month
                     goods
                     consisting
                     of MDC
                     Inventory
            (iv)     Sublimit on
                     advances
                     against            not applicable
                     raw
                     materials
            (v)      Sublimit
                     on
                     advances
                     against            not applicable
                     work in
                     process
   (e)      Credit Accommodation
            Limit:                      not applicable


                                       A-2
<PAGE>

   (f)      Permanent
            Reserve Amount:             not applicable
   (g)      Maximum Fields              $10,000,000, minus the Aero Management
            Facility Amount             Loan Balance at such time
   2.       Loan Limits for Term Loan:
   (a)      Principal                   not applicable
            Amount:
   (b)      Repayment                   not applicable
            Schedule:
   3.       Interest Rates:
   (a)      Revolving Loans:            3.00% per  annum  in excess  of the
                                        Prime Rate
   (b)      Term Loan:                  not applicable
   4.       Minimum Loan                not applicable
            Amount:
   5.       Maximum days after
            invoice date for Eligible
            Accounts:                   90
   6.       Fees:
   (a)      Closing Fee:                $100,000
   (b)      Facility Fee:
            (i)      Initial            $150,000
                     Term:
            (ii)     Renewal
                     Term(s):           $225,000
   (c)      Servicing Fee:              not applicable
   (d)      Unused Line                 0.50% per annum
            Fee:
   (e)      Minimum
            Borrowing Fee:              not applicable
            (i)      Applicable
                     period:            not applicable
            (ii)     Date               not applicable
                     payable:
   (f)      Success Fee:               not applicable
   (g)      Warrants:                  Warrant Certificate dated the date hereof
                                       issued to Lender for 40,000 shares of
                                       common stock of Fields Aircraft Spares,
                                       Inc.


                                       A-3
<PAGE>

   (h)      Early                       3% of Maximum Facility Amount if
            Termination Fee:            terminated during the first year of the
                                        Term,   2%   of   Maximum
                                        Facility     Amount    if
                                        terminated   during   the
                                        second  year of the Term,
                                        and    1%   of    Maximum
                                        Facility     Amount    if
                                        terminated thereafter and
                                        prior  to  the   Maturity  Date
   (i)      Fees for letters of
            credit (or
            guaranties by               not applicable
            Lender):
   (j)      Fees for other
            Credit                      not applicable
            Accommodations:
   7.       Initial Maturity Date:      April 18, 2000
   8.       Financial Covenants:
   (a)      Capital
            Expenditure                 not applicable
            Limitation:
   (b)      Minimum Net
            Worth                       not applicable
            Requirement:
   (c)      Minimum
            Working Capital             not applicable
            Requirement:
   (d)      Limitation on
            Purchase Money
            Security                    not applicable
            Interests:
   (e)      Limitation on
            Equipment                   not applicable
            Leases:
   (f)      Additional
            Financial                   not applicable
            Covenants:
   9.       Borrower Information:
   (a)      Prior Names of
            Borrower:                   None
   (b)      Prior Trade
            Names of                    None
            Borrower:
   (c)      Existing Trade
            Names of                    None
            Borrower:


                                       A-4

<PAGE>

   (d)      Inventory                   341 "A" Street
            Locations:                  Fillmore, California 93015
   (e)      Other Locations:            2251-A Ward Avenue
                                        Simi Valley, California 93065
   (f)      Litigation:                 Ferguson labor matter
   (g)      Ownership of                100% owned by Fields Aircraft Spares,
            Borrower:                   Inc., a Utah corporation
   (h)      Subsidiaries (and
            ownership                   None
            thereof):
   (i)      Existing Loans:             $8,000 principal balance owed by Aero
                                        Management  and  $203,000
                                        principal balance owed by
                                        Fields  Aircraft  Spares, Inc.
   (j)      Facsimile
            Numbers:
            Borrower:                   (805) 583-0825
            Lender:                     (212) 597-1666
10.  Description of Real                See attached Exhibit A
     Property:
11.  Lender's Bank:                     The First National Bank of Chicago
                                        One First National Plaza
                                        Chicago, Illinois 60670

                                       A-5

<PAGE>

    IN WITNESS  WHEREOF,  Borrower and Lender have signed this  Schedule A as of
the date set forth in the heading to the Agreement.

Borrower:                                  Lender:

FIELDS AIRCRAFT SPARES                     NATIONSCREDIT COMMERCIAL
INCORPORATED                               CORPORATION, THROUGH ITS
                                           NATIONSCREDIT COMMERCIAL FUNDING
                                           DIVISION
By___________________________________
Its__________________________________      By__________________________________
                                                 Its Authorized Signatory



                                       A-6

<PAGE>


                                   Schedule B

Definitions

         This  Schedule is an integral  part of the Loan and Security  Agreement
between  FIELDS  AIRCRAFT  SPARES  INCORPORATED  and  NATIONSCREDIT   COMMERCIAL
CORPORATION, THROUGH ITS NATIONSCREDIT COMMERCIAL FUNDING (the
"Agreement").

         As used in the  Agreement,  the  following  terms  have  the  following
meanings:

         "Account"  means any right to  payment  for Goods sold or leased or for
services  rendered  which is not evidenced by an  Instrument  or Chattel  Paper,
whether or not it has been earned by performance.

         "Account Debtor" means the obligor on an Account or Chattel Paper.

         "Account Proceeds" has the meaning set forth in Section 4.1.

         "Aero Management" means Fields Aero Management, Inc., a California
corporation and an Affiliate of Borrower.

         "Aero Management Loan Agreement" means the Loan and Security  Agreement
of even date herewith  between Aero Management and Lender,  as it may be amended
from time to time.

         "Aero  Management  Loan Balance" means the  outstanding  balance of all
monetary  obligations  (including  without limitation the aggregate undrawn face
amount of all  outstanding  letters of  credit,  bankers  acceptances  and other
credit  accommodations  and all  interest,  fees and costs  due or, in  Lender's
estimation,  likely to become due in connection  therewith)  of Aero  Management
under the Aero Management Loan Agreement.

         "Affiliate"  means,  with respect to any Person,  a relative,  partner,
shareholder, member, manager, director, officer, or employee of such Person, any
parent or subsidiary of such Person, or any Person controlling, controlled by or
under common control with such Person or any other Person  affiliated,  directly
or  indirectly,  by  virtue  of  family  membership,  ownership,  management  or
otherwise other than McDonnell Douglas Corporation or any of its affiliates.

         "Agreement" and "this  Agreement" mean the Loan and Security  Agreement
of which this Schedule B is a part and the Schedules thereto.


                                       B-1

<PAGE>


         "Availability" has the meaning set forth in Section 1.1(a)

         "Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.ss.
101 et seq.).

         "Blocked Account" has the meaning set forth in Section 4.1.

         "Borrower" has the meaning set forth in the heading to the Agreement.

         "Borrower's  Address" has  the meaning set forth  in the heading to the
Agreement.

         "Borrower  Guaranty" means the Guaranty of even date herewith  executed
by Borrower,  pursuant to which Borrower has guaranteed repayment in full of the
Aero Management Loan Balance.

         "Business Day" means a day other than a Saturday or Sunday or any other
day on which Lender or banks in New York are authorized to close.

         "Chattel Paper" has the meaning set forth in the UCC.

         "Collateral"  means all property  and  interests in property in or upon
which a security interest or other Lien is granted pursuant to this Agreement or
the other Loan Documents.

         "Credit Accommodation" has the meaning set forth in Section 1.1(a).

         "Credit  Accommodation  Balance"  means  the sum of (i)  the  aggregate
undrawn  face  amount  of all  outstanding  Credit  Accommodations  and (ii) all
interest, fees and costs due or, in Lender's estimation, likely to become due in
connection therewith.

         "Default"  means any event  which with  notice or  passage of time,  or
both, would constitute an Event of Default.

         "Default Rate" has the meaning set forth in Section 2.1.

         "Deposit Account" has the meaning set forth in the UCC.

         "Dilution   Percentage"   means  the  gross   amount  of  all  returns,
allowances,  discounts,  credits,  write-offs  and  similar  items  relating  to
Borrower's  Accounts as a percentage of Borrower's gross sales,  calculated on a
ninety (90) day rolling average.

         "Document" has the meaning set forth in the UCC.


                                       B-2
<PAGE>

         "Early Termination Fee" has the meaning set forth in Section 7.2.

         "Eligible  Account"  means,  at any time of  determination,  an Account
which  satisfies  the general  criteria  set forth below and which is  otherwise
acceptable to Lender (provided, that Lender may, in its sole discretion,  change
the  general  criteria  for  acceptability  of Eligible  Accounts  upon at least
fifteen (15) days' prior notice to Borrower). An Account shall be deemed to meet
the current  general  criteria if (i) neither the Account  Debtor nor any of its
Affiliates is an  Affiliate,  creditor or supplier of Borrower  (provided,  that
Accounts deemed to be ineligible solely by reason of this clause (i) because the
Account  Debtor is a  creditor  or  supplier  of  Borrower  shall be  considered
Eligible  Accounts to the extent the amount of such Accounts  exceeds the amount
owing by Borrower to such Account  Debtor);  (ii) it does not remain unpaid more
than the number of days after the  original  invoice date set forth in Section 5
of Schedule A; (iii) the Account  Debtor or its  Affiliates  are not past due on
other Accounts owing to Borrower comprising more than 50% of all of the Accounts
owing to Borrower by such Account  Debtor or its  Affiliates;  (iv) all Accounts
owing by the Account  Debtor or its Affiliates do not represent more than 25% of
all otherwise  Eligible Accounts unless otherwise  approved by Lender (provided,
that Accounts which are deemed to be ineligible solely by this clause (iv) shall
be considered  Eligible  Accounts to the extent of the amount thereof which does
not  exceed  20%  of  all  otherwise  Eligible   Accounts);   (v)  no  covenant,
representation  or warranty  contained  in this  Agreement  with respect to such
Account (including any of the representations set forth in Section 5.4) has been
breached;   (vi)  the  Account  is  not  subject  to  any  contra  relationship,
counterclaim,  dispute or set-off;  (vii) the Account  Debtor's chief  executive
office or  principal  place of  business  is  located  in the  United  States or
Provinces of Canada which have adopted the Personal  Property  Security Act or a
similar act, unless (A) the sale is fully backed by a letter of credit, guaranty
or acceptance  acceptable to Lender in its sole  discretion,  and if backed by a
letter of credit,  such letter of credit has been issued or  confirmed by a bank
satisfactory to Lender, is sufficient to cover such Account,  and if required by
Lender,  the  original of such letter of credit has been  delivered to Lender or
Lender's agent and the issuer thereof notified of the assignment of the proceeds
of such  letter of credit to  Lender,  or (B) such  Account is subject to credit
insurance  payable to Lender  issued by an insurer and on terms and in an amount
acceptable  to Lender;  provided,  that an aggregate  amount of up to $75,000 of
foreign  Accounts in excess of the  existing  credit  insurance  limits shall be
deemed to be subject to credit  insurance  so long as  Borrower  has applied for
acceptable credit insurance relating to such Accounts or credit insurance in any
amount is already in effect for such  Account  Debtor;  (viii) it is  absolutely
owing to Borrower and does not arise from a sale on a bill-and-hold,  guarantied
sale,  sale-or-return,  sale-on-approval,  consignment,  retainage  or any other
repurchase  or return basis or consist of progress  billings;  (ix) Lender shall
have verified the Account in a manner  satisfactory  to Lender;  (x) the Account
Debtor is not the United States of America or any state or political subdivision
(or any  department,  agency or  instrumentality  thereof),  unless Borrower has
complied with the Assignment of Claims Act of 1940 (31 U.S.C. ss.203 et seq.) or
other applicable similar state or local law in a manner  satisfactory to Lender;


                                       B-3

<PAGE>

(xi) it is at all times  subject to  Lender's  duly  perfected,  first  priority
security  interest  and to no other Lien that is not a Permitted  Lien,  and the
goods giving rise to such Account (A) were not, at the time of sale,  subject to
any Lien except  Permitted  Liens and (B) have been delivered to and accepted by
the  Account  Debtor,  or the  services  giving rise to such  Account  have been
performed by Borrower and accepted by the Account  Debtor;  (xii) the Account is
not  evidenced by Chattel  Paper or an  Instrument  of any kind and has not been
reduced to judgment;  (xiii) the Account Debtor's total indebtedness to Borrower
does not exceed the amount of any credit limit established by Borrower or Lender
and the  Account  Debtor  is  otherwise  deemed  to be  creditworthy  by  Lender
(provided, that Accounts deemed to be ineligible solely by reason of this clause
(xiii) shall be  considered  Eligible  Accounts to the extent the amount of such
Accounts  does not exceed the lower of such credit  limits);  (xiv) there are no
facts or  circumstances  existing,  or which could  reasonably be anticipated to
occur,  which  might  result  in any  adverse  change  in the  Account  Debtor's
financial  condition or impair or delay the collectibility of all or any portion
of such  Account;  (xv) Lender has been  furnished  with all documents and other
information  pertaining  to such Account  which Lender has  requested,  or which
Borrower is  obligated  to deliver to Lender,  pursuant to this  Agreement;  and
(xvi)  Borrower has not made an agreement  with the Account Debtor to extend the
time of payment thereof beyond the time periods set forth in clause (ii) above.

         "Eligible  Equipment"  means, at any time of  determination,  Equipment
owned by Borrower which Lender, in its sole discretion, deems to be eligible for
borrowing purposes.

         "Eligible  Inventory"  means, at any time of  determination,  Inventory
(other than  packaging  materials  and  supplies)  which  satisfies  the general
criteria set forth below and which is otherwise  acceptable to Lender (provided,
that  Lender  may,  in its sole  discretion,  change the  general  criteria  for
acceptability  of  Eligible  Inventory  upon at least  fifteen  (15) days' prior
written  notice to  Borrower).  Inventory  shall be  deemed to meet the  current
general  criteria if (i) it consists of finished goods;  (ii) it is in good, new
and saleable condition; (iii) it is not slow-moving,  obsolete,  unmerchantable,
returned due to defects or  repossessed;  (iv) it is not in the  possession of a
processor,  consignee or bailee,  or located on premises  leased or subleased to
Borrower,  or  subject  to a mortgage  in favor of a Person  other than  Lender,
unless such processor, consignee, bailee or mortgagee or the lessor or sublessor
of  such  premises,  as  the  case  may  be,  has  executed  and  delivered  all
documentation  which Lender shall require to evidence the subordination or other
limitation  or  extinguishment  of such  Person's  rights  with  respect to such
Inventory and Lender's right to gain access thereto;  (v) it meets all standards
imposed  by  any  governmental  agency  or  authority,  and  if  required  to be
registered with the Federal Aviation Administration,  it has been so registered;
(vi)  it  conforms   in  all   respects  to  any   covenants,   warranties   and
representations set forth in the Agreement;  (vii) it is at all times subject to
Lender's duly  perfected,  first  priority  security  interest and no other Lien
except a Permitted Lien; (viii) it has not been consigned to Borrower;  and (ix)


                                       B-4
<PAGE>

it is situated at an Inventory  Location listed in Section 9(d) of Schedule A or
other location of which Lender has been notified as required by Section 5.6.

         "Eligible MDC Inventory" means, at any time of determination,  Eligible
Inventory consisting of MDC Inventory.

         "Eligible  Ordinary  Inventory"  means,  at any time of  determination,
Eligible Inventory consisting of Ordinary Inventory.

         "Equipment"  means all Goods which are used or bought for use primarily
in  business  (including  farming  or a  profession)  or by a  Person  who  is a
non-profit organization or governmental  subdivision or agency and which are not
Inventory,  farm products or consumer  goods,  including all  machinery,  molds,
machine  tools,  motors,  furniture,  equipment,  furnishings,  fixtures,  trade
fixtures,  motor vehicles,  tools,  parts,  dies and jigs, and all  attachments,
accessories, accessions, replacements,  substitutions, additions or improvements
to, or spare parts for, any of the foregoing.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974 and
all rules, regulations and orders promulgated thereunder.

         "Event of Default" has the meaning set forth in Section 8.1.

         "GAAP" means generally accepted accounting principles as in effect from
time to time, consistently applied.

         "General  Intangibles"  has the  meaning  set  forth  in the  UCC,  and
includes all books and records  pertaining to the  Collateral and other business
and  financial  records  in the  possession  of  Borrower  or any other  Person,
inventions,   designs,  drawings,  blueprints,   patents,  patent  applications,
trademarks,  trademark  applications  (other than  "intent to use"  applications
until a verified  statement of use is filed with  respect to such  applications)
and the goodwill of the business symbolized  thereby,  names, trade names, trade
secrets, goodwill, copyrights,  registrations,  licenses,  franchises,  customer
lists,  security  and other  deposits,  causes of action and other rights in all
litigation  presently  or hereafter  pending for any cause or claim  (whether in
contract,  tort  or  otherwise),  and all  judgments  now or  hereafter  arising
therefrom,  rights to purchase or sell real or  personal  property,  rights as a
licensor  or  licensee  of any  kind,  royalties,  telephone  numbers,  internet
addresses, proprietary information,  purchase orders, and all insurance policies
and claims  (including  life  insurance,  key man insurance,  credit  insurance,
liability  insurance,  property insurance and other insurance),  tax refunds and
claims,  letters  of  credit,  banker's  acceptances  and  guaranties,  computer
programs, discs, tapes and tape files in the possession of Borrower or any other
Person, claims under guaranties, security interests or other security held by or
granted to  Borrower,  all rights to  indemnification  and all other  intangible
property of every kind and nature.


                                       B-5

<PAGE>

         "Goods"  means all things  which are  movable at the time the  security
interest   attaches  or  which  are  fixtures  (other  than  money,   Documents,
Instruments,  Investment Property, Accounts, Chattel Paper, General Intangibles,
or minerals or the like  (including oil and gas) before  extraction),  including
standing  timber which is to be cut and removed  under a conveyance  or contract
for sale, the unborn young of animals, and growing crops.

         "Initial Term" has the meaning set forth in Section 7.1.

         "Instrument" has the meaning set forth in the UCC.

         "Inventory"  means all Goods held for sale or lease or  furnished or to
be furnished  under contracts of service,  including all raw materials,  work in
process,  finished goods,  goods in transit and materials and supplies which are
or  might be used or  consumed  in a  business  or used in  connection  with the
manufacture, packing, shipping, advertising, selling or finishing of such Goods,
and all  products  of the  foregoing,  and  shall  include  interests  in  goods
represented by Accounts,  returned, reclaimed or repossessed goods and rights as
an unpaid vendor.

         "Investment Property" shall mean all of Borrower's securities,  whether
certificated or uncertificated,  securities  entitlements,  securities accounts,
commodity contracts and commodity accounts.

         "Lender" has the meaning set forth in the heading to the Agreement.

         "Lien" means any interest in property  securing an obligation  owed to,
or a claim by, a Person  other  than the  owner of the  property,  whether  such
interest  is based on common  law,  statute  or  contract,  including  rights of
sellers under  conditional  sales  contracts or title  retention  agreements and
reservations,  exceptions, encroachments,  easements, rights-of-way,  covenants,
conditions,  restrictions,  leases and other title  exceptions and  encumbrances
affecting property. For the purpose of this Agreement,  Borrower shall be deemed
to be the owner of any  property  which it has  acquired  or holds  subject to a
conditional sale agreement or other  arrangement  pursuant to which title to the
property  has been  retained  by or vested in some  other  Person  for  security
purposes.

         "Loan Account" has the meaning set forth in Section 2.4.

         "Loan  Documents"  means  the  Agreement  and  all  notes,   guaranties
(including  without  limitation  the Borrower  Guaranty),  security  agreements,
certificates, landlord's agreements, Lock Box and Blocked Account agreements and
all other  agreements,  documents and instruments  now or hereafter  executed or
delivered  by Borrower or any Obligor in  connection  with,  or to evidence  the
transactions contemplated by, this Agreement.


                                       B-6

<PAGE>

         "Loan Limits"  means,  collectively,  the  Availability  limits and all
other limits on the amount of Loans and Credit  Accommodations set forth in this
Agreement.

         "Loans" means, collectively, the Revolving Loans and any Term Loan.

         "Lock Box" has the meaning set forth in Section 4.1.

         "Maturity Date" has the meaning set forth in Section 7.1.

         "MDC  Inventory"  means Inventory of spare parts purchased from Douglas
Aircraft  Corporation  prior to the date hereof pursuant to contract numbers DAC
88-28-D, DAC 91-03-P and DAC 91-04-P.

         "Obligations"  means all present  and future  Loans,  advances,  debts,
liabilities,  obligations, guaranties (including without limitation the Borrower
Guaranty),  covenants,  duties and indebtedness at any time owing by Borrower to
Lender,  whether  evidenced by this Agreement or any note or other instrument or
document,  whether  arising  from an  extension  of credit,  opening of a Credit
Accommodation, guaranty, indemnification or otherwise (including all fees, costs
and other amounts which may be owing to issuers of Credit Accommodations and all
taxes, duties, freight,  insurance,  costs and other expenses,  costs or amounts
payable in  connection  with Credit  Accommodations  or the  underlying  goods),
whether  direct or indirect  (including  those  acquired by  assignment  and any
participation  by Lender in Borrower's  indebtedness  owing to others),  whether
absolute or contingent, whether due or to become due, and whether arising before
or after the  commencement  of a  proceeding  under the  Bankruptcy  Code or any
similar statute,  including all interest,  charges,  expenses,  fees, attorney's
fees,  expert witness fees, audit fees,  letter of credit fees, loan fees, Early
Termination  Fees,  minimum  borrowing  fees and any other  sums  chargeable  to
Borrower under this Agreement or under any other Loan Document.

         "Obligor"  means any  guarantor,  endorser,  acceptor,  surety or other
person liable on, or with respect to, the Obligations or who is the owner of any
property which is security for the Obligations, other than Borrower.

         "Ordinary Inventory" means Inventory other than MDC Inventory.

         "Permitted  Liens"  means:  (i) purchase  money  security  interests in
specific  items of Equipment in an aggregate  amount not to exceed the limit set
forth in Section 8(d) of Schedule A; (ii) leases of specific  items of Equipment
in an  aggregate  amount not to exceed  the limit set forth in  Section  8(e) of
Schedule A; (iii) Liens for taxes not yet due and payable; (iv) additional Liens
which  are  fully  subordinate  to the  security  interests  of  Lender  and are
consented  to in writing by Lender;  (v)  security  interests  being  terminated
concurrently  with the execution of this  Agreement;  (vi) Liens of materialmen,
mechanics,  warehousemen or carriers  arising in the ordinary course of business


                                       B-7

<PAGE>

and  securing  obligations  which are not  delinquent;  (vii) Liens  incurred in
connection  with the  extension,  renewal  or  refinancing  of the  indebtedness
secured by Liens of the type  described  in clause (i) or (ii) above;  provided,
that any  extension,  renewal or  replacement  Lien is  limited to the  property
encumbered  by the existing Lien and the  principal  amount of the  indebtedness
being extended,  renewed or refinanced does not increase;  (viii) Liens in favor
of customs and revenue  authorities  which secure  payment of customs  duties in
connection  with the  importation  of  goods;  and  (ix)  Liens in favor of City
National  Bank  pursuant to the Deed of Trust dated October 31, 1991 in favor of
Ventura County  National Bank with respect to the real estate located at 341 "A"
Street, Fillmore,  California 93015. Lender will have the right to require, as a
condition  to its  consent  under  clause  (iv)  above,  that the  holder of the
additional  Lien  sign  an   intercreditor   agreement  in  form  and  substance
satisfactory to Lender, in its sole discretion,  acknowledging  that the Lien is
subordinate  to the security  interests of Lender,  and agreeing not to take any
action  to  enforce  its  subordinate  Lien so long  as any  Obligations  remain
outstanding,  and that Borrower agree that any uncured default in any obligation
secured by the subordinate  Lien shall also constitute an Event of Default under
this Agreement.

         "Person" means any individual, sole proprietorship,  partnership, joint
venture,   limited  liability  company,  trust,   unincorporated   organization,
association,  corporation,  government  or  any  agency  or  political  division
thereof, or any other entity.

         "Prime Rate" means,  at any given time, the prime rate as quoted in The
Wall Street  Journal as the base rate on corporate  loans posted as of such time
by at least 75% of the nation's 30 largest banks (which rate is not  necessarily
the lowest rate offered by such banks).

         "Real Property"  means the  real property  described in  Section  10 of
 Schedule A.

         "Released Parties" has the meaning set forth in Section 6.1.

         "Renewal Term" has the meaning set forth in Section 7.1.

         "Reserves" has the meaning set forth in Section 1.2.

         "Revolving Loans" has the meaning set forth in Section 1.1(b).

         "Sale" has the meaning set forth in Section 8.2.

         "Spares" has the meaning set forth in Section 5.18.

         "Subsidiary"  means any  corporation  or other entity of which a Person
owns, directly or indirectly, through one or more intermediaries,  more than 50%
of the capital stock or other equity interest at the time of determination.

                                       B-8

<PAGE>

         "Term" means the period  commencing  on the date of this  Agreement and
ending on the Maturity Date.

         "Term Loan" has the meaning set forth in Section 1.1(b).

         "UCC" means, at any given time, the Uniform  Commercial Code as adopted
and in effect at such time in the State of New York. All  accounting  terms used
in this Agreement,  unless otherwise indicated, shall have the meanings given to
such terms in accordance with GAAP. All other terms contained in this Agreement,
unless otherwise indicated,  shall have the meanings provided by the UCC, to the
extent such terms are defined therein.  The term  "including,"  whenever used in
this Agreement,  shall mean "including but not limited to." The singular form of
any term shall  include the plural  form,  and vice  versa,  when the context so
requires. References to Sections,  subsections and Schedules are to Sections and
subsections of, and Schedules to, this  Agreement.  All references to agreements
and statutes shall include all amendments  thereto and successor statutes in the
case of statutes.

                                       B-9

<PAGE>

         IN WITNESS WHEREOF,  Borrower and Lender have signed this Schedule B as
of the date set forth in the heading to the Agreement.

Borrower:                                    Lender:

FIELDS AIRCRAFT SPARES                       NATIONSCREDIT COMMERCIAL
INCORPORATED                                 CORPORATION, THROUGH ITS
                                             NATIONSCREDIT COMMERCIAL FUNDING
                                             DIVISION
By__________________________________
Its_________________________________         By________________________________
                                                   Its Authorized Signatory


                                      B-10