_________________________________________________________________

THIS LEASE AGREEMENT HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.
TO THE EXTENT, IF ANY, THAT THIS LEASE AGREEMENT CONSTITUTES
CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL
CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE AGREEMENT MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL
EXECUTED COUNTERPART CONTAINING THE RECEIPT EXECUTED BY LESSOR
OR, IF LESSOR HAS ASSIGNED ITS RIGHTS TO A THIRD PARTY IN
ACCORDANCE WITH THIS LEASE AGREEMENT, SUCH
    THIRD PARTY ON THE SIGNATURE PAGE OF THIS LEASE AGREEMENT.
________________________________________________________________


                     DATED:  August __, 1999


                       AIRCRAFT 22120, INC.

                             (Lessor)

                             - and -

                     VANGUARD AIRLINES, INC.

                             (Lessee)

               ___________________________________

                      LEASE AGREEMENT 22120
                         - relating to -
                     Boeing 737-230 Aircraft
                  Manufacturers Serial No: 22120
                  U.S. Registration Mark N122NJ
              _____________________________________




               FELTMAN, KARESH, MAJOR & FARBMAN,
                 Limited Liability Partnership
                      Carnegie Hall Tower
                      152 West 57th Street
                    New York, New York 10019
<PAGE>
                        TABLE OF CONTENTS


CLAUSE                                                            PAGE


1.  DEFINITIONS and INTERPRETATION . . . . . . . . . . . . . . . .  1
    1.1   Definitions. . . . . . . . . . . . . . . . . . . . . . .  1
    1.2   Interpretation . . . . . . . . . . . . . . . . . . . . . 19

2.  REPRESENTATIONS and WARRANTIES . . . . . . . . . . . . . . . . 19
    2.1   Lessee's Representations and Warranties  . . . . . . . . 19
    2.2   Lessee's Further Representations and Warranties  . . . . 21
    2.3   Repetition . . . . . . . . . . . . . . . . . . . . . . . 22
    2.4   Lessor's Representations and Warranties. . . . . . . . . 22
    2.5   Repetition . . . . . . . . . . . . . . . . . . . . . . . 23

3.  CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 24
    3.1   Lessor's Documentary Conditions Precedent. . . . . . . . 24
    3.2   Lessor's Other Conditions Precedent. . . . . . . . . . . 25
    3.3   Lessor's Waiver. . . . . . . . . . . . . . . . . . . . . 25
    3.4   Lessee's Conditions Precedent. . . . . . . . . . . . . . 25
    3.5   Lessee's Waiver. . . . . . . . . . . . . . . . . . . . . 26

4.  COMMENCEMENT. . . . . . . . . . . . . . . . . . . . . . . . . .27
    4.1   Leasing . . . . . . . . . . . . . . . . . . . . . . . . .27
    4.2   Delivery. . . . . . . . . . . . . . . . . . . . . . . . .27
    4.3   Delayed Delivery  . . . . . . . . . . . . . . . . . . . .29
    4.4   Acceptance and Risk. . . . .30

5.  PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
    5.1   Security Deposit; Letter of Credit  . . . . . . . . . . .30
    5.2   Rental Periods  . . . . . . . . . . . . . . . . . . . . .32
    5.3   Basic Rent  . . . . . . . . . . . . . . . . . . . . . . .32
    5.4   Additional Rent . . . . . . . . . . . . . . . . . . . . .33
    5.5   Lessor's Moneys . . . . . . . . . . . . . . . . . . . . .34
    5.6   Payments  . . . . . . . . . . . . . . . . . . . . . . . .34
    5.7   Gross-up  . . . . . . . . . . . . . . . . . . . . . . . .35
    5.8   Taxation  . . . . . . . . . . . . . . . . . . . . . . . .36
    5.9   Information . . . . . . . . . . . . . . . . . . . . . . .36
    5.10  Taxation of Indemnity Payments  . . . . . . . . . . . . .37
    5.11  Default Interest  . . . . . . . . . . . . . . . . . . . .37
    5.12  Contest . . . . . . . . . . . . . . . . . . . . . . . . .38
    5.13  Absolute  . . . . . . . . . . . . . . . . . . . . . . . .39
<PAGE>
6.  MANUFACTURER'S WARRANTIES . . . . . . . . . . . . . . . . . . .40
    6.1   Assignment  . . . . . . . . . . . . . . . . . . . . . . .40
    6.2   Proceeds  . . . . . . . . . . . . . . . . . . . . . . . .40
    6.3   Parts . . . . . . . . . . . . . . . . . . . . . . . . . .41
    6.4   Agreement . . . . . . . . . . . . . . . . . . . . . . . .41

7.  LESSOR'S COVENANTS and DISCLAIMERS. . . . . . . . . . . . . . .42
    7.1   Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . .42
    7.2   Lessor's Maintenance Contribution . . . . . . . . . . . .42
    7.3   Intentionally Omitted . . . . . . . . . . . . . . . . . .45
    7.4   Lessor's AD Cost Sharing Contribution . . . . . . . . . .45
    7.5   Registration and Filings  . . . . . . . . . . . . . . . .46
    7.6   Agreed Maintenance Performers . . . . . . . . . . . . . .46
    7.7   Exclusion . . . . . . . . . . . . . . . . . . . . . . . .46
    7.8   Lessee's Waiver . . . . . . . . . . . . . . . . . . . . .47
    7.9   Lessee's Confirmation . . . . . . . . . . . . . . . . . .47

8.  LESSEE'S COVENANTS. . . . . . . . . . . . . . . . . . . . . . .47
    8.1   Duration. . . . . . . . . . . . . . . . . . . . . . . . .47
    8.2   Information . . . . . . . . . . . . . . . . . . . . . . .48
    8.3   Lawful and Safe Operation . . . . . . . . . . . . . . . .50
    8.4   Taxes and Other Charges . . . . . . . . . . . . . . . . .52
    8.5   Sub-Leasing . . . . . . . . . . . . . . . . . . . . . . .52
    8.6   Inspection  . . . . . . . . . . . . . . . . . . . . . . .54
    8.7   Protection of Title . . . . . . . . . . . . . . . . . . .55
    8.8   General . . . . . . . . . . . . . . . . . . . . . . . . .56
    8.9   Records . . . . . . . . . . . . . . . . . . . . . . . . .57
    8.10  Registration and Filings  . . . . . . . . . . . . . . . .57
    8.11  Maintenance and Repair. . . . . . . . . . . . . . . . . .58
    8.12  Removal of Engines and Parts. . . . . . . . . . . . . . .59
    8.13  Installation of Engines and Parts . . . . . . . . . . . .60
    8.14  Non-Installed Engines and Parts . . . . . . . . . . . . .62
    8.15  Pooling of Engines and Parts  . . . . . . . . . . . . . .63
    8.16  Equipment Changes . . . . . . . . . . . . . . . . . . . .63
    8.17  Title to Engines and Parts. . . . . . . . . . . . . . . .64
    8.18  Third Parties . . . . . . . . . . . . . . . . . . . . . .65
    8.19  Non-Discrimination. . . . . . . . . . . . . . . . . . . .65

9.  INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . .65
    9.1   Insurances  . . . . . . . . . . . . . . . . . . . . . . .65
    9.2   Requirements  . . . . . . . . . . . . . . . . . . . . . .66
    9.3   Insurance Covenants . . . . . . . . . . . . . . . . . . .66
    9.4   Failure to Insure . . . . . . . . . . . . . . . . . . . .68
<PAGE>
    9.5   Continuing Indemnity. . . . . . . . . . . . . . . . . . .68
    9.6   Application of Insurance Proceeds . . . . . . . . . . . .69

10. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . .70
    10.1  General . . . . . . . . . . . . . . . . . . . . . . . . .70
    10.2  Mitigation  . . . . . . . . . . . . . . . . . . . . . . .71
    10.3  Duration  . . . . . . . . . . . . . . . . . . . . . . . .72

11. EVENTS OF LOSS. . . . . . . . . . . . . . . . . . . . . . . . .72
    11.1  Total Loss. . . . . . . . . . . . . . . . . . . . . . . .72
    11.2  Engine Loss . . . . . . . . . . . . . . . . . . . . . . .73
    11.3  Requisition . . . . . . . . . . . . . . . . . . . . . . .74

12. RETURN OF AIRCRAFT. . . . . . . . . . . . . . . . . . . . . . .75
    12.1  Redelivery  . . . . . . . . . . . . . . . . . . . . . . .75
    12.2  Final Checks. . . . . . . . . . . . . . . . . . . . . . .75
    12.3  Final Inspection  . . . . . . . . . . . . . . . . . . . .76
    12.4  Non-Compliance. . . . . . . . . . . . . . . . . . . . . .77
    12.5  Export Documentation  . . . . . . . . . . . . . . . . . .77
    12.6  Acknowledgment  . . . . . . . . . . . . . . . . . . . . .77
    12.7  Maintenance Program . . . . . . . . . . . . . . . . . . .78
    12.8  Storage . . . . . . . . . . . . . . . . . . . . . . . . .78

13. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
    13.1  Events  . . . . . . . . . . . . . . . . . . . . . . . . .78
    13.2  Rights. . . . . . . . . . . . . . . . . . . . . . . . . .83
    13.3  Export. . . . . . . . . . . . . . . . . . . . . . . . . .83
    13.4  Default Payments  . . . . . . . . . . . . . . . . . . . .84
    13.5  Waiver of Certain Article 2A Rights . . . . . . . . . . .85

14. ASSIGNMENT and TRANSFER . . . . . . . . . . . . . . . . . . . .85
    14.1  No Assignment by Lessee . . . . . . . . . . . . . . . . .85
    14.2  Lessor Assignment . . . . . . . . . . . . . . . . . . . .85
    14.3  Grants of Security Interests  . . . . . . . . . . . . . .88
    14.4  Sale and Leaseback by Lessor  . . . . . . . . . . . . . .90
    14.5  Further Acknowledgments . . . . . . . . . . . . . . . . .90
    14.6  Certain Protections for Lessee's Benefit  . . . . . . . .90

15. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .91
    15.1  Waivers, Remedies Cumulative  . . . . . . . . . . . . . .91
    15.2  Delegation  . . . . . . . . . . . . . . . . . . . . . . .91
    15.3  Appropriation . . . . . . . . . . . . . . . . . . . . . .91
    15.4  Currency Indemnity. . . . . . . . . . . . . . . . . . . .91
    15.5  Payment by the Lessor . . . . . . . . . . . . . . . . . .92
<PAGE>
    15.6  Severability. . . . . . . . . . . . . . . . . . . . . . .92
    15.7  Remedy. . . . . . . . . . . . . . . . . . . . . . . . . .92
    15.8  Expenses. . . . . . . . . . . . . . . . . . . . . . . . .92
    15.9  Time of Essence . . . . . . . . . . . . . . . . . . . . .93
    15.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . .93
    15.11 Law and Jurisdiction. . . . . . . . . . . . . . . . . . .94
    15.12 Sole and Entire Agreement . . . . . . . . . . . . . . . .95
    15.13 Indemnities . . . . . . . . . . . . . . . . . . . . . . .95
    15.14 Counterparts  . . . . . . . . . . . . . . . . . . . . . .95
    15.15 Confidentiality . . . . . . . . . . . . . . . . . . . . .95
<PAGE>
                        TABLE OF CONTENTS


CLAUSE                                                            PAGE

SCHEDULES

1.  Basic Rent and Other Terms. . . . . . . . . . . . . . . . . . .97
2.  Aircraft Specification. . . . . . . . . . . . . . . . . . . . .99
3.  Operating Condition at Delivery . . . . . . . . . . . . . . . 106
4.  Operating Condition at Redelivery . . . . . . . . . . . . . . 111
5.  Insurance Requirements  . . . . . . . . . . . . . . . . . . . 116

EXHIBITS

A.  Form of Certificate of Acceptance . . . . . . . . . . . . . . 121
B.  Form of Certificate of Delivery Condition . . . . . . . . . . 123
C.  Form of Consent . . . . . . . . . . . . . . . . . . . . . . . 127
D.  Form of Legal Opinion . . . . . . . . . . . . . . . . . . . . 128
E.  Form of Letter of Credit. . . . . . . . . . . . . . . . . . . 129
F.  Form of Monthly Status Report . . . . . . . . . . . . . . . . 130
G.  Form of Certificate of Redelivery . . . . . . . . . . . . . . 133
<PAGE>
THIS LEASE AGREEMENT 22120 is made the____ day of August, 1999

BETWEEN:

(1)      AIRCRAFT 22120, INC., a Delaware corporation having its
         principal place of business at c/o Unicapital Air Group,
         Inc., 1900 Summit Tower Blvd., Suite 860, Orlando, Florida
         32810 (the "LESSOR"), and

(2)      VANGUARD AIRLINES, INC., a company organized and existing
         under the laws of the State of Delaware having its principal
         place of business at 533 Mexico City Avenue, Kansas City
         International Airport, Kansas City, Missouri 64153 (the
         "LESSEE").

WHEREAS:

(A)      Pursuant to a Sale Agreement, dated as of December 23, 1997,
         between the Previous Operator, as seller, and NSJ
         Corporation of Florida, Inc., as buyer ("NSJ-Florida"), as
         assigned by the Previous Operator to the Previous Owner and
         by NSJ-Florida to Lessor pursuant to the Assignment,
         Assumption and Consent Agreement, dated as of July 16, 1999,
         Lessor has agreed to purchase the Leased Property from the
         Previous Owner on or before the Delivery Date.

(B)      Lessor wishes to lease the Leased Property to the Lessee,
         and Lessee agrees to lease the Leased Property from the
         Lessor, with effect immediately from the purchase of the
         Aircraft upon and subject to the covenants, terms and
         conditions set out in this Agreement.

NOW IT IS HEREBY AGREED as follows:

1.       DEFINITIONS and INTERPRETATION

         1.1 DEFINITIONS

         In this Agreement the following expressions shall, unless
         the context otherwise requires, have the following
         respective meanings:

         ACTUAL COST         as it applies to any maintenance
                             work on the Aircraft, means the
                             actual cost of replacement parts
                             plus the cost of the associated
                             labor at Lessee's in-house labor
                             rates (if the work is performed by
                             Lessee) or at third party costs
                             charged to Lessee (if the work is
                             performed by third parties) and
                             shall in no event include late
                             charges, mark-ups, interest or
                             other similar amounts.
<PAGE>
         ADDITIONAL RENT     collectively, Airframe Additional
                             Rent, APU Additional Rent, Engine
                             Additional Rent and Landing Gear
                             Additional Rent.

         AFFILIATE           in relation to any Person, any
                             other Person controlled directly or
                             indirectly by that Person, any
                             other Person that controls directly
                             or indirectly that Person or any
                             other Person under common control
                             with that Person.  For this purpose
                             "control" of any Person means
                             ownership of a majority of the
                             voting power of such Person.

         AGREED MAINTENANCE
            PERFORMER        the Lessee or any other reputable
                             maintenance organization that is
                             (i) experienced in maintaining
                             aircraft and/or engines of the same
                             type as the Aircraft and the
                             Engines, (ii) duly certificated by
                             the FAA under FAR Part 145, and
                             (iii) not objected to by Lessor
                             pursuant to Clause 7.6.

         AGREED MAINTENANCE
            PROGRAM          the Lessee's current Maintenance
                             Program, which shall at all times
                             be in compliance with the
                             Manufacturer's MPD and the Engine
                             Manufacturer's MPD, as the same may
                             be amended from time to time in
                             accordance with this Agreement.

         AGREED VALUE        the amount set forth on Schedule 1.

         AIRCRAFT            the aircraft described in Part l of
                             Schedule 2 (which term includes,
                             where the context admits, a
                             separate reference to all Engines
                             and Parts).

         AIRCRAFT DOCUMENTS  the documents, data and records
                             identified in Part 2 of Schedule 2
                             and all additions, renewals,
                             revisions and replacements from
                             time to time made in accordance
                             with this Agreement.

         AIRFRAME            the Aircraft, excluding the Engines
                             and the Aircraft Documents.

         AIRFRAME ADDITIONAL
            RENT             as defined in Clause 5.4(a)(i).

         AIRFRAME ADDITIONAL
            RENT RATE        the amount set forth in Schedule 1.

         AIRFRAME REIMBURSABLE
            EXPENSES         as defined in Clause 7.2(a)(i).
<PAGE>
         APPLICABLE LAW      all applicable (i) laws, treaties
                             and international agreements of any
                             national government, (ii) laws of
                             any state, province, territory,
                             locality or other political
                             subdivision of a national
                             government, and (iii) rules,
                             regulations, judgments, decrees,
                             orders, injunctions, writs,
                             directives, licenses and permits of
                             any Government Entity or
                             arbitration authority.

         APPRAISAL PROCEDURE with respect to any amount to be
                             determined, the amount mutually
                             agreed by Lessor and Lessee or, if
                             Lessor and Lessee are unable to
                             agree upon any such amount to be
                             determined, the average of the
                             amounts determined by three
                             FAA-approved service centers in the
                             continental United States, one such
                             service center appointed by Lessor,
                             one by Lessee and one by their
                             appointed service centers, except
                             that if any party fails to appoint
                             a service center the Manufacturer
                             or the Engine Manufacturer
                             (whichever is appropriate) shall be
                             deemed appointed.

         APU                 (i) the auxiliary power unit listed
                             in Schedule 2, (ii) any and all
                             Parts, so long as such Parts are
                             incorporated in, installed on or
                             attached to such auxiliary power
                             unit or so long as title to such
                             Parts is vested in the Lessor in
                             accordance with the terms of Clause
                             8.17(b) after removal from such
                             auxiliary power unit, and
                             (iii) insofar as the same belong to
                             Lessor, all substitutions,
                             replacements or renewals from time
                             to time made in or to such
                             auxiliary power unit or to any of
                             the Parts referred to in clause
                             (ii) above, as required or
                             permitted under this Agreement.

         APU ADDITIONAL RENT as defined in Clause 5.4(a)(iv).

         APU ADDITIONAL RENT
            RATE             the amount set forth in Schedule 1.

         APU REIMBURSABLE
            EXPENSES         as defined in Clause 7.2(d)(i).

         ASSIGNMENT          the Assignment of Lease Agreement,
                             dated the Delivery Date, between
                             Lessor and Mortgagee, and any
                             present or future assignment by the
                             Lessor in <PAGE> favor of any Financing
                             Party of the Lessor's rights under
                             this Agreement as security for its
                             obligations to a Financing Party.

         AVIATION AUTHORITY  the FAA or, if the State of
                             Registration ceases to be the
                             United States of America, the
                             authority and/or Government Entity
                             and/or agency which, under the laws
                             of the State of Registration, from
                             time to time (i) has control or
                             supervision of civil aviation; or
                             (ii) has jurisdiction over
                             registration, airworthiness or
                             operation of the Aircraft.

         BASIC RENT          all amounts payable pursuant to
                             Clause 5.3.

         BASIC RENT AMOUNT   the amount set forth in Schedule 1.

         BUSINESS DAY        a day (other than a Saturday or
                             Sunday) on which business of the
                             nature required by this Agreement
                             is carried out in Orlando, Florida
                             and the city in which Lessee's
                             office listed in Clause 15.10(b) is
                             located or, where used in relation
                             to payments, on which banks are
                             open for business in New York, New
                             York.

         C-CHECK             a maintenance check on the Airframe
                             under the Agreed Maintenance
                             Program designated as a "C" check
                             and consisting of full and complete
                             zonal, systems and structural check
                             including the corresponding lower
                             checks ("A" and "B" or equivalent)
                             and any other maintenance and
                             inspections tasks that are a part
                             of such checks, all in accordance
                             with the Agreed Maintenance
                             Program, or if the Agreed
                             Maintenance Program changes and no
                             longer refers to a full and
                             complete zonal, systems and
                             structural block "C" check, then a
                             check consisting of those items of
                             maintenance characterized by the
                             MPD and best industry practice as a
                             "C" check (or its equivalent), but
                             in any event not including repairs
                             arising as the result of
                             operational or maintenance
                             mishandling or accidental damage.

         CER                 an engine refurbishment, including
                             with respect to any Engine the
                             complete visual inspection and <PAGE>
                             repair as necessary of required
                             modules of the Engine in an engine
                             repair/overhaul station, including
                             complete or partial disassembly,
                             complete or partial visual
                             inspection, de-blading of LLPs as
                             required, visual inspection of all
                             LLPs, verification that all snap
                             diameters on LLPs are within
                             limits, inspection of all blades
                             for proper chord dimensions and
                             cracking, repair or replacement of
                             all blades below minimums,
                             inspection and repair of stators as
                             necessary, blade-up of LLPs using
                             new lock plates, assembly of rotors
                             in the turbine, balance of all
                             rotors, and installation of rotors
                             in the Engine.

         CERTIFICATE OF
            ACCEPTANCE       a certificate in the form attached
                             as Exhibit A to be completed and
                             executed by Lessor and Lessee on
                             Delivery.

         CERTIFICATE OF
            DELIVERY CONDITION    a certificate in the form attached
                                  as Exhibit B to be completed and
                                  executed by Lessor and Lessee on
                                  Delivery.

         CERTIFICATE OF
            REDELIVERY       a certificate in the form attached
                             as Exhibit G to be completed and
                             executed by Lessor upon redelivery
                             of the Aircraft and Aircraft
                             Documents in accordance with this
                             Agreement.

         CONSENT             the Lessee's Acknowledgment of and
                             Consent to Assignment of Lease,
                             dated the Delivery Date, between
                             Lessor, Lessee and Mortgagee in the
                             form attached as Exhibit C pursuant
                             to which, inter alia, Lessee
                             consents to the Assignment and
                             Mortgagee covenants to preserve
                             Lessee's quiet enjoyment.

         COOPESA             The Self-Managed Cooperative of
                             Aero Industrial Services R.L.

         CPCP                Lessee's Corrosion Prevention and
                             Control Program under the Agreed
                             Maintenance Program.

         CREDIT AGREEMENT    the Secured Loan Agreement, dated
                             as of August___, 1999, between
                             Lender and Lessor.

         CYCLE               one take-off and landing of an
                             airframe.
<PAGE>
         DAMAGE NOTIFICATION
            THRESHOLD        the amount set forth in Schedule 1.

         DEFAULT             any Event of Default and any event
                             which with the giving of notice,
                             lapse of time or fulfilment of any
                             other condition or any combination
                             of the foregoing would constitute
                             an Event of Default.

         DEFAULT RATE        at any time and from time to time,
                             3.0% plus the prime or base
                             commercial lending rate as
                             announced (i) if the Mortgagee is a
                             bank or trust company, by the
                             Mortgagee at its principal banking
                             office in New York City, New York,
                             or (ii) if the Mortgagee is not a
                             bank or trust company, by Citibank,
                             N.A., in either case compounded
                             monthly and calculated on the basis
                             of the actual number of days
                             elapsed and on a 360 day year.

         DELIVERY            the delivery of the Aircraft to the
                             Lessee in accordance with the terms
                             of this Agreement.

         DELIVERY DATE       the date on which Delivery takes
                             place, which shall be the Scheduled
                             Delivery Date or such other date
                             notified by Lessor to Lessee in
                             accordance with the provisions of
                             this Agreement, including Clauses
                             4.2(e) and 4.3.

         DELIVERY LOCATION   Coopesa in San Jose, Costa Rica.

         DOLLARS AND $       the lawful currency of the United
                             States of America.

         ENGINE              whether or not installed on the
                             Aircraft:

                             (a)  each engine, including the
                                  Spare Engine, of the
                                  manufacture, model and serial
                                  number specified in Part 1 of
                                  Schedule 2 and having 750 or
                                  more rated take-off
                                  horsepower, title to which
                                  shall belong to the Lessor; or

                             (b)  any engine which replaces that
                                  engine, title to which passes
                                  to the Lessor in accordance
                                  with Clause 8.17(d);
<PAGE>
                             and in each case includes all
                             modules and Parts from time to time
                             belonging to, installed in or
                             appurtenant to that engine.

         ENGINE ADDITIONAL RENT   as defined in Clause 5.4(a)(ii).

         ENGINE ADDITIONAL RENT
            RATE             the amount set forth in Schedule 1.

         ENGINE LOSS         the occurrence, with respect to an
                             Engine, of one of the events set
                             forth in clauses (a) through (d) of
                             the definition of "Total Loss" as
                             if references to the "Airframe"
                             were to such "Engine".

         ENGINE LOSS DATE    the relevant date determined in
                             accordance with the definition of
                             "Total Loss Date" as if that
                             definition applied to an Engine
                             Loss.

         ENGINE MANUFACTURER the Pratt & Whitney Division of
                             United Technologies Corporation.

         ENGINE REIMBURSABLE
            EXPENSES         as defined in Clause 7.2(b)(i).

         ENGINE SHOP VISIT   a shop visit requiring disassembly
                             of an Engine (but excluding for
                             this purpose any removal,
                             installation, maintenance and
                             repair of "Quick Engine Change"
                             kits) and during which there shall
                             be performed a hot section
                             restoration or repair or a cold
                             section restoration or repair or a
                             replacement of LLPs.

         EQUIPMENT CHANGE    as defined in Clause 8.16(a).

         EVENT OF DEFAULT    an event specified in Clause 13.1.

         EXCUSABLE DELAY     with respect to delivery of the
                             Aircraft, delay or non-performance
                             due to or arising out of acts of
                             God or public enemy, civil war,
                             insurrection or riot, fire, flood,
                             explosion, earthquake, serious
                             accident, epidemic, quarantine
                             restriction, import restriction,
                             any act of government, governmental
                             priority, allocation, regulation or
                             order affecting directly or
                             indirectly, the Aircraft, any
                             manufacturer, Lessor or any
                             materials or facilities, strike or
                             labor dispute causing cessation,
                             slowdown or interruption of work,
                             inability after due and timely
                             diligence to <PAGE> procure equipment,
                             data or materials from
                             manufacturers, suppliers, any
                             existing owner, seller or lessee in
                             a timely manner, damage,
                             destruction or loss, adverse
                             weather conditions preventing any
                             services, inspections or flights of
                             the Aircraft or any other cause to
                             the extent that such cause is
                             beyond the control of Lessor,
                             whether above mentioned or not and
                             whether or not similar to the
                             foregoing.

         EXPIRY DATE         the Scheduled Expiry Date or any
                             other date on which:

                             (a)  the Aircraft has been
                                  redelivered in accordance with
                                  this Agreement and all
                                  obligations of Lessee have
                                  been satisfied; or

                             (b)  the Lessor receives the Agreed
                                  Value following a Total Loss
                                  and any other amounts then due
                                  and owing in accordance with
                                  this Agreement.

         FAA                 the Federal Aviation Administration
                             of the U.S. Department of
                             Transportation, or any successor
                             Government Entity succeeding to the
                             functions thereof.

         FARs                the Federal Aviation Regulations
                             for the time being in force, issued
                             by the FAA pursuant to the Federal
                             Aviation Law and published in Title
                             14 of the Code of Federal
                             Regulations.

         FEDERAL AVIATION LAW     Title 49 of the United States Code,
                                  as amended, or any successor
                                  statutory provisions and the
                                  regulations promulgated under such
                                  provisions.

         FINANCIAL INDEBTEDNESS   any indebtedness in respect of:

                             (a)  moneys borrowed;

                             (b)  any liability under any
                                  debenture, bond, note, loan
                                  stock, acceptance credit,
                                  documentary credit or other
                                  security;
<PAGE>
                             (c)  the acquisition cost of any
                                  asset to the extent payable
                                  before or after the time of
                                  acquisition or possession; or

                             (d)  the capitalized value
                                  (determined in accordance with
                                  accounting practices generally
                                  accepted in the United States
                                  of America) of obligations
                                  under finance leases; or

                             (e)  any guarantee, indemnity or
                                  similar assurance against
                                  financial loss of any Person
                                  in respect of the above.

         FINANCING PARTIES   collectively (i) Lender, (ii)
                             Mortgagee, (iii) any Additional
                             Mortgagee, (iv) any Person that
                             lends money to Lessor and for whom
                             an Additional Mortgagee holds a
                             Security Interest in the Leased
                             Property, and (v) the successors
                             and permitted assigns of such
                             Persons.

         FLIGHT HOUR         each hour or part thereof (rounded
                             up to one decimal place) elapsing
                             from the moment the wheels of the
                             Airframe leave the ground on take
                             off until the moment the wheels of
                             the Airframe next touch the ground.

         GAAP                generally accepted accounting
                             principles as in effect from time
                             to time and, subject to changes in
                             such principles from time to time,
                             consistently applied in accordance
                             with the past practices of a
                             Person.

         GOVERNMENT ENTITY   (a)  any national, state or local
                                  government, political
                                  subdivision thereof or local
                                  jurisdiction therein;

                             (b)  any board, commission,
                                  department, division,
                                  instrumentality, court, agency
                                  or political subdivision
                                  thereof; and

                             (c)  any association, organization
                                  or institution of which any of
                                  the above is a member or to
                                  whose jurisdiction any thereof
                                  is subject or <PAGE> in whose
                                  activities any of the above is
                                  a participant.

         HEAVY CHECK         the maintenance checks under the
                             Agreed Maintenance Program
                             designated as "Q1" and "Q2", or any
                             comparable major airframe overhaul
                             under any other or amended
                             maintenance program.

         IATA                the International Air Transport
                             Association.

         INDEMNITEES         Lessor, each of the Financing
                             Parties, the respective successors
                             and assigns of such Persons and the
                             shareholders, directors, officers,
                             agents and employees of such
                             Persons.

         INSURANCES          as defined in Clause 9.1.

         LANDING GEAR        the landing gear assembly of the
                             Aircraft excluding the wheels and
                             brake units.

         LANDING GEAR
            ADDITIONAL RENT  as defined in Clause 5.4(a)(iii).

         LANDING GEAR
            ADDITIONAL RENT  the amount set forth in Schedule 1.
            RATE

         LANDING GEAR
            REIMBURSABLE
            EXPENSES         as defined in Clause 7.2(c)(i).

         LEASED PROPERTY     the Aircraft and the Aircraft
                             Documents.

         LENDER              FINOVA Capital Corporation and its
                             successors and assigns as "Lender"
                             under the Credit Agreement.

         LESSEE INSTALLED PART    a Part installed on the Aircraft
                                  after Delivery not in replacement
                                  for any Part and not required under
                                  the FARs on the Aircraft, title to
                                  which is held by Lessee (and which
                                  may be subject to a Security
                                  Interest in favor of an unrelated
                                  third party) or title to which is
                                  held by an unrelated third party
                                  and such Part is leased or
                                  conditionally sold to Lessee.

         LESSOR LIEN         (a)  the Mortgage and any other
                                  Security Interest whatever
                                  from time to time created by
                                  or <PAGE> arising through the Lessor
                                  and/or any Financing Party in
                                  connection with the financing
                                  or refinancing of the
                                  Aircraft;

                             (b)  any other Security Interest in
                                  respect of the Aircraft that
                                  results from acts or omissions
                                  of, or claims against, the
                                  Lessor and/or any Financing
                                  Party not related to the
                                  operation of the Aircraft or
                                  the transactions contemplated
                                  by or permitted under this
                                  Agreement; and

                             (c)  liens in respect of the
                                  Aircraft for Non-Indemnified
                                  Taxes.

         LETTER OF CREDIT    an irrevocable standby letter of
                             credit, in the form set out in
                             Exhibit E or otherwise in form and
                             substance reasonably satisfactory
                             to Lessor, to be issued (at the
                             Lessee's option) in favor of Lessor
                             (or, if designated by Lessor, in
                             favor of Mortgagee) by a bank
                             reasonably acceptable to Lessor and
                             Mortgagee for the payment of the
                             Security Deposit.

         LLPs                life limited Parts.

         MAINTENANCE PROGRAM an Aviation Authority approved
                             maintenance program for the
                             Aircraft encompassing scheduled
                             maintenance, condition monitored
                             maintenance and/or on-condition
                             maintenance of Airframe, Engines
                             and Parts, including servicing,
                             testing, preventative maintenance,
                             repairs, structural inspections,
                             system checks, overhauls, approved
                             modifications, service bulletins,
                             engineering orders, airworthiness
                             directives, corrosion control,
                             inspections and treatments.

         MAJOR CHECKS        any Heavy Check, C-Check, "C"
                             check, multiple or phase "C" check,
                             "D" check or annual heavy
                             maintenance visit or segment
                             thereof suggested for commercial
                             aircraft of the same model as the
                             Aircraft by the Manufacturer
                             (however denominated in the Agreed
                             Maintenance Program).
<PAGE>
         MANUFACTURER        The Boeing Company, a Delaware
                             corporation with a place of
                             business in Seattle, Washington.
         MINIMUM LIABILITY
         COVERAGE            the amount set forth on Schedule 1.

         MORTGAGE            the First Priority Aircraft Chattel
                             Mortgage and Security Agreement,
                             dated the Delivery Date, between
                             Lessor, as debtor, and Mortgagee,
                             as secured party, whereby Lessor
                             has granted to Mortgagee a first
                             priority security interest in the
                             Aircraft and its right, title and
                             interest in the Operative
                             Documents.

         MORTGAGEE           FINOVA Capital Corporation and its
                             successors and assigns as mortgagee
                             under the Mortgage.

         MPD                 for any manufacturer, such
                             manufacturer's Maintenance Planning
                             Document.

         NON-INDEMNIFIED
            TAXES            (a)  Taxes imposed as a direct
                                  result of activities of any
                                  Tax Indemnitee in the
                                  jurisdictions imposing the
                                  liability unrelated to such
                                  Tax Indemnitee's dealings with
                                  Lessee pursuant to the
                                  Operative Documents or to the
                                  transactions contemplated by
                                  the Operative Documents or the
                                  operation of the Aircraft by
                                  Lessee;

                             (b)  Taxes on or measured by the
                                  income, profits, gains,
                                  capital or net worth
                                  (including minimum taxes,
                                  withholding taxes and taxes on
                                  or measured by any items of
                                  tax preference) and any doing
                                  business or franchise taxes,
                                  and interest, additions to
                                  tax, penalties or other
                                  charges in respect thereof,
                                  imposed on any Tax Indemnitee
                                  (i) by any Federal Government
                                  Entity in the United States of
                                  America, (ii) by any
                                  Government Entity in the
                                  jurisdictions where such Tax
                                  Indemnitee is incorporated,
                                  formed or organized or has its
                                  principal place of business,
                                  (iii) by any state or local
                                  Government Entity in the
                                  United States of America in
                                  which such Tax Indemnitee has
                                  a nexus as a result of
                                  activities other than <PAGE> those
                                  contemplated by the Operative
                                  Documents, or (iv) by any
                                  Government Entity in any other
                                  jurisdiction where such Tax
                                  Indemnitee is liable for such
                                  Taxes in the absence of the
                                  transactions contemplated by
                                  this Agreement;

                             (c)  Taxes imposed with respect to
                                  any period ending or event
                                  occurring before the date of
                                  this Agreement or any period
                                  commencing or event occurring
                                  after the Expiry Date;

                             (d)  Taxes imposed as a direct
                                  result of the sale, financing
                                  or other disposition or
                                  assignment of the Aircraft, or
                                  any interest in any trust or
                                  other entity that holds a
                                  direct or indirect interest in
                                  the Aircraft, unless such sale
                                  or disposition occurs as a
                                  consequence of an Event of
                                  Default;

                             (e)  Taxes imposed by a taxing
                                  jurisdiction for a particular
                                  tax period in which none of
                                  the following is true for that
                                  tax period:  (i) the
                                  operation, registration,
                                  location, presence or use of
                                  the Aircraft, the Airframe,
                                  any Engine or any Part
                                  thereof in such jurisdiction,
                                  (ii) the place of
                                  incorporation, commercial
                                  domicile or other presence in
                                  such jurisdiction of the
                                  Lessee, any sublessee or any
                                  user of or Person in
                                  possession of the Aircraft,
                                  the Airframe, any Engine or
                                  any Part thereof in such
                                  jurisdiction, or (iii) any
                                  payments made under this
                                  Agreement and related
                                  documents being made from such
                                  jurisdiction;

                             (f)  Taxes to the extent caused by
                                  the gross negligence or
                                  willful misconduct of any Tax
                                  Indemnitee or the breach by
                                  any Tax Indemnitee of any of
                                  their obligations under the
                                  Operative Documents;

                             (g)  Taxes to the extent caused by
                                  a failure by any Tax
                                  Indemnitee to furnish in a
                                  timely <PAGE> manner notice or
                                  information which it is
                                  required to furnish to Lessee
                                  by the terms of this
                                  Agreement;

                             (h)  any Taxes imposed on or with
                                  respect to a transferee or
                                  assignee of the Aircraft or
                                  any interest therein to the
                                  extent that, under Applicable
                                  Law in effect at the time of
                                  the transfer or assignment,
                                  such Taxes would not have been
                                  imposed on or with respect to
                                  the transferor or assignor;
                                  and

                             (i)  any Taxes resulting from or
                                  attributable to a Lessor Lien.

         OPERATIVE DOCUMENTS this Agreement, the Certificate of
                             Acceptance, the Certificate of
                             Delivery Condition and the Consent.

         PART                whether or not installed on the
                             Aircraft:

                             (a)  any component, furnishing or
                                  equipment (other than a
                                  complete Engine) furnished
                                  with, installed on or
                                  appurtenant to the Airframe
                                  and Engines on Delivery; and

                             (b)  any other component,
                                  furnishing or equipment (other
                                  than a complete Engine) title
                                  to which has, or should have,
                                  passed to the Lessor pursuant
                                  to the Sale Agreement or
                                  Clause_8.17(b),

                             but excludes any such items title
                             to which has, or should have,
                             passed to Lessee pursuant to
                             Clause_8.17(c) and any Lessee
                             Installed Part.

         PERMITTED LIEN      (a)  any lien for Taxes not
                                  assessed or, if assessed, not
                                  yet due and payable, or being
                                  contested in good faith by
                                  appropriate proceedings;

                             (b)  any lien of a repairer,
                                  mechanic, carrier, hangar
                                  keeper, unpaid seller or other
                                  similar lien arising in the
                                  ordinary course of business or
                                  by operation of law in respect
                                  of obligations which are not
                                  overdue in <PAGE> accordance with
                                  Applicable Law (or, if
                                  applicable, generally accepted
                                  accounting principles and
                                  practices in the relevant
                                  jurisdiction) or are being
                                  contested in good faith by
                                  appropriate proceedings; and

                             (c)  any Lessor Lien;

                             but only if, in the case of (a) and
                             (b):  (i) adequate reserves have
                             been provided by Lessee for the
                             payment of the Taxes or obligations
                             in accordance with generally
                             accounting principles and practices
                             in the relevant jurisdiction; and
                             (ii) such proceedings, or the
                             continued existence of the lien, do
                             not give rise to any reasonable
                             likelihood of the sale, forfeiture
                             or other loss of the Aircraft or
                             any interest therein or of criminal
                             liability on the Lessor or any
                             Financing Party.

         PERSON              any individual, corporation,
                             partnership, limited liability
                             company, limited liability
                             partnership, joint venture,
                             association, joint stock company,
                             trust, unincorporated organization
                             or Government Entity.

         PREVIOUS OPERATOR   Deutsche Lufthansa
                             Aktiengesellschaft.

         PREVIOUS OWNER      First Security Bank, National
                             Association, as trustee f/b/o the
                             Previous Operator

         REDELIVERY LOCATION Kansas City International Airport
                             or any other location agreed by
                             Lessor and Lessee.

         REIMBURSABLE
            EXPENSES         collectively, Airframe Reimbursable
                             Expenses, APU Reimbursable
                             Expenses, Engine Reimbursable
                             Expenses and Landing Gear
                             Reimbursable Expenses.

         RENT                collectively, all Basic Rent,
                             Additional Rent and Supplemental
                             Rent.

         RENTAL PERIOD       each period ascertained in
                             accordance with Clause 5.2.
<PAGE>
         RENT DATE           the Delivery Date and the
                             corresponding day of each calendar
                             month during the Term or, for any
                             calendar month that does not have a
                             corresponding day, the last day of
                             such calendar month.

         SCHEDULED DELIVERY
            DATE             August ___, 1999.

         SPARE ENGINE        the Engine bearing manufacturer's
                             serial number 702999.

         SCHEDULED EXPIRY
            DATE             the fifth anniversary of the
                             Delivery Date.

         SECURITY DEPOSIT    the amount set forth on Schedule 1.

         SECURITY INTEREST   any mortgage, charge, pledge, lien,
                             assignment, hypothecation, right of
                             set-off, or any agreement or
                             arrangement having the effect of
                             creating a security interest.

         SPECIAL FAA COUNSEL McAfee & Taft of Oklahoma City,
                             Oklahoma.

         SRM                 the Manufacturer's structural
                             repair manual.

         STATE OF
            INCORPORATION    State of Delaware.

         STATE OF
            REGISTRATION     United States of America.

         SUBSIDIARY          (a)  in relation to any reference
                                  to accounts, any company
                                  wholly or partially owned by
                                  Lessee whose accounts are
                                  consolidated with the accounts
                                  of the Lessee in accordance
                                  with accounting principles
                                  generally accepted under
                                  accounting standards of the
                                  State of Incorporation; and

                             (b)  for any other purpose, an
                                  entity from time to time:

                                  (i)  of which another has
                                       direct or indirect
                                       control or owns directly
                                       or indirectly more than
                                       50% of the voting share
                                       capital; or

                                  (ii) which is a direct or
                                       indirect subsidiary of
                                       another under the laws <PAGE> of
                                       the jurisdiction of its
                                       incorporation.

         SUPPLEMENTAL RENT   all amounts, liabilities and
                             obligations (other than Basic Rent
                             and Additional Rent) that Lessee
                             assumes or agrees to pay under this
                             Agreement to Lessor or any other
                             Person, including payment of
                             deposits, indemnities and the
                             Agreed Value.

         TAX INDEMNITEES     Lessor and each of the Financing
                             Parties.

         TAXES               all present and future taxes,
                             levies, imposts, duties or charges
                             in the nature of taxes, whatever
                             and wherever imposed, including
                             customs duties, value added taxes
                             or similar taxes and any franchise,
                             transfer, sales, use, business,
                             occupation, excise, personal
                             property, stamp or other tax or
                             duty imposed by any national or
                             local taxing or fiscal authority or
                             agency, together with any
                             withholding, penalties, additions
                             to tax, fines or interest thereon
                             or with respect thereto.

         TERM                the period commencing on the
                             Delivery Date and ending on the
                             Expiry Date or any later date
                             pursuant to Clause 12.4.

         TOTAL LOSS          with respect to the Airframe:

                             (a)  the actual, arranged or
                                  constructive total loss of the
                                  Airframe (including any damage
                                  to the Airframe which results
                                  in an insurance settlement on
                                  the basis of a total loss, or
                                  requisition for use or hire
                                  which results in an insurance
                                  settlement on the basis of a
                                  total loss);

                             (b)  the Airframe being destroyed,
                                  damaged beyond repair or
                                  permanently rendered unfit for
                                  normal use for any reason
                                  whatsoever;

                             (c)  the requisition of title, or
                                  other compulsory acquisition,
                                  capture, seizure, deprivation,
                                  confiscation or detention for
                                  any reason of the Airframe by
                                  the government of the State <PAGE> of
                                  Registration (whether de jure
                                  or de facto), but excluding
                                  requisition for use or hire
                                  not involving requisition of
                                  title; or

                             (d)  the hi-jacking, theft,
                                  condemnation, confiscation,
                                  seizure or requisition for use
                                  or hire of the Airframe
                                  (excluding any of the
                                  foregoing which is
                                  attributable to a Lessor Lien
                                  or the enforcement thereof)
                                  which deprives any Person
                                  permitted by this Agreement to
                                  have possession and/or use of
                                  the Airframe for more than 60
                                  consecutive days.

         TOTAL LOSS DATE     (a)  in the case of an actual total
                                  loss, the actual date on which
                                  the loss occurs or, if such
                                  date is unknown, the day on
                                  which the Aircraft was last
                                  heard of;

                             (b)  in the case of any of the
                                  events described in
                                  sub-paragraph (a) of the
                                  definition of "Total Loss"
                                  (other than an actual total
                                  loss), the earlier of (i) 30
                                  days after the date on which
                                  notice claiming such total
                                  loss is given to the relevant
                                  insurers, and (ii) the date on
                                  which such loss is admitted or
                                  compromised by the insurers;

                             (c)  in the case of any of the
                                  events described in
                                  sub-paragraph (b) of the
                                  definition of "Total Loss",
                                  the date on which such
                                  destruction, damage or
                                  rendering unfit occurs;

                             (d)  in the case of any of the
                                  events described in
                                  sub-paragraph (c) of the
                                  definition of "Total Loss",
                                  the date on which the relevant
                                  requisition of title or other
                                  compulsory acquisition,
                                  capture, seizure, deprivation,
                                  confiscation or detention
                                  occurs;

                             (e)  in the case of any of the
                                  events described in
                                  sub-paragraph (d) of the
                                  definition of "Total Loss",
                                  the expiry of the period of 60
                                  days referred to in such
                                  sub-paragraph (d);
<PAGE>
                             and, in each case, the Total Loss
                             shall be deemed to have occurred at
                             noon Greenwich Mean Time on such
                             date.

         1.2  INTERPRETATION

              (a)  In this Agreement, unless the contrary intention
                   is stated, a reference to:

                    (i)      each of "LESSOR", "LESSEE", "FINANCING
                             PARTY" or any other Person includes without
                             prejudice to the provisions of this
                             Agreement any successor in title to it and
                             any permitted assignee;

                    (ii)     words importing the plural shall include
                             the singular and vice versa;

                    (iii)    the term "including", when used in this
                             Agreement, means "including without
                             limitation" and "including but not limited
                             to".

                    (iv)     any document shall include that document as
                             amended, novated or supplemented from time
                             to time unless expressly stated to the
                             contrary;

                    (v)      a law (1) includes any statute, decree,
                             constitution, regulation, order, judgment
                             or directive of any Government Entity; (2)
                             includes any treaty, pact, compact or other
                             agreement to which any Government Entity is
                             a signatory or party; (3)_includes any
                             judicial or administrative interpretation
                             or application thereof; and (4) is a
                             reference to that provision as amended,
                             substituted or re-enacted; and

                    (vi)     a Clause, Schedule or Exhibit is a
                             reference to a clause of, a schedule to or
                             an exhibit to this Agreement.

              (b)   The headings in this Agreement are to be ignored
                    in construing this Agreement.

2.       REPRESENTATIONS and WARRANTIES

         2.1  LESSEE'S REPRESENTATIONS AND WARRANTIES

              The Lessee represents and warrants as of the date
              hereof to the Lessor as follows:

              (a)   STATUS:  The Lessee is a corporation duly
                    organized, validly existing and in good standing
                    under the laws of the State of Incorporation, has
                    the <PAGE> corporate power to own its assets and carry on
                    its business as it is being conducted and is (or
                    will at the relevant time be) the holder of all
                    necessary air transportation licenses required in
                    connection therewith and with the use and
                    operation of the Aircraft.

              (b)   POWER AND AUTHORITY:  The Lessee has the corporate
                    power to enter into and perform, and has taken all
                    necessary corporate action to authorize the entry
                    into, performance and delivery of, each of the
                    Operative Documents and the transactions
                    contemplated by the Operative Documents.

              (c)   LEGAL VALIDITY:  Each of the Operative Documents
                    constitutes the Lessee's legal, valid and binding
                    agreement, enforceable against Lessee in
                    accordance with its terms.

              (d)   NON-CONFLICT:  The entry into and performance by
                    the Lessee of, and the transactions contemplated
                    by, the Operative Documents do not and will not:

                    (i) conflict with any Applicable Laws binding
                        on the Lessee;

                    (ii)     conflict with the constitutional documents
                             of the Lessee; or

                    (iii)    conflict with or result in default under
                             any document which is binding upon the
                             Lessee or any of its assets, or result in
                             the creation of any Security Interest over
                             any of its assets, other than Permitted
                             Liens.

              (e)   AUTHORIZATION:  All authorizations, consents and
                    registrations required by, and all notifications
                    to be given by, the Lessee in connection with the
                    entry into, performance, validity and
                    enforceability of, the Operative Documents and the
                    transactions contemplated by the Operative
                    Documents have been (or will on or before Delivery
                    have been) obtained, effected or given (as
                    appropriate) and are (or will on their being
                    obtained or effected be) in full force and effect.

              (f)   NO IMMUNITY:

                    (i) The Lessee is subject to civil commercial
                        law with respect to its obligations under
                        this Agreement.

                    (ii)     Neither the Lessee nor any of its assets is
                             entitled to any right of immunity and the
                             entry into and performance of the Operative
                             Documents by the Lessee constitute private
                             and commercial acts.
<PAGE>
              (g)   FINANCIAL STATEMENTS:  the audited consolidated
                    financial statements of the Lessee and its
                    Subsidiaries most recently delivered to the
                    Lessor:

                    (i) have been prepared in accordance with
                        accounting principles and practices
                        generally accepted and consistently applied
                        in the State of Registration; and

                    (ii)     fairly present the consolidated financial
                             condition of the Lessee and its
                             Subsidiaries as at the date to which they
                             were drawn up and the consolidated results
                             of operations of the Lessee and its
                             Subsidiaries for the periods covered by
                             such statements.

              (h)   PARI PASSU:  The obligations of the Lessee under
                    this Agreement rank at least pari passu with all
                    other present and future unsecured and
                    unsubordinated obligations (including contingent
                    obligations) of the Lessee, with the exception of
                    such obligations as are mandatorily preferred by
                    law and not by virtue of any contract.

         2.2  LESSEE'S FURTHER REPRESENTATIONS AND WARRANTIES

              The Lessee further represents and warrants as of the
              date hereof to the Lessor that:

              (a)   NO DEFAULT:  No Event of Default has occurred and
                    is continuing or might reasonably be expected to
                    result from the entry into or performance of any
                    of the Operative Documents.

              (b)   REGISTRATION:

                    (i)      It is not necessary or advisable under the
                             laws of the State of Registration in order
                             to ensure the validity, effectiveness and
                             enforceability of the Operative Documents
                             or to establish, perfect or protect the
                             property rights of Lessor or any Financing
                             Party in the Leased Property that any
                             instrument relating thereto other than this
                             Agreement, the Certificate of Acceptance,
                             the Assignment or the Mortgage be filed,
                             registered or recorded or that any other
                             action be taken or, if any such filings,
                             registrations, recordings or other actions
                             are necessary, the same have been effected
                             or will have been effected on or before
                             Delivery.

                    (ii)     Under all Applicable Laws, including the
                             laws of the State of Incorporation and the
                             State of Registration, the property rights
                             of the Lessor and the Financing Parties
                             (pursuant to the Assignment and Mortgage)
                             in the Leased Property as of the Delivery
                             Date have been fully established, perfected
                             and protected and this Agreement will have
                             priority in all respects over the claims of
                             all  creditors of <PAGE> the Lessee, with the
                             exception of such claims as are mandatorily
                             preferred by law and not by virtue of any
                             contract.

              (c)   LITIGATION:  No litigation, arbitration or
                    administrative proceedings are pending or, to the
                    Lessee's knowledge, threatened against the Lessee
                    which, if adversely determined, would have a
                    material adverse effect upon its financial
                    condition or business or its ability to perform
                    its obligations under the Operative Documents.

              (d)   TAXES:  The Lessee has delivered all necessary
                    returns and payments due to all tax authorities
                    having jurisdiction over Lessee, including those
                    in the State of Incorporation and the State of
                    Registration, except where the failure to do so
                    would not have a material adverse effect upon its
                    financial condition or business or its ability to
                    perform its obligations under the Operative
                    Documents, and based upon the representations of
                    Lessor in Clause 2.4 and on the assumption that
                    Lessor is a "United States person" within the
                    meaning of Section 7701(a)(30) of the Internal
                    Revenue Code of 1986, as amended, Lessee is not
                    required by law to deduct or withhold any Taxes
                    from any payments under this Agreement.

         2.3  REPETITION

              The representations and warranties in Clause 2.1 and
              Clause 2.2 will survive the execution of this
              Agreement.  The representations and warranties
              contained in Clause 2.1 and Clause_2.2 will be deemed
              to be repeated by the Lessee on Delivery with reference
              to the facts and circumstances then existing.  The
              representations and warranties contained in Clause 2.1
              will be deemed to be repeated by the Lessee on each
              Rent Date as if made with reference to the facts and
              circumstances then existing.

         2.4  LESSOR'S REPRESENTATIONS AND WARRANTIES

              The Lessor represents and warrants to the Lessee that:

              (a)   STATUS: Lessor is a corporation duly organized,
                    validly existing and in good standing under the
                    laws of the State of Delaware and has the
                    corporate power to own the Leased Property and
                    carry on the business contemplated of Lessor under
                    the Operative Documents.  Lessor is a "citizen of
                    the United States" within the meaning of Section
                    40102(a)(15) of the Federal Aviation Law.

              (b)   POWER AND AUTHORITY:  Lessor has the corporate
                    power to enter into and perform, and has taken all
                    necessary corporate action to authorize the <PAGE> entry
                    into, performance and delivery of, each of the
                    Operative Documents and the transactions
                    contemplated by the Operative Documents.

              (c)   LEGAL VALIDITY:  Each of the Operative Documents
                    constitutes Lessor's legal, valid and binding
                    agreement, enforceable against Lessor in
                    accordance with its terms.

              (d)   NON-CONFLICT:  The entry into and performance by
                    Lessor of, and the transactions contemplated by,
                    the Operative Documents do not and will not:

                    (i)      conflict with any Applicable Laws binding
                             on Lessor;

                    (ii)     conflict with the certificate of
                             incorporation or bylaws of Lessor; or

                    (iii)    conflict with or result in default under
                             any document which is binding upon Lessor
                             or any of its assets.

              (e)   AUTHORIZATION:  So far as concerns the obligations
                    of Lessor, all authorizations, consents,
                    registrations and notifications required in
                    connection with the entry into, performance,
                    validity and enforceability of, and the
                    transactions contemplated by, the Operative
                    Documents by Lessor have been (or will on or
                    before Delivery have been) obtained, effected or
                    given (as appropriate) and are (or will on their
                    being obtained or effected be) in full force and
                    effect.

              (f)   NO IMMUNITY:

                    (i) Lessor is subject to civil commercial law
                        with respect to its obligations under the
                        Operative Documents.

                    (ii)     Neither Lessor nor any of its assets is
                             entitled to any right of immunity and the
                             entry into and performance of the Operative
                             Documents by Lessor constitute private and
                             commercial acts.

              (g)   RIGHT TO LEASE:  On the Delivery Date, Lessor
                    shall have the right to lease the Aircraft to
                    Lessee under this Agreement.

         2.5  REPETITION

              The representations and warranties in Clause 2.4 will
              survive the execution of this Agreement.  The
              representations and warranties contained in Clause 2.4
              will be deemed to be repeated by Lessor on Delivery and
              on each subsequent Rent Date as if made with reference
              to the facts and circumstances then existing.
<PAGE>
3.       CONDITIONS PRECEDENT

         3.1  LESSOR'S DOCUMENTARY CONDITIONS PRECEDENT

              Lessor's obligation to lease the Leased Property to
              Lessee under this Agreement is subject to the receipt
              of the following by Lessor and Mortgagee from Lessee on
              or before Delivery in form and substance satisfactory
              to the Lessor, provided that it shall not be a
              condition precedent to the obligations of the Lessor
              that any document be produced, or action taken, which
              is to be produced or taken by it or any Person within
              its control:

              (a)   CONSTITUTIONAL DOCUMENTS:  a copy of the
                    constitutional documents of the Lessee;

              (b)   RESOLUTIONS:  a copy of a resolution of the board
                    of directors of the Lessee approving the terms of,
                    and the transactions contemplated by, the
                    Operative Documents, resolving that it enter into
                    the Operative Documents, and authorizing a
                    specified individual or individuals to execute the
                    Operative Documents and accept delivery of the
                    Aircraft on its behalf;

              (c)   OPINIONS: (i) an opinion, in the form set out in
                    Exhibit D, in respect of Lessee's obligations
                    under the Operative Documents issued by
                    independent legal counsel acceptable to Lessor,
                    and (ii) an opinion from Special FAA Counsel as to
                    such matters as Lessor may reasonably request;

              (d)   APPROVALS:  evidence of the issuance of each
                    approval, license and consent which may be
                    required in relation to, or in connection with,
                    the performance by Lessee of any of its
                    obligations hereunder;

              (e)   LICENSES:  copies of the Lessee's air transport
                    license, air operator's certificate and all other
                    licenses, certificates and permits required by the
                    Lessee in relation to, or in connection with, the
                    operation of the Aircraft;

              (f)   CERTIFICATE:  a certificate of a duly authorized
                    officer of the Lessee:

                    (i)      setting out a specimen of each signature
                             referred to in Clause 3.1(b); and

                    (ii)     certifying that each copy of a document
                             specified in this Clause 3.1 is correct,
                             complete and in full force and effect;
<PAGE>
              (g)   INSURANCES:  certificates of insurance, brokers'
                    undertakings and other evidence satisfactory to
                    the Lessor and Mortgagee that the Lessee is taking
                    the required steps to ensure due compliance with
                    the provisions of this Agreement as to insurances
                    with effect on and after Delivery;

              (h)   FILINGS:  evidence that all filings,
                    registrations, recordings and other actions have
                    been or will be taken which are necessary to
                    ensure the validity, effectiveness and
                    enforceability of the Operative Documents and to
                    protect the respective rights of the Lessor and
                    the Mortgagee in the Leased Property; and

              (i)   GENERAL:  such other documents as Lessor may
                    reasonably request.

         3.2  LESSOR'S OTHER CONDITIONS PRECEDENT

              The obligation of the Lessor to deliver and lease the
              Leased Property under this Agreement is also subject to
              the following additional conditions precedent:

              (a)   REPRESENTATIONS AND WARRANTIES:  the
                    representations and warranties of Lessee under
                    Clauses 2.1 and 2.2 are correct and would be
                    correct if repeated on Delivery; and

              (b)   PAYMENTS:  all payments due to Lessor under this
                    Agreement on or before Delivery, including the
                    first payment of Basic Rent, shall have been
                    received by Lessor.

         3.3  LESSOR'S WAIVER

              The conditions specified in Clauses 3.1 and 3.2(a) and
              (b) are for the sole benefit of the Lessor and the
              Financing Parties and may be waived or deferred in
              whole or in part and with or without conditions by the
              Lessor.

         3.4  LESSEE'S CONDITIONS PRECEDENT

              The Lessee's obligation to accept the Leased Property
              on lease from Lessor under this Agreement is subject to
              the satisfaction by the Lessor of the following
              conditions precedent:

              (a)   RESOLUTIONS:  a copy of a resolution of the board
                    of directors of the Lessor approving the terms of,
                    and the transactions contemplated by, the
                    Operative Documents, resolving that it enter into
                    the Operative Documents, and authorizing a
                    specified individual or individuals to execute the
                    Operative Documents;
<PAGE>
              (b)   CERTIFICATE:  the receipt by the Lessee of a
                    certificate of a duly authorized officer of the
                    Lessor:

                    (i) setting out a specimen of each signature
                        referred to in sub-clause (a) above; and

                    (ii)     certifying that the copy of the resolutions
                             referred to in sub-clause (a) above is
                             correct, complete and in full force and
                             effect;

              (c)   REPRESENTATIONS AND WARRANTIES:  the
                    representations and warranties of the Lessor under
                    Clause 2.4 are correct and would be correct if
                    repeated on Delivery;

              (d)   REGISTRATION:  evidence that title to the Aircraft
                    is held by Lessor and that the Aircraft has been
                    validly registered under the laws of the State of
                    Registration;

              (e)   DELIVERY CONDITION:  the Aircraft shall be in the
                    condition set forth on Schedule_3;

              (f)   CONSENT:  the receipt by Lessee of the Consent,
                    duly signed by Lessor and Mortgagee;

              (g)   NO INJUNCTIONS:  no action or proceedings shall
                    have been instituted nor shall governmental action
                    be threatened before any Government Entity, nor
                    shall any order, judgment or decree have been
                    issued or proposed to be issued by any Government
                    Entity at the time of the Delivery Date to set
                    aside, restrain, enjoin or prevent the completion
                    and consummation of this Agreement or the
                    transactions contemplated hereby;

              (h)   OPERATIVE DOCUMENTS:  Lessee shall have received
                    executed counterparts of each of the Operative
                    Documents; and

              (i)   NO CHANGE IN LAW:  no change shall have occurred
                    after the date of this Agreement in Applicable Law
                    (including changes in interpretations thereof by
                    Government Entities) which, in the reasonable
                    opinion of Lessee, would make it a violation of
                    Applicable Law for Lessee to enter into any
                    transaction contemplated by the Operative
                    Documents.

         3.5  LESSEE'S WAIVER

              The conditions specified in Clause 3.4 are for the sole
              benefit of the Lessee and may be waived or deferred in
              whole or in part and with or without conditions by the
              Lessee.  If any of those conditions are not satisfied
              on or before Delivery and <PAGE> the Lessee (in its absolute
              discretion) nonetheless agrees to lease the Leased
              Property from the Lessor, then Lessor will ensure that
              those conditions are fulfilled within one month after
              the Delivery Date.

4.       COMMENCEMENT

         4.1  LEASING

              (a)   The Lessor will lease the Leased Property to the
                    Lessee and the Lessee will take the Leased
                    Property on lease in accordance with this
                    Agreement for the duration of the Term.

              (b)   The Lessor and the Lessee intend that this
                    Agreement constitute a "true lease" and a lease
                    for all United States federal income tax purposes.
                    Lessor and Lessee further intend and agree that
                    the Lessor shall be entitled to the full benefits
                    afforded lessors of aircraft under 11 U.S.C.
                    Section 1110, as amended.

         4.2  DELIVERY

              (a)   DELIVERY CONDITION:  Lessor shall deliver the
                    Leased Property in compliance with the delivery
                    conditions set forth in Schedule 3 and otherwise
                    "as is, where is and with all faults", except for
                    any items set forth on Annex 2 to the Certificate
                    of Delivery Condition and any other items agreed
                    in writing by Lessor and Lessee.  Lessor
                    represents and warrants to Lessee that Lessor has
                    an agreement with Coopesa for the modification of
                    the Aircraft, which commenced ________ 1999, to
                    cause the Aircraft to comply with the delivery
                    conditions set forth on Schedule 3.

              (b)   DELIVERY INSPECTION:  Before the Delivery Date,
                    Lessor shall cause Coopesa to make the Leased
                    Property available for Lessee to conduct a ground
                    inspection of the Aircraft and an inspection of
                    the Aircraft Documents to its satisfaction
                    (collectively, the "Ground Inspection").  The
                    Ground Inspection of the Aircraft shall include
                    the following:

                    (i)      Lessee shall be entitled to perform, at
                             Lessee's expense, a videotape borescope
                             inspection of all accessible gas path
                             sections of each Engine (accessible whether
                             by borescope port or other means),
                             including the low pressure and high
                             pressure compressors and the turbine area
                             of such Engine.  All items beyond the
                             Engine Manufacturer's maintenance manual
                             limits will be rectified at Lessor's sole
                             cost and expense.  No Engine will be "on
                             watch" for any reason requiring special or
                             out of sequence inspection.
<PAGE>
                    (ii)     In accordance with the Engine
                             Manufacturer's MPD, Lessor shall cause
                             Coopesa to perform a maximum power
                             assurance run and condition, acceleration
                             and bleed valve scheduling checks on each
                             Engine other than the Spare Engine. Coopesa
                             will record and evaluate each such Engine's
                             performance, with Lessee's representatives
                             entitled to be present.  Each such Engine
                             shall pass such tests without operational
                             limitations throughout the operating
                             envelope in accordance with the Engine
                             Manufacturer's maintenance manual.

                    (iii)    Lessor shall perform a videotape borescope
                             inspection of the APU, and all items beyond
                             the manufacturer's recommended limits will
                             be rectified at Lessee's sole cost and
                             expense.

                    (iv)     The Aircraft shall be weighed just prior to
                             Delivery.

              (c)   AIRCRAFT DOCUMENTS:  The Aircraft will be
                    accompanied by the Aircraft Documents listed on
                    Part_2 of Schedule_2.  Lessor will also provide to
                    Lessee all historical and current maintenance
                    manuals, aircraft and engine technical records and
                    data, and other aircraft documentation provided to
                    the Lessor by the Previous Operator.  Upon the
                    request of Lessee, Lessor shall use reasonable
                    efforts to obtain any required maintenance and
                    technical records or documents not in its custody.

              (d)   ACCEPTANCE FLIGHT:  Before the Delivery Date,
                    Lessee shall be entitled to perform on behalf of
                    the Previous Owner, Previous Operator and Lessor a
                    demonstration flight of the Aircraft pursuant to a
                    FAR Part 125 deviation of up to two hours with up
                    to four representatives of Previous Operator and
                    Lessor on-board as observers (the "Acceptance
                    Flight").  The Lessee shall perform its flight
                    protocol during such Acceptance Flight.  Lessee
                    shall also perform on behalf of Lessor such
                    further acceptance flights as may be necessary in
                    the event that the first or subsequent flights do
                    not confirm that the Aircraft complies with the
                    delivery requirements of this Agreement.  Lessee
                    shall insure the Aircraft during all such
                    acceptance flights, and Lessor shall reimburse
                    Lessee for all of its costs in connection with all
                    such acceptance flights.

              (e)   CORRECTION OF DISCREPANCIES:  The obligation of
                    Lessee to lease the Leased Property from Lessor is
                    subject to Lessor delivering the Leased Property
                    to Lessee in compliance with the conditions set
                    forth on Schedule 3.  If Lessor corrects all
                    material discrepancies from the conditions set
                    forth on Schedule 3 before delivery, or if Lessor
                    and Lessee agree that Lessor will correct or pay
                    for their correction as set forth on <PAGE> Annex 2 to
                    the Certificate of Delivery Condition, then Lessee
                    shall accept the Leased Property.  If, on the
                    Scheduled Delivery Date, the Aircraft is not, in
                    all material respects, in the condition set forth
                    in Schedule 3 and Lessor and Lessee do not agree
                    upon the correction of or payment for such
                    material discrepancies within 60 days after the
                    Scheduled Delivery Date, then Lessee may by notice
                    to Lessor given not later than 75 days after the
                    Scheduled Delivery Date terminate this Agreement.
                    If Lessee fails to give any such termination
                    notice within 75 days after the Scheduled Delivery
                    Date, Lessee shall be deemed to have accepted the
                    Leased Property for all purposes of this
                    Agreement.

              (f)   LESSEE'S PRE-DELIVERY MODIFICATIONS:  During the
                    pre-Delivery modifications performed by Coopesa,
                    Lessee shall be permitted to request that Lessor
                    cause Coopesa to replace or deactivate certain
                    aircraft systems identified by Lessee, so long as
                    such requested maintenance work will not  prevent
                    Lessor from delivering the Aircraft on the
                    Scheduled Delivery Date and are reasonably agreed
                    to by Lessor.  Lessee shall pay Coopesa, or
                    reimburse Lessor for, all charges of Coopesa for
                    performing such replacement or deactivation.  Any
                    materials or components that are removed from the
                    Aircraft and replaced shall be the property of
                    Lessee.  Any materials or components that are
                    deactivated or are otherwise removed and not
                    replaced shall remain the property of Lessor and
                    be returned to Lessor at Lessor's cost.


         4.3  DELAYED DELIVERY

              If owing to Coopesa delaying in the completion of the
              performance of the pre-Delivery modifications referred
              to in Clause 4.2(f) above or any Excusable Delay,
              Lessor delays in the delivery of, or fails to deliver,
              the Aircraft under this Agreement on the Scheduled
              Delivery Date, then in any such case:

              (a)   Lessor will not be responsible for any losses,
                    including loss of profit, costs or expenses
                    arising from or in connection with the delay or
                    failure suffered or incurred by Lessee; and

              (b)   Lessee will not be entitled to terminate this
                    Agreement or to reject the Aircraft when tendered
                    for delivery by Lessor, on the grounds of any such
                    delay, unless 60 days have elapsed after the
                    Scheduled Delivery Date and Lessee has given
                    written notice to Lessor to the effect that Lessee
                    terminates this Agreement.

         4.4  ACCEPTANCE AND RISK
<PAGE>
              (a)   The Leased Property will be delivered to, and will
                    be accepted by, the Lessee at the Delivery
                    Location on the Delivery Date immediately
                    following satisfaction of the conditions precedent
                    specified in Clauses 3.1, 3.2 and 3.4 (or their
                    waiver or deferral by the party entitled to grant
                    such waiver or deferral).

              (b)   Immediately following satisfaction of the
                    conditions precedent specified in Clauses_3.1, 3.2
                    and 3.4 (or their waiver or deferral by the party
                    entitled to grant such waiver or deferral), the
                    Lessee and the Lessor shall forthwith complete
                    Annex 1 to the Certificate of Delivery Condition
                    (specifying the maintenance status of the
                    Airframe, Engines, APU and Landing Gear) and
                    Lessor and Lessee shall sign and deliver to each
                    other the Certificate of Acceptance and the
                    Certificate of Delivery Condition.  Delivery of
                    the signed Certificate of Acceptance to the Lessor
                    shall constitute deemed delivery of the Aircraft
                    to the Lessee.

              (c)   On and from Delivery, the Leased Property will be
                    in every respect at the sole risk of the Lessee,
                    which will bear all risk of loss, theft, damage or
                    destruction to the Leased Property from any cause
                    whatsoever.

              (d)   Concurrently with Delivery, Lessor shall file for
                    recordation this Agreement at the FAA Aircraft
                    Registry.

5.       PAYMENTS

         5.1  SECURITY DEPOSIT; LETTER OF CREDIT

              (a)  SECURITY DEPOSIT:  On the date of this Agreement,
                   Lessee shall pay to Lessor an amount that, when added
                   to amounts previously paid to Lessor, equal the
                   Security Deposit.  The Security Deposit shall
                   constitute additional security for performance by
                   Lessee of its obligations under this Agreement, and the
                   following provisions shall apply:

                   (i)   If an Event of Default occurs and for as long as
                         it continues, the Lessor may (but shall not be
                         obligated to) apply all or any portion of the
                         Security Deposit in or towards satisfaction of any
                         sums due and payable to the Lessor under the
                         Operative Documents or to compensate the Lessor
                         for any sums which it may, in its discretion,
                         advance or expend as a result of any such Event of
                         Default.  Notwithstanding any such use or
                         application by the Lessor, the Lessee shall remain
                         in default under this Agreement until the full
                         amount owed by the Lessee, including interest
                         accrued thereon pursuant to Clause 5.11, shall
                         have been paid to the Lessor.  If the Lessor so
                         uses or applies all or any portion of the Security
                         Deposit, <PAGE> the Lessee shall, on demand of the
                         Lessor, replenish the Security Deposit in an
                         amount equal to the amount so used or applied
                         within five Business Days after Lessor's demand
                         therefor.

                   (ii)  Lessor may commingle the Security Deposit with its
                         general funds and may deposit the Security Deposit
                         in any account selected by Lessor, whether
                         interest-bearing or not, and any interest earned
                         on the Security Deposit will be the sole property
                         of Lessor.

                   (iii) The Security Deposit shall be returned to
                         Lessee within five Business Days of (1)
                         delivery to Lessor of a Letter of Credit in
                         accordance with Clause 5.1(b),
                         (2) redelivery of the Aircraft to the
                         Lessor in the condition required by
                         Clause 12 and Schedule 4, or (3) receipt by
                         the Lessor of the Agreed Value following a
                         Total Loss and all other amounts due under
                         Clause 11.1(b); provided, that if, upon the
                         occurrence of any event specified in the
                         foregoing subclause (1), (2) or (3), any
                         amounts payable by Lessee under this
                         Agreement remain outstanding, then the
                         Security Deposit shall be returned to
                         Lessee within five Business Days of the
                         Lessor being satisfied that the Lessee has
                         irrevocably paid to the Lessor all amounts
                         that are at that time outstanding under
                         this Agreement.

              (b)   LETTER OF CREDIT:  At any time on or after the
                    Delivery Date, Lessee shall be entitled, instead
                    of paying and having the Lessor hold the Security
                    Deposit in cash in accordance with Clause 5.1(a)
                    above, to provide the Lessor with the Letter of
                    Credit.  In the event that the Lessee elects to
                    provide the Letter of Credit, the following
                    provisions shall apply:

                    (i)      Lessee shall cause the Letter of Credit to
                             be renewed or replaced by the issuing bank
                             not later than 30 days before the
                             expiration of such Letter of Credit, and
                             shall cause the Letter of Credit to remain
                             in effect, as renewed, until 90 days after
                             the Expiry Date, subject to Clause
                             5.1(b)(iii) below.

                    (ii)     If an Event of Default occurs and for as
                             long as it continues, the Lessor may (but
                             shall not be obliged to) call on the Letter
                             of Credit and use or apply the proceeds in
                             or towards satisfaction of any sums due and
                             payable to the Lessor under this Agreement
                             or to compensate the Lessor for any sums
                             which it may, in its discretion, advance or
                             expend as a result of any such Event of
                             Default.  Notwithstanding any such use or
                             application by the Lessor, the Lessee shall
                             remain in default under this Agreement
                             until the full amount owed by the Lessee,
                             including interest accrued thereon pursuant
                             to Clause 5.11, shall have been paid to the
                             Lessor.  If the <PAGE> Lessor so uses or applies
                             all or any portion of the amount available
                             under the Letter of Credit, the Lessee
                             shall immediately, on demand of the Lessor,
                             procure the issue of a new Letter of Credit
                             acceptable to the Lessor for an amount
                             equal to the amount so used or applied, or
                             shall pay to the Lessor an amount in cash
                             equal to the amount so used or applied to
                             be held pursuant to Clause 5.1(a).

                    (iii)    The Letter of Credit shall be returned to
                             the Lessee within five Business Days of:

                             (1)  redelivery of the Aircraft to the
                                  Lessor in the condition required by
                                  Clause 12 and Schedule 3; or

                             (2)  receipt by the Lessor of the Agreed
                                  Value following a Total Loss and
                                  all other amounts due under Clause
                                  11.1(b);

                    provided, that if, upon the occurrence of any
                    event specified in the foregoing subclause (1) or
                    (2), any amounts payable by Lessee under this
                    Agreement remain outstanding, then the Letter of
                    Credit shall be returned to Lessee within five
                    Business Days of the Lessor being satisfied that
                    the Lessee has irrevocably paid to the Lessor all
                    amounts which are at that time outstanding under
                    this Agreement.

         5.2  RENTAL PERIODS

              The first Rental Period will commence on the Delivery
              Date and each subsequent Rental Period will commence on
              the date succeeding the last day of the previous Rental
              Period.  Each Rental Period will end on the date
              immediately preceding the next succeeding Rent Date
              except that if a Rental Period would otherwise overrun
              the Expiry Date, it will end on the Expiry Date.

         5.3  BASIC RENT

              (a)   TIME OF PAYMENT:  The Lessee will pay to the
                    Lessor or its order Basic Rent in advance on each
                    Rent Date.  Payment must be initiated adequately
                    in advance of the Rent Date to ensure that the
                    Lessor receives credit for the payment on the Rent
                    Date.

              (b)   AMOUNT:  The Basic Rent payable in respect of each
                    Rental Period will be the Basic Rent Amount as set
                    forth in Schedule 1.
<PAGE>
         5.4  ADDITIONAL RENT

              (a)   AMOUNT:  Subject to the proviso to Clause
                    7.2(e)(iii), Lessee will pay to Lessor Additional
                    Rent in relation to each calendar month (or
                    portion thereof) during the Term on the 12th day
                    following the end of that calendar month (or, with
                    respect to the last calendar month during the
                    Term, on the Expiry Date):

                    (i)      in respect of the Airframe, the Airframe
                             Additional Rent Rate for each Flight Hour
                             flown by the Airframe during that calendar
                             month ("AIRFRAME ADDITIONAL RENT");

                    (ii)     in respect of the Engines, the Engine
                             Additional Rent Rate for each Flight Hour
                             operated by each Engine during that
                             calendar month ("ENGINE ADDITIONAL RENT");

                    (iii)    in respect of the Landing Gear, the Landing
                             Gear Additional Rent Rate for each Flight
                             Hour flown by the Airframe during that
                             calendar month ("LANDING GEAR ADDITIONAL
                             RENT"); and

                    (iv)     in respect of the APU, the APU Additional
                             Rent Rate for each Flight Hour flown by the
                             Airframe during that calendar month ("APU
                             ADDITIONAL RENT");

              (b)   ADJUSTMENT:  Lessor and Lessee, acting in good
                    faith, may mutually adjust the amount of
                    Additional Rent after the Delivery Date, upon
                    notice from one to the other, not more frequently
                    than annually based on the following:

                    (i)      by reference to increases in the Consumer
                             Price Index as released by the Bureau of
                             Labor Statistics, United States Department
                             of Labor since the date of this Agreement;

                    (ii)     by reference to Manufacturer's and Engine
                             Manufacturer's recommendations, industry
                             experience, any change in the operational
                             environment of the Aircraft that materially
                             affects the cost of maintaining the
                             Aircraft and any change in the Flight Hour
                             to Cycle ratio of the operation of the
                             Aircraft (it being understood that the
                             Additional Rent is based on the assumption
                             that the operation of the Aircraft during
                             the Term will, on average, be not less than
                             one Flight Hour for each Cycle); and

                    (iii)    by reference to the Actual Costs
                             experienced by Lessee in the maintenance of
                             the Aircraft under this Agreement.
<PAGE>
         5.5  LESSOR'S MONEYS:  Lessor and Lessee intend that the
              Additional Rent are amounts paid by Lessee to the
              Lessor in consideration for the use of the Leased
              Property by the Lessee and the satisfaction of the
              Lessor's obligations under the Operative Documents and
              that, when paid, the Additional Rent is irrevocably and
              unconditionally the property of Lessor.
              Notwithstanding that stated intent, if and to the
              extent that the Additional Rent or any part thereof,
              under any Applicable Law or otherwise, is determined to
              be security deposits or otherwise the property of
              Lessee or if it is so determined those moneys are a
              debt owed to Lessee or that the Lessee shall have any
              interest in those moneys  (the "LESSORS' MONEYS"),
              Lessee and Lessor agree that subclauses (a) and (b)
              below shall apply:

              (a)   To the fullest extent permitted by law and by way
                    of continuing security, Lessee grants a Security
                    Interest in the Lessor's Moneys and all rights of
                    Lessee to payment thereof, the debt represented
                    thereby and all interest thereon and/or any and
                    all interest of Lessee therein to Lessor by way of
                    first priority Security Interest as security for
                    the Lessee's obligations and liability under this
                    Agreement (the "LESSEE'S LIABILITIES").  Except as
                    expressly permitted under this Agreement, Lessee
                    will not be entitled to payment of the Lessor's
                    Moneys.  Lessee will not assign, transfer or
                    otherwise dispose of all or part of its rights or
                    interest in the Lessor's Moneys and Lessee agrees
                    that it will enter into any additional documents
                    and instruments necessary or reasonably requested
                    by Lessor or the Mortgagee to evidence, create or
                    perfect the Lessor's rights to the Lessor's
                    Moneys.

              (b)   If Lessee fails to comply with any provision of
                    this Agreement or any Event of Default has
                    occurred and is continuing, Lessor may immediately
                    or at any time thereafter, without prior notice to
                    Lessee:

                    (i)      offset all or any part of the Lessee's
                             Liabilities against the liabilities of the
                             Lessor in respect of the Lessor's Moneys;
                             or

                    (ii)     apply or appropriate the Lessor's Moneys in
                             or towards the payment or discharge of the
                             Lessee's Liabilities in such order as
                             Lessor sees fit.

         5.6  PAYMENTS

              (a)   All payments of Rent by the Lessee to the Lessor
                    under this Agreement will be made for value on the
                    due date, for the full amount due, in Dollars and
                    in same day funds, settled through the New York
                    Clearing House System or such other funds as may
                    for the time being be customary for the settlement
                    in New York City of payments in Dollars by
                    telegraphic <PAGE> transfer to the account of the
                    Mortgagee at Citibank, N.A., ABA No. 021000089,
                    Account No. 4068-0522, Reference: "Vanguard
                    22120".

              (b)   If any Rent or other payment would otherwise
                    become due on a day which is not a Business Day,
                    it shall be due on the immediately succeeding
                    Business Day.

         5.7  GROSS-UP

              (a)   All payments by the Lessee under or in connection
                    with this Agreement will be made without offset or
                    counterclaim, free and clear of and without
                    deduction or withholding for or on account of any
                    Taxes (other than Non-Indemnified Taxes that
                    Lessee is compelled by law to deduct or withhold).

              (b)   All Taxes (other than Non-Indemnified Taxes) in
                    respect of payments under this Agreement shall be
                    for the account of the Lessee.

              (c)   If the Lessee is compelled by law to make payment
                    to an Indemnitee under or in connection with this
                    Agreement subject to any Tax and such Indemnitee
                    does not actually receive for its own benefit on
                    the due date a net amount equal to the full amount
                    provided for under this Agreement (other than
                    Non-Indemnified Taxes that Lessee is compelled by
                    law to deduct or withhold), the Lessee will pay
                    all necessary additional amounts to ensure receipt
                    by such Indemnitee of the full amount (other than
                    Non-Indemnified Taxes that Lessee is compelled by
                    law to deduct or withhold) so provided for.

         5.8  TAXATION

              (a)   The Lessee will on demand pay and indemnify each
                    Tax Indemnitee against all Taxes (other than
                    Non-Indemnified Taxes) levied or imposed against
                    or upon such Tax Indemnitee or the Lessee and
                    relating to or attributable to the Lessee, the
                    Operative Documents or the Aircraft directly or
                    indirectly in connection with the registration,
                    ownership, leasing, sub-leasing, delivery,
                    possession, use, operation, repair, maintenance,
                    overhaul, transportation, landing, storage,
                    presence or redelivery of the Aircraft or any part
                    thereof or any rent, receipts, insurance proceeds,
                    income or other amounts arising therefrom.

              (b)   If any Tax Indemnitee shall realize any Tax
                    savings (by way of refund, deduction, credit or
                    otherwise) in respect of any amount with respect
                    to which the Lessee shall have made a payment (or
                    increased payment) pursuant to Clause 5.7 or 5.10
                    or shall have indemnified such Tax <PAGE> Indemnitee
                    pursuant to Clause 5.8(a), or in respect of the
                    occurrence or transaction which gave rise to such
                    payment or indemnification, and such Tax savings
                    shall not have been taken into account previously
                    in calculating any indemnity payment made by the
                    Lessee, then such Tax Indemnitee shall, subject to
                    the Lessee's obligations to repay such amount to
                    such Tax Indemnitee if the relevant savings are
                    subsequently disallowed or canceled, pay to the
                    Lessee the amount of such Tax savings (together
                    with, in the case of a refund, any interest
                    received thereon); provided, that no Tax
                    Indemnitee shall be obliged to make any payment to
                    the Lessee pursuant to this Clause 5.8(b) to the
                    extent that the amount of any Tax savings in
                    respect of which such payment is to be made would
                    exceed the aggregate amount of all prior payments
                    made by the Lessee to, on behalf of or as
                    indemnification of such Tax Indemnitee under this
                    Agreement for Taxes less the amount of all prior
                    payments made pursuant to this Clause 5.8(b) in
                    respect of such Tax savings.  The Lessee
                    acknowledges that nothing contained in this Clause
                    5.8(b) shall interfere with the right of any Tax
                    Indemnitee to arrange its tax affairs in
                    whatsoever proper manner it thinks fit and, in
                    particular, no Tax Indemnitee shall be under any
                    obligation to claim any Tax savings in priority to
                    any other savings available to it; provided, that
                    subject to the foregoing each Tax Indemnitee shall
                    use reasonable good faith diligence to realize Tax
                    savings as described above.

         5.9  INFORMATION

              If Lessee is required by any Applicable Law, or by any
              third party, to deliver any report or return in
              connection with any Taxes (other than Non-Indemnified
              Taxes), the Lessee will duly complete the same and, in
              particular, will not state therein that any Person
              other than Lessee is responsible for the use and
              operation of the Aircraft and for the Taxes (other than
              Non-Indemnified Taxes) arising therefrom, and the
              Lessee will, on request, supply a copy of the report or
              return to any Tax Indemnitee.  If Lessee requires any
              information or cooperation from any Tax Indemnitee in
              order to satisfy its obligations as set forth above,
              such Tax Indemnitee shall promptly furnish such
              information or cooperation as Lessee may reasonably
              request upon written request by Lessee.  If actual
              notice is given by any taxing authority to Lessor that
              a report or return is required to be filed with respect
              to any Taxes (other than Non-Indemnified Taxes), the
              Lessor shall promptly notify Lessee of such required
              report or return.

         5.10 TAXATION OF INDEMNITY PAYMENTS

              (a)   If and to the extent that any sums payable to any
                    Tax Indemnitee by Lessee under this Agreement by
                    way of indemnity are insufficient, by reason of
                    any Taxes (other than Non-Indemnified Taxes)
                    payable in <PAGE> respect of those sums, for such Tax
                    Indemnitee to discharge the corresponding
                    liability to the relevant third party (including
                    any taxation authority), or to reimburse such Tax
                    Indemnitee for the cost incurred by it to a third
                    party (including any taxation authority), Lessee
                    will pay to such Tax Indemnitee such sum as will,
                    after the tax liability has been fully satisfied,
                    leave such Tax Indemnitee with the same amount as
                    it would have been entitled to receive in the
                    absence of that liability, together with interest
                    on the amount of the deficit at the Default Rate
                    in respect of the period commencing on the date on
                    which the payment of taxation is finally due until
                    payment by the Lessee (both before and after
                    judgment).

              (b)   If and to the extent that any sums constituting
                    (directly or indirectly) an indemnity to any Tax
                    Indemnitee but paid by the Lessee to any Person
                    other than such Tax Indemnitee are treated as
                    taxable in the hands of such Tax Indemnitee (other
                    than as a result of Non-Indemnified Taxes), then
                    Lessee will pay to such Tax Indemnitee such sum as
                    will, after the tax liability has been fully
                    satisfied, indemnify such Tax Indemnitee to the
                    same extent as it would have been indemnified in
                    the absence of such liability, together with
                    interest on the amount payable by Lessee under
                    this Clause 5.10(b) at the Default Rate in respect
                    of the period commencing on the date on which the
                    payment of taxation is finally due until payment
                    by the Lessee (both before and after judgment).

         5.11 DEFAULT INTEREST

              If the Lessee fails to pay any amount payable under
              this Agreement on the due date, the Lessee will pay on
              demand from time to time to Lessor or any Financing
              Party (as the case may be) interest (both before and
              after judgment) at the Default Rate on such amount from
              the due date to the day of payment in full by Lessee to
              Lessor or such Financing Party.  All such interest
              shall be compounded monthly and calculated on the basis
              of the actual number of days elapsed assuming a year of
              360 days.

         5.12 CONTEST

              If written claim is made against any Tax Indemnitee for
              or with respect to any Taxes (other than
              Non-Indemnified Taxes), such Tax Indemnitee shall
              promptly notify the Lessee.  If reasonably requested by
              the Lessee in writing within 30 days after such
              notification, such Tax Indemnitee shall, upon receipt
              of indemnity satisfactory to such Tax Indemnitee and at
              the expense of the Lessee (including all reasonable
              out-of-pocket costs, expenses, losses, legal and
              accountants' fees and disbursements, penalties and
              interest), in good faith contest or to the extent
              permissible by law allow Lessee to contest in Lessee's
              or such Tax Indemnitee's name, the validity,
              applicability or amount of such Taxes by either (i)
              resisting <PAGE> payment thereof if practicable and permitted
              by Applicable Law, or (ii) if payment is made, using
              reasonable efforts to obtain a refund thereof in
              appropriate administrative and judicial proceedings,
              and in the contest of any such claim by any Tax
              Indemnitee, such Tax Indemnitee shall apprise the
              Lessee of all material developments with respect to
              such contest, shall forward copies of all material
              submissions made in such contest and shall materially
              comply in good faith with any reasonable request
              concerning the conduct of any such contest; provided,
              that no Tax Indemnitee will be obliged to take any such
              action:

              (a)   if it waives its right under this Agreement to the
                    indemnity at issue in such contest; or

              (b)   unless there is a reasonable basis for such
                    contest, and if the amount of Tax in controversy
                    exceeds $50,000, Lessee provides such Tax
                    Indemnitee with an opinion of independent tax
                    counsel satisfactory to such Tax Indemnitee, both
                    as to counsel and substance, to the effect that
                    there is a reasonable basis for such contest; or

              (c)   for which Lessee has not made adequate provision
                    to the reasonable satisfaction of the Lessor or
                    such Financing Party (as the case may be) in
                    respect of the expense concerned; or

              (d)   if such action gives rise to any material
                    likelihood of the Aircraft or any interest therein
                    being sold, forfeited or otherwise lost or of
                    criminal liability on the part of the Lessor or
                    any Financing Party.

              If any Tax Indemnitee, in accordance with the
              foregoing, determines to pay such Taxes and seek a
              refund, Lessee will either pay such Taxes on such Tax
              Indemnitee's behalf and pay such Tax Indemnitee any
              amount due with respect to such payment or will
              promptly reimburse such Tax Indemnitee for such Taxes.
              If any Tax Indemnitee shall obtain a refund of all or
              any part of such Taxes paid by the Lessee, such Tax
              Indemnitee shall pay Lessee the amount of such refund;
              provided, that such amount shall not be payable before
              such time as the Lessee shall have made all payments or
              indemnities to any Tax Indemnitee then due with respect
              to Taxes and so long as no Default has occurred and is
              continuing.  If in addition to such refund any Tax
              Indemnitee shall receive an amount representing
              interest, attorneys fees or any other amount with
              respect to such refund, Lessee shall be paid that
              proportion of such interest, attorneys fees or any
              other amount which is fairly attributable to the Taxes
              paid by the Lessee prior to the receipt of such refund.
              No Tax Indemnitee shall enter into a settlement or
              other compromise with respect to, or otherwise concede,
              any claim by a taxing authority on account of Taxes
              being contested by Lessee pursuant to this Clause 5.12
              without the written consent of Lessee, which consent
              shall not be unreasonably withheld.  If a Tax
              Indemnitee enters into a settlement or other <PAGE> compromise
              without the written consent of Lessee in accordance
              with the preceding sentence, such Tax Indemnitee shall
              be deemed to have waived its right to be indemnified by
              Lessee with respect to such claim (but not with respect
              to any future claims).

         5.13 ABSOLUTE

              Lessee's obligations under this Agreement are absolute
              and unconditional irrespective of any contingency
              whatever including (but not limited to):

              (a)   any right of offset, counterclaim, recoupment,
                    defense or other right which either party to this
                    Agreement may have against the other;

              (b)   any unavailability of the Aircraft for any reason,
                    including a requisition of the Aircraft or any
                    prohibition or interruption of, interference with
                    or other restriction against the Lessee's use,
                    operation or possession of the Aircraft;

              (c)   any lack or invalidity of title or any other
                    defect in title, airworthiness, merchantability,
                    fitness for any purpose, condition, design or
                    operation of any kind or nature of the Aircraft
                    for any particular use or trade, or for
                    registration or documentation under the laws of
                    any relevant jurisdiction, or any Total Loss in
                    respect of or any damage to the Aircraft;

              (d)   any insolvency, bankruptcy, reorganization,
                    arrangement, readjustment of debt, dissolution,
                    liquidation or similar proceedings by or against
                    the Lessor or the Lessee;

              (e)   any invalidity, unenforceability or lack of due
                    authorization of, or other defect in, this
                    Agreement; or

              (f)   any other cause which, but for this provision,
                    would or might otherwise have the effect of
                    terminating or in any way affecting any obligation
                    of the Lessee under this Agreement;

              provided always, however, that this Clause 5.13 shall
              be without prejudice to the Lessee's right to claim
              damages and other relief from the courts in the event
              of any breach by the Lessor of its obligations under
              this Agreement, or in the event that, as a result of
              any lack or invalidity of title to the Aircraft on the
              part of the Lessor, the Lessee is deprived of its
              possession of the Aircraft.
<PAGE>
6.       MANUFACTURER'S WARRANTIES

         6.1  ASSIGNMENT

              Notwithstanding this Agreement and subject to the
              rights of Mortgagee pursuant to the Assignment, the
              Lessor will remain entitled to the benefit of each
              warranty, express or implied, and any unexpired
              customer and/or product support given or provided in
              respect of the Aircraft, any Engine or Part by any
              manufacturer, vendor, maintenance performer,
              subcontractor or supplier.  Unless an Event of Default
              shall have occurred and be continuing, Lessor hereby
              authorizes Lessee to pursue any claim thereunder in
              relation to defects affecting the Aircraft, any Engine
              or Part, and the Lessee agrees diligently to pursue any
              such claim which arises at its own cost.  The Lessee
              will notify the Lessor promptly upon becoming aware of
              any such claim.  The Lessor will provide such
              assistance to the Lessee in making a claim under any
              such warranties or customer and/or product support as
              the Lessee may reasonably request, and, if requested by
              the Lessee and at the Lessee's expense, will pursue a
              claim in its own name where the relevant manufacturer,
              vendor, maintenance performer, subcontractor or
              supplier has refused to acknowledge the Lessee's right
              to pursue that claim.

         6.2  PROCEEDS

              Unless an Event of Default shall have occurred and be
              continuing, all proceeds of any such claim as is
              referred to in Clause 6.1 and which exceed $250,000
              will be paid directly to Lessor at the account set
              forth in Clause 5.6(a), but if and to the extent that
              such claim relates:

              (a)   to defects affecting the Aircraft which the Lessee
                    has rectified; or

              (b)   to compensation for loss of use of the Aircraft,
                    an Engine or any Part during the Term; or

              (c)   to costs incurred by the Lessee in pursuing such
                    claim (whether or not proceeds of such claim are
                    payable to the Lessee);

              and provided no Default shall have occurred and be
              continuing, the proceeds will be promptly paid to the
              Lessee by Lessor but, in the case of (a), only on
              receipt of evidence reasonably satisfactory to Lessor
              that Lessee has rectified the relevant defect.

         6.3  PARTS

              Except to the extent the Lessor otherwise agrees in a
              particular case, the Lessee will procure that all
              engines, components, furnishings or equipment provided
              by <PAGE> the manufacturer, vendor, maintenance performer,
              subcontractor or supplier as a replacement for a
              defective Engine or Part pursuant to the terms of any
              warranty or customer and/or product support arrangement
              comply with Clause 8.13(a), are installed on the
              Aircraft promptly and that title thereto vests in the
              Lessor in accordance with Clause 8.17(a).  On
              installation those items will be deemed to be an Engine
              or Part, as applicable.

         6.4  AGREEMENT

              To the extent any warranties or customer and/or product
              support relating to the Aircraft are made available
              under an agreement between any manufacturer, vendor,
              maintenance performer, subcontractor or supplier and
              the Lessee, this Clause 6 is subject to that agreement.
              However, Lessee will:

              (a)   pay the proceeds of any claim thereunder that
                    exceed $250,000 to Lessor at the account set forth
                    in Clause 5.6(a) to be applied pursuant to
                    Clause_6.2 and, pending such payment, will hold
                    the claim and the proceeds on trust for Lessor;
                    and

              (b)   take all such steps as are necessary and requested
                    by the Lessor at the end of the Term to ensure the
                    benefit of any of those warranties or customer
                    and/or product support which have not expired are
                    vested in the Lessor (but subject to the rights of
                    Mortgagee under the Mortgage).

7.       LESSOR'S COVENANTS and DISCLAIMERS

         7.1  QUIET ENJOYMENT

              Provided no Event of Default shall have occurred and be
              continuing, none of the Lessor, its successors and
              assigns, any Financing Party or any Person claiming by,
              through or on account of any of such parties will
              interfere with the quiet use, possession and enjoyment
              of the Aircraft by the Lessee.

         7.2  LESSOR'S MAINTENANCE CONTRIBUTION

              (a)   AIRFRAME REIMBURSABLE EXPENSES:

                    (i)      Upon the performance by Lessee of a Heavy
                             Check on the Airframe during the Term of
                             this Lease, the Lessee's Actual Costs
                             incurred in completing, with respect to the
                             Airframe, all routine Heavy Check tasks
                             shall constitute "AIRFRAME REIMBURSABLE
                             EXPENSES".

                    (ii)     In connection with the performance of any
                             part of a Heavy Check, Lessee shall present
                             written evidence satisfactory to Lessor as
                             to <PAGE> the workscope to be performed and
                             payment installments relating to the
                             performance thereof in connection with such
                             Heavy Check and the amount of the Airframe
                             Reimbursable Expenses for approval by
                             Lessor.  Upon receipt of such written
                             evidence, and provided there then exists no
                             Default, Lessor shall pay to Lessee, or to
                             the independent repair facility performing
                             such work if directed by Lessee, an amount
                             equal to the lesser of (i) the Airframe
                             Reimbursable Expenses or (ii) an amount
                             equal to (1) all Airframe Additional Rent
                             previously paid by Lessee under this Lease,
                             minus (2)_all previous payments by Lessor
                             under this Clause 7.2(a).

              (b)   ENGINE REIMBURSABLE EXPENSES:

                    (i)      Upon the accomplishment of any CER for any
                             Engine during the Term requiring shop
                             repair, including any premature removal of
                             an Engine due to accelerated performance
                             deterioration revealed by Lessee's trend
                             monitoring data and replacement of LLPs
                             during any such shop visit, the Lessee's
                             Actual Cost incurred in completing such CER
                             shall constitute "ENGINE REIMBURSABLE
                             EXPENSES".

                    (ii)     Upon accomplishment of any CER for an
                             Engine, Lessee shall present written
                             evidence satisfactory to Lessor as to the
                             completion of such CER to such Engine and
                             the amount of Engine Reimbursable Expenses
                             for approval by Lessor.  Such shop visit
                             shall include a build standard to be
                             mutually agreed upon by Lessor and Lessee.
                             Upon receipt of such written evidence, and
                             provided there then exists no Default,
                             Lessor shall pay to Lessee, or to the
                             independent repair facility performing such
                             work if directed by Lessee, an amount equal
                             to the lesser of (i) the Engine
                             Reimbursable Expenses with respect to such
                             Engine or (ii) an amount equal to (1) all
                             Engine Additional Rent previously paid by
                             Lessee for such Engine pursuant to this
                             Lease, minus (2)_all previous payments for
                             such Engine by Lessor under this Clause
                             7.2(b).

              (c)   LANDING GEAR REIMBURSABLE EXPENSES:

                    (i)      Upon the performance by Lessee of an
                             overhaul of any Landing Gear or the
                             replacement of LLPs of any Landing Gear, in
                             each case in accordance with the Agreed
                             Maintenance Program, the Lessee's Actual
                             Cost incurred in completing such overhaul
                             shall constitute "LANDING GEAR REIMBURSABLE
                             EXPENSES".
<PAGE>
                    (ii)     Upon accomplishment of any such overhaul,
                             Lessee shall present written evidence
                             satisfactory to Lessor as to the completion
                             of such overhaul and the amount of Landing
                             Gear Reimbursable Expenses for approval by
                             Lessor.  Upon receipt of such written
                             evidence, and provided there then exists no
                             Default, Lessor shall pay to Lessee, or to
                             the independent repair facility performing
                             such work if directed by Lessee, an amount
                             equal to the lesser of (i) the Landing Gear
                             Reimbursable Expenses or (ii) an amount
                             equal to (1) all Landing Gear Additional
                             Rent previously paid by Lessee pursuant to
                             this Lease, minus (2) all previous payments
                             by Lessor under this Clause 7.2(c).

              (d)   APU REIMBURSABLE EXPENSES:

                    (i)      Upon the performance by Lessee of an
                             overhaul of the APU in accordance with the
                             Agreed Maintenance Program, the Lessee's
                             Actual Cost incurred in completing such
                             overhaul shall constitute "APU REIMBURSABLE
                             EXPENSES".

                    (ii)     Upon accomplishment of any such overhaul,
                             Lessee shall present written evidence
                             satisfactory to Lessor as to the completion
                             of such overhaul and the amount of APU
                             Reimbursable Expenses for approval by
                             Lessor.  Upon receipt of such written
                             evidence, and provided there then exists no
                             Default, Lessor shall pay to Lessee, or to
                             the independent repair facility performing
                             such work if directed by Lessee, an amount
                             equal to the lesser of (i) the APU
                             Reimbursable Expenses or (ii) an amount
                             equal to (1) all APU Additional Rent
                             previously paid by Lessee pursuant to this
                             Lease, minus (2) all previous payments by
                             Lessor under this Clause 7.2(d).

              (e)   ADDITIONAL PROVISIONS:
<PAGE>
                    (i)      Notwithstanding the provisions of Clauses
                             7.2(a)(i), (b)(i), (c)(i) and (d)(i),
                             Reimbursable Expenses shall not include the
                             cost of (1) any replacements or repairs
                             caused by foreign object damage, ingestion,
                             accident, faulty maintenance or
                             installation, any incident, improper
                             operations, abuse, neglect, misuse or
                             elective parts replacement (except to the
                             extent ordinarily accomplished during such
                             maintenance or overhaul), (2) any
                             modifications or interior reconfiguration,
                             (3) the accomplishment of all airworthiness
                             directives or manufacturer's service
                             bulletins not incorporated into the
                             Maintenance Program, (4) maintenance work
                             that is reimbursable by a claim under the
                             manufacturer's warranties or by insurance
                             (but including deductibles for purposes of
                             this provision) or (5)_any overhaul of time
                             controlled components accomplished during
                             the Heavy Check, CER or overhaul except
                             such as are part of the routine tasks
                             included at such Heavy Check, CER or
                             overhaul or that, when tested during such
                             Heavy Check, CER or overhaul, fail and need
                             to be replaced.

                    (ii)     Notwithstanding anything to the contrary
                             contained in this Clause 7.2, any such
                             maintenance and the extent and nature of
                             such maintenance to be performed shall be
                             conducted at an Agreed Maintenance
                             Performer.  Lessor shall be entitled to
                             have representatives present during the
                             performance of such maintenance to oversee
                             and approve all aspects of such
                             performance, including the workscope
                             thereof to ensure that such maintenance is
                             in accordance with the Agreed Maintenance
                             Program.  Lessor shall be notified by
                             Lessee prior to the commencement of any
                             maintenance work described in this Clause
                             7.2, including as to the Agreed Maintenance
                             Performer and for Lessor's approval of the
                             workscope.

                    (iii)    Lessee acknowledges that Lessee is required
                             to pay the full cost of and to perform (or
                             cause to be performed) any check, shop
                             visit, overhaul or other maintenance
                             required by the Agreed Maintenance Program,
                             whether or not Lessor is required to make
                             any payments pursuant to this Clause 7.2,
                             and any costs incurred by Lessee in
                             performing any such check, shop visit,
                             overhaul or other maintenance required by
                             the Agreed Maintenance Program shall be for
                             Lessee's account solely; provided, that if
                             Lessor's contribution pursuant to Clause
                             7.2(a), (b), (c) or (d) above is ever less
                             than the Reimbursable Expenses incurred by
                             Lessee with respect to the Airframe,
                             Engines, Landing Gear or APU, then Lessee's
                             obligation under Clause_5.4 to make
                             payments of Additional Rent with respect to
                             the Airframe, Engines, Landing <PAGE> Gear or APU,
                             respectively, shall be suspended until an
                             equivalent amount to such shortfall has
                             been retained by Lessee.

                    (iv)     Lessor shall deposit all Additional Rent in
                             an interest-bearing account with the
                             Mortgagee or with another financial
                             institution that Mortgagee uses for other
                             similar amounts deposited with it.  Lessor
                             shall not commingle its general funds in
                             such account, but such account may hold
                             security deposits, additional rent and
                             similar payments paid to Affiliates of
                             Lessor under other aircraft leases.  Any
                             interest earned on the Additional Rent will
                             be added to and become a part of the
                             Additional Rent.

         7.3  INTENTIONALLY OMITTED


         7.4  LESSOR'S AD COST SHARING CONTRIBUTION

              (a)   Provided no Default has occurred and is
                    continuing, upon the performance by  Lessee of
                    "Qualifying AD Work" (as hereinafter defined)
                    relating to (i) any single airworthiness directive
                    issued by the Aviation Authority after the
                    Delivery Date and requiring terminating action
                    during the Term, (ii) any FAR regulation
                    promulgated after the Delivery Date requiring the
                    installation on the Aircraft during the Term of a
                    16-parameter flight data recorder or (iii) any FAR
                    regulation promulgated after the Delivery Date
                    requiring the installation in the cargo
                    compartment of the Aircraft during the Term of
                    fire indicators, Lessor will pay to Lessee, by way
                    of contribution to the cost of maintenance of the
                    Aircraft, an amount equal to the product of
                    (1)_the amount by which the Actual Cost of the
                    Qualifying AD Work for such single airworthiness
                    directive or either of such regulations exceeds
                    $50,000, multiplied by (2)_a fraction the
                    numerator of which is 84 minus the number of
                    months (rounded to the nearest whole number of
                    months) from the Delivery Date to the date of
                    completion of such Qualifying AD Work and the
                    denominator is 84.

              (b)   "Qualifying AD Work" means maintenance work
                    performed on the Aircraft solely in order to
                    comply fully with airworthiness directives issued
                    by the Aviation Authority after the Delivery Date
                    on a terminating action basis or with the two FAR
                    regulations described in Clause 7.4(a)(ii) and
                    (iii), and excluding work performed for any other
                    purpose, such as compliance with airworthiness
                    directives by means of repetitive inspections,
                    recording compliance work in the Aircraft
                    Documents and all other maintenance work.
<PAGE>
              (c)   The Lessor will be obligated to pay any amount
                    specified in Clause 7.4(a) within 14 days after
                    submission by the Lessee to the Lessor of an
                    invoice and supporting documentation reasonably
                    satisfactory to the Lessor evidencing the
                    performance of Qualifying AD Work for an
                    airworthiness directive.

         7.5  REGISTRATION AND FILINGS

              The Lessor shall, at the Lessor's cost:

              (a)   maintain the registration of the Aircraft with the
                    Aviation Authority reflecting (so far as permitted
                    by Applicable Law) the respective interests of
                    Lessor and Lessee and not do or suffer to be done
                    anything which might reasonably be expected to
                    adversely affect that registration; and

              (b)   do all acts and things (including making any
                    filing or registration with the Aviation Authority
                    or any other Government Entity) as may be required
                    following any change in the ownership or financing
                    of the Aircraft.

         7.6  AGREED MAINTENANCE PERFORMERS

              The Lessor may object to and may exclude any
              maintenance organization (other than Lessee) being
              included as an "Agreed Maintenance Performer" for a
              valid business reason; provided, that Lessor must
              provide such objection within 45 days of scheduled
              maintenance.  The Lessor shall furnish to Lessee in
              writing from time to time a list of all maintenance
              organizations excluded from the definition of "Agreed
              Maintenance Performer" pursuant to the preceding
              sentence, which list may be amended by Lessor from time
              to time.  The Lessor and the Lessee shall consult in
              good faith regarding any organizations on such list
              from time to time at the request of either party.

         7.7  EXCLUSION

              THE AIRCRAFT IS ACCEPTED BY THE LESSEE "AS IS, WHERE IS
              WITH ALL FAULTS" AND LESSEE AGREES AND ACKNOWLEDGES
              THAT, SAVE AS IS EXPRESSLY STATED IN THIS AGREEMENT,
              LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND
              LESSOR HAS NOT AND WILL NOT BE DEEMED TO HAVE MADE OR
              GIVEN, ANY CONDITIONS, WARRANTIES OR REPRESENTATIONS,
              EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT,
              INCLUDING:

              (a)   THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY,
                    FITNESS FOR ANY USE OR PURPOSE, VALUE, CONDITION,
                    OR DESIGN, OF THE AIRCRAFT OR ANY PART; OR
<PAGE>
              (b)   ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
                    IN TORT, WHETHER OR NOT ARISING FROM LESSOR'S
                    NEGLIGENCE, ACTUAL OR IMPUTED (BUT EXCLUDING ANY
                    SUCH OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
                    IN TORT WHICH ARISES FROM LESSOR'S GROSS
                    NEGLIGENCE OR WILFUL MISCONDUCT); OR

              (c)   ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
                    FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR ANY
                    LIABILITY OF LESSEE TO ANY THIRD PARTY, OR FOR ANY
                    OTHER DIRECT, INDIRECT, INCIDENTAL OR
                    CONSEQUENTIAL DAMAGES.

         7.8  LESSEE'S WAIVER

              LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND THE LESSOR,
              ALL ITS RIGHTS IN RESPECT OF ANY CONDITION, WARRANTY OR
              REPRESENTATION, EXPRESS OR IMPLIED, ON THE PART OF
              LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER AND
              WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF
              THE OPERATION OR PERFORMANCE OF THE AIRCRAFT OR THIS
              AGREEMENT EXCEPT AS IS OTHERWISE EXPRESSLY STATED IN
              THIS AGREEMENT.

         7.9  LESSEE'S CONFIRMATION

              LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE
              PROVISIONS OF CLAUSES 7.7 AND 7.8 AND ACKNOWLEDGES THAT
              BASIC RENT AND OTHER AMOUNTS HAVE BEEN CALCULATED
              NOTWITHSTANDING ITS PROVISIONS.

8.       LESSEE'S COVENANTS

         8.1  DURATION

              The undertakings in this Clause 8 and in Clause 12
              will:

              (a)   except as otherwise stated, be performed at the
                    expense of the Lessee; and

              (b)   remain in force until redelivery of the Aircraft
                    to the Lessor in accordance with this Agreement
                    and thereafter to the extent of any accrued rights
                    of the Lessor in relation to those undertakings.
<PAGE>
         8.2  INFORMATION

              The Lessee shall:

              (a)   furnish to the Lessor, with a copy to Mortgagee:

                    (i)      within 60 days after the last day of the
                             first three fiscal quarters of each fiscal
                             year of the Lessee, unaudited consolidated
                             quarterly financial statements of the
                             Lessee prepared for such quarter, including
                             a consolidated balance sheet of the Lessee
                             and its Subsidiaries as of the last day of
                             such quarter and consolidated statements of
                             income and retained earnings for such
                             fiscal quarter and for the year to date
                             and, on a comparative basis, figures for
                             the corresponding periods of the
                             immediately preceding fiscal year, all in
                             reasonable detail, each such statement to
                             be certified in a certificate of Lessee's
                             chief financial officer or chief accounting
                             officer as fairly presenting the financial
                             position and the results of operations of
                             the Lessee as at its date and for such
                             quarter (subject to year-end audit
                             adjustments) and as having been prepared in
                             accordance with GAAP;

                    (ii)     as soon as available but not in any event
                             later than 105 days after the last day of
                             each fiscal year of the Lessee, audited
                             consolidated financial statements of the
                             Lessee prepared for such year, including a
                             consolidated balance sheet of the Lessee
                             and its Subsidiaries as of the last day of
                             such year, consolidated statements of
                             income and retained earnings of the Lessee
                             and its Subsidiaries for such fiscal year,
                             a consolidating balance sheet of the Lessee
                             and its Subsidiaries as of the last day of
                             such year and consolidating statements of
                             income and retained earnings of the Lessee
                             and its Subsidiaries for such fiscal year
                             and in all cases on a comparative basis
                             figures for the immediately preceding
                             fiscal year, all in reasonable detail, each
                             prepared in accordance with GAAP and
                             certified without qualification by Ernst &
                             Young or another of the largest
                             international firms of independent
                             certified public accountants as fairly
                             presenting the financial position and the
                             results of operations of Lessee and its
                             Subsidiaries at the end of and for such
                             fiscal year and as having been prepared in
                             accordance with GAAP;

                    (iii)    in lieu of delivering the financial
                             statements referred to in sub-clauses (i)
                             and (ii) above, (1) Lessee may deliver
                             Quarterly Reports on Form 10-Q and Annual
                             Reports on Form 10-K for the respective
                             periods filed by the Lessee pursuant to and
                             in <PAGE> accordance with the Securities Exchange
                             Act of 1934, as amended, and (2) Lessee may
                             cause such financial statements (or 10-Qs
                             and 10-Ks) to be publicly available on the
                             internet through EDGAR filings with the
                             Securities and Exchange Commission or
                             otherwise;

                    (iv)     at the same time as it is issued to the
                             creditors of the Lessee, a copy of each
                             notice or circular issued to the Lessee's
                             creditors as a group; and

                    (v)      on request from time to time such other
                             information regarding the Lessee and its
                             business and affairs as the Lessor or
                             Mortgagee may reasonably request;

              (b)   on request, inform the Lessor as to the current
                    location of the Airframe and Engines and the
                    serial number and owner of any engine installed on
                    the Airframe;

              (c)   promptly furnish to Lessor all information that
                    Lessor from time to time reasonably requests
                    regarding the Aircraft, any Engine or any Part and
                    its use, location and condition, including the
                    hours available on the Aircraft and any Engine
                    until the next scheduled check, inspection,
                    overhaul or shop visit, as the case may be;

              (d)   on request, furnish to the Lessor evidence
                    reasonably satisfactory to the Lessor that all
                    Taxes and charges incurred by the Lessee with
                    respect to the Aircraft have been paid and
                    discharged in full;

              (e)   provide to the Lessor, within five days following
                    the end of each calendar month during the Term, a
                    monthly report on the Aircraft in the form set out
                    in Exhibit_F or such other form as the Lessee may
                    select providing substantially the same
                    information;
<PAGE>
              (f)   promptly notify Lessor and Mortgagee of:

                    (i)      any Total Loss, any Engine Loss, any theft
                             of the Airframe or any Engine, any damage
                             to the Aircraft if the potential cost of
                             repair may reasonably be expected to exceed
                             the Damage Notification Threshold or any
                             modification to the Aircraft if the
                             potential cost may reasonably be expected
                             to exceed the Damage Notification
                             Threshold;

                    (ii)     any claim or other occurrence likely to
                             give rise to a claim under the Insurances
                             (but, in the case of hull claims only, in
                             excess of the Damage Notification
                             Threshold) and details of any negotiations
                             with the insurance brokers over any such
                             claim; and

                    (iii)    any litigation, arbitration or
                             administrative proceedings that are pending
                             or, to the Lessee's knowledge, threatened
                             against the Lessee which, if adversely
                             determined, would have a material adverse
                             effect upon its financial condition or
                             business or its ability to perform its
                             obligations under this Agreement.

         8.3  LAWFUL AND SAFE OPERATION

              The Lessee shall:

              (a)   comply with all Applicable Law for the time being
                    in force in any country or jurisdiction in which
                    the Aircraft is being operated which is applicable
                    to the Aircraft or the use and operation of the
                    Aircraft;

              (b)   not use the Aircraft in any manner contrary to any
                    requirement or regulation of the Aviation
                    Authority or for any purpose for which the
                    Aircraft is not designed or reasonably suitable;

              (c)   ensure that the crew and engineers employed by it
                    in connection with the operation and maintenance
                    of the Aircraft have the qualifications and hold
                    the licenses required by the Aviation Authority
                    and Applicable Law;

              (d)   use the Aircraft solely in commercial or other
                    operations for which the Lessee is duly authorized
                    by the Aviation Authority and Applicable Law;

              (e)   not knowingly use the Aircraft (or use it when the
                    Lessee ought reasonably to have known that it was
                    being so used) for the carriage of:

                    (i)      whole animals, living or dead, except in
                             the cargo compartments according to IATA
                             regulations, and except domestic pet
                             animals <PAGE> carried in a suitable container to
                             prevent the escape of any liquid and to
                             ensure the welfare of the animal;

                    (ii)     acids, toxic chemicals, other corrosive
                             materials, explosives, nuclear fuels,
                             nuclear wastes or any nuclear assemblies or
                             components, except as permitted for cargo
                             aircraft under the "Restriction of Goods"
                             schedule issued by IATA from time to time
                             and provided that all the requirements for
                             packaging or otherwise contained therein
                             are fulfilled;

                    (iii)    any other goods, materials or items of
                             cargo which could reasonably be expected to
                             cause damage to the Aircraft and which
                             would not be adequately covered by the
                             Insurances; or

                    (iv)     any item or substance whose carriage is
                             illegal under Applicable Law;

              (f)   not utilize the Aircraft for purposes of training,
                    qualifying or re-confirming the status of cockpit
                    personnel except for the benefit of the Lessee's
                    cockpit personnel, and then only if the use of the
                    Aircraft for such purpose is not disproportionate
                    to the use for such purpose of other aircraft of
                    the same type operated by the Lessee;

              (g)   not (other than for bona fide safety reasons)
                    cause or permit the Aircraft to proceed to, or
                    remain at, any location which is for the time
                    being the subject of a prohibition order (or any
                    similar order or directive) by:

                    (i)      any Government Entity of the State of
                             Registration; or

                    (ii)     any Government Entity of the country in
                             which such location is situated; or

                    (iii)    any Government Entity having jurisdiction
                             over the Lessee or the Aircraft;

              (h)   obtain and maintain in full force all
                    certificates, licenses, permits and authorizations
                    required for the use and operation of the Aircraft
                    for the time being, and for the making of payments
                    required by, and the compliance by the Lessee with
                    its other obligations under, this Agreement.
<PAGE>
         8.4  TAXES AND OTHER CHARGES

              The Lessee will promptly pay:

              (a)   all license and registration fees, Taxes (other
                    than Non-Indemnified Taxes) and other amounts of
                    any nature imposed by any Government Entity that
                    are imposed on the Lessee or for which the Lessee
                    is responsible under this Agreement with respect
                    to the Aircraft, including the purchase,
                    ownership, delivery, leasing, possession, use,
                    operation, return, sale or other disposition of
                    the Aircraft; and

              (b)   all rent, fees, charges, Taxes (other than
                    Non-Indemnified Taxes) imposed on the Lessee and
                    other amounts in respect of any premises where the
                    Aircraft or any Part thereof is located from time
                    to time during the Term;

              except to the extent that such payment is being
              contested in good faith by appropriate proceedings in
              accordance with Clause 5.12.

         8.5  SUB-LEASING

              Lessee will not sub-lease or otherwise part with
              possession of the Aircraft, the Engines or any Part
              except that the Lessee may part with possession:

              (a)   with respect to the Aircraft, the Engines or any
                    Part, to the relevant manufacturers for testing or
                    similar purposes or to an Agreed Maintenance
                    Performer for service, repair, maintenance or
                    overhaul work or for alterations, modifications or
                    additions to the extent required or permitted by
                    this Agreement;

              (b)   with respect to an Engine or Part, as expressly
                    permitted by this Agreement;

              (c)   with respect to the Aircraft or an Engine,
                    pursuant to an ACMI (aircraft crew, maintenance
                    and insurance) "wet" lease or charter of the
                    Aircraft in which operational control of the
                    Aircraft remains with the Lessee at all times,
                    provided the Aircraft remains registered with the
                    Aviation Authority;

              (d)   with respect to the Aircraft or an Engine, and
                    with the consent of Lessor and Mortgagee (which
                    consent shall not be unreasonably withheld),
                    pursuant to a sublease to a certificated air
                    carrier under the following conditions:

                    (i)      no Default shall have occurred and be
                             continuing;
<PAGE>
                    (ii)     notwithstanding such sublease, Lessee shall
                             remain primarily responsible to Lessor
                             hereunder and the sublease, by its terms,
                             shall be expressly subject and subordinate
                             in all respect to this Agreement;

                    (iii)    the sublease shall include clauses
                             identical to or having the same substantive
                             effect as Clauses 2.1, 2.2, 5, 7.7, 7.8, 8,
                             9, 10, 13, 15.11 and Schedule 5 of this
                             Agreement, except that a sublease may
                             impose additional or more stringent
                             obligations on, or give fewer rights to,
                             any sublessee than are imposed on Lessee
                             under the provisions of this Agreement and
                             that the term of the sublease shall not be
                             capable of extending beyond the Expiry
                             Date; provided, that any sublease to a
                             certificated air carrier that is an
                             Affiliate of Lessee (an "Affiliate
                             Sublease") need only include clauses
                             identical to or having the same substantive
                             effect as Clauses 8 and 9 and Schedule 5 of
                             this Agreement;

                    (iv)     the rights, title and interests of Lessor
                             and the Financing Parties in and to the
                             Leased Property and this Agreement shall be
                             duly evidenced and protected to the
                             satisfaction of Lessor and such Financing
                             Parties (including as to the making of all
                             necessary filings and registrations) and
                             such interests shall not, in Lessor's
                             reasonable opinion, be prejudiced by the
                             sublease;

                    (v)      Lessee and the sublessee shall have
                             executed and delivered to Lessor a security
                             assignment in respect of the sublease
                             together with an acknowledgment of such
                             assignment, each such document to be in
                             such form as Lessor and Mortgagee shall
                             reasonably require;

                    (vi)     the sublessee shall be a reputable air
                             carrier, experienced in operating aircraft
                             of the same type as the Aircraft, shall
                             hold all necessary consents, licenses,
                             permits and authorizations required under
                             the applicable law of the state of
                             incorporation or establishment  of such
                             carrier for the public transport of
                             passengers and cargo, and shall not be
                             subject to any event of the types described
                             in Clauses 13.1(g), (h) or (i) as of the
                             commencement of the sublease;

                    (vii)    the Aircraft shall not be based or
                             re-registered outside the State of
                             Registration if the Lessor or Mortgagee
                             determines, in its absolute discretion,
                             that the foreign jurisdiction is not
                             acceptable in terms of political and
                             judicial risk;
<PAGE>
                    (viii)   Lessee shall give written notice to
                             Lessor and the Financing Parties of any
                             proposed sublease at least 30 days prior
                             to the date on which it is proposed that
                             such sublease be executed (which notice
                             shall include the identity of any
                             proposed change in the State of
                             Registration and, if then determined,
                             the term and the delivery date of the
                             proposed Sublease), and within a
                             reasonable period prior to the execution
                             by Lessee of any sublease, Lessee will
                             provide Lessor and the Financing Parties
                             with a copy of the draft sublease in
                             order for Lessor and the Financing
                             Parties to satisfy themselves that the
                             conditions set out in this Clause 8.5(d)
                             as to the form of the sublease are
                             fulfilled; provided, that in connection
                             with an Affiliate Sublease that does not
                             contemplate a change in the State of
                             Registration, Lessee need only give
                             Lessor and the Financing Parties written
                             notice of such Affiliate Sublease five
                             days prior to the date on which such
                             Affiliate Sublease is proposed to be
                             executed;

                    (ix)     prior to delivery of the Aircraft to the
                             sublessee under any sublease, Lessee shall
                             deliver to Lessor an original counterpart
                             of the sublease duly executed by Lessee and
                             sublessee, and except in connection with an
                             Affiliate Sublease shall provide Lessor
                             with the equivalent of the conditions
                             precedent set forth in Clause 3.1 and 3.2
                             applicable to such sublessee;

                    (x)      Lessee shall be responsible for all
                             reasonable costs incurred by Lessor and any
                             Financing Party in connection with the
                             Sublease; and

                    (xi)     the sublease shall provide that no further
                             subleases of the Aircraft by the sublessee
                             shall be permitted.

         8.6  INSPECTION

              (a)   Lessor, any Financing Party and any Person
                    designated by Lessor or any Financing Party may at
                    any time visit, inspect and survey the Aircraft,
                    any Engine or any Part and for such purpose may,
                    subject to any applicable Aviation Authority
                    regulation, travel on the flight deck as observer.
                    Subject to Clause 8.6(c)(ii) below, Lessor, any
                    Financing Party or any designee shall not be
                    restricted during such inspection from opening any
                    panels, bays or doors on the Aircraft or from
                    inspecting any part of the Aircraft.
<PAGE>
              (b)   Lessee shall have no responsibility for the costs
                    and expenses of Lessor and any Financing Party in
                    connection with any such visit, inspection or
                    survey.

              (c)   The Lessor shall:

                    (i)      have no duty to make, or liability arising
                             out of, any such visit, inspection or
                             survey; and

                    (ii)     so long as no Default has occurred and is
                             continuing, not exercise such right other
                             than on reasonable notice and so as not to
                             disrupt unreasonably the maintenance or
                             operation of the Aircraft.

         8.7  PROTECTION OF TITLE

              The Lessee shall:

              (a)   not do or knowingly permit to be done or omit or
                    knowingly permit to be omitted to be done any act
                    or thing which might reasonably be expected to
                    jeopardize the respective rights, title and
                    interest of Mortgagee as mortgagee of the Aircraft
                    and assignee of this Agreement or the Lessor as
                    owner of the Aircraft and lessor under this
                    Agreement or the validity, enforceability or
                    priority of the Mortgage and the Assignment;

              (b)   on all occasions when the ownership of the
                    Aircraft, any Engine or any Part is relevant, make
                    clear to third parties that title is held by the
                    Lessor and is subject to the Mortgage;

              (c)   not at any time:

                    (i)      represent or hold out the Lessor or any
                             Financing Party as carrying goods or
                             passengers on the Aircraft or as being in
                             any way connected or associated with any
                             operation or carriage (whether for hire or
                             reward or gratuitously) which may be
                             undertaken by the Lessee; or

                    (ii)     pledge the credit of the Lessor or any
                             Financing Party;

              (d)   ensure that there is always affixed, and not
                    removed or in any way obscured, a fireproof plate
                    (having dimensions of not less than 6 in. x 4 in.)
                    in a reasonably prominent position on the Aircraft
                    and on each Engine stating:
<PAGE>
                        "This [Aircraft/Engine] is owned by
                        Aircraft 22120, Inc., is leased to
                        Vanguard Airlines, Inc. and is
                        subject to a mortgage and security
                        agreement in favor of FINOVA Capital
                        Corporation.  It may not be operated
                        by any other person without the prior
                        written consent of Aircraft 22120,
                        Inc. and FINOVA Capital Corporation."

              (e)   not create or permit to exist any Security
                    Interest upon the Aircraft, any Engine or any
                    Part, except Permitted Liens;

              (f)   not do or permit to be done anything which may
                    reasonably be expected to expose the Aircraft, any
                    Engine or any Part to penalty, forfeiture,
                    impounding, detention, appropriation, damage or
                    destruction and, without prejudice to the
                    foregoing, if any such penalty, forfeiture,
                    impounding, detention, appropriation, damage or
                    destruction occurs, give the Lessor notice and use
                    its best efforts to procure the immediate release
                    of the Aircraft, such Engine or such Part, as the
                    case may be;

              (g)   not abandon the Aircraft, the Engine or any Part;

              (h)   pay and discharge or cause to be paid and
                    discharged when due and payable or make adequate
                    provision by way of security or otherwise for all
                    debts, damages, claims and liabilities which have
                    given or might reasonably be expected to give rise
                    to a Security Interest (other than a Permitted
                    Lien) over or affecting the Aircraft, any Engine
                    or any Part; and

              (i)   not attempt, or hold itself out as having any
                    power, to sell, lease or otherwise dispose of the
                    Aircraft, any Engine or any Part other than as
                    expressly permitted by this Agreement.

         8.8  GENERAL

              Lessee will:

              (a)   not make any substantial change in the nature of
                    the business in which it is engaged if such
                    change, in the reasonable opinion of the Lessor or
                    Mortgagee, might reasonably be expected to have a
                    material adverse effect on the Lessee's
                    performance of its obligations under this
                    Agreement;

              (b)   preserve its corporate existence, and will not
                    merge or consolidate with any Person unless the
                    successor Person resulting from such merger or
                    consolidation (the "SUCCESSOR")
<PAGE>
                    (i)      is a Person incorporated, formed or
                             organized under the laws of a State of the
                             United States of America;

                    (ii)     shall have a net worth immediately after
                             such merger or consolidation of not less
                             than the Lessee's net worth immediately
                             prior thereto;

                    (iii)    shall be authorized under Applicable Law to
                             perform the Lessee's obligations under this
                             Agreement to the same extent as the Lessee;

                    (iv)     shall deliver to Lessor and Mortgagee an
                             agreement in form and substance reasonably
                             satisfactory to Lessor containing an
                             assumption by the Successor of Lessee's
                             representations and warranties under this
                             Agreement, together with the due and
                             punctual performance of all of Lessee's
                             obligations under this Agreement; and

                    (v)      shall deliver to Lessor and Mortgagee an
                             opinion of counsel reasonably satisfactory
                             in form and substance to Lessor and
                             Mortgagee covering the Operative Documents
                             and the agreement referred to in sub-clause
                             (iv) above and substantially in the form of
                             the legal opinion set forth in Exhibit_D.

         8.9  RECORDS

              The Lessee shall procure that accurate, complete and
              current records of all flights made by, and all
              maintenance carried out on, the Aircraft (including, in
              relation to each Engine or Part subsequently installed,
              before its installation) are kept in English, and shall
              keep the records in such manner as the Aviation
              Authority may from time to time require.  The records
              will form part of the Aircraft Documents.
<PAGE>
         8.10 REGISTRATION AND FILINGS

              Lessee shall:

              (a)   not do anything that might reasonably be expected
                    to adversely affect the registration of the
                    Aircraft with the Aviation Authority reflecting
                    (so far as permitted by Applicable Law) the
                    respective interests of the Lessor and Mortgagee;
                    and

              (b)   do all acts and things (including making any
                    filing or registration with the Aviation Authority
                    or any other Government Entity) and executing and
                    delivering all documents (including any amendment
                    of this Agreement) as may be required by the
                    Lessor following any modification of the Aircraft,
                    any Engine or any Part or the permanent
                    replacement of any Engine or Part in accordance
                    with this Agreement, so as to ensure that the
                    respective rights of the Lessor and Mortgagee
                    under this Agreement apply with the same effect as
                    before.

         8.11 MAINTENANCE AND REPAIR

              The Lessee shall:

              (a)   keep the Aircraft airworthy in all respects and in
                    good repair and condition, and all maintenance
                    will be carried out in accordance with the Agreed
                    Maintenance Program;

              (b)   advise the Lessor and Mortgagee in writing of all
                    material changes to the Agreed Maintenance
                    Program;

              (c)   maintain the Aircraft in accordance with the
                    Agreed Maintenance Program through Agreed
                    Maintenance Performers and perform (at the
                    respective intervals provided in the Agreed
                    Maintenance Program) all Major Checks, and before
                    performing any Major Check Lessee will consult
                    with Lessor as to the workscope for such Major
                    Check;

              (d)   maintain the Aircraft in accordance with FAR Part
                    121 and all other rules and regulations of the
                    Aviation Authority as are applicable to aircraft
                    of the same type as the Aircraft operated by
                    United States of America air carriers;

              (e)   without limiting the provisions of Clause 7.4,
                    comply with all mandatory inspection and
                    modification requirements, airworthiness
                    directives and similar requirements applicable to
                    the Aircraft, any Engine or Part having <PAGE> a
                    compliance date on or before 90 days after the
                    Expiry Date and that are required by the Aviation
                    Authority;

              (f)   comply with all alert service bulletins issued by
                    any manufacturer of the Aircraft, Engines or
                    Parts, and comply (including scheduling compliance
                    work and then performing such work on schedule)
                    with all other service bulletins issued by any
                    such manufacturer if and to the extent that the
                    Lessee brings or schedules to bring in compliance
                    at least one-half of the applicable aircraft it
                    operates (excluding for purposes of such
                    calculation aircraft acquired from unrelated third
                    parties that already comply with such other
                    service bulletins);

              (g)   comply with all Applicable Laws and the
                    regulations of the Aviation Authority and any
                    other aviation authorities with jurisdiction over
                    the Lessee or the Aircraft, any Engine or Part
                    that relate to the maintenance, condition, use or
                    operation of the Aircraft or require any
                    modification or alteration to the Aircraft, any
                    Engine or Part;

              (h)   maintain in good standing a current U.S. Standard
                    Transport Category Certificate of Airworthiness
                    for the Aircraft issued by the Aviation Authority
                    in accordance with FAR Part 21 except when the
                    Aircraft is undergoing maintenance, modification
                    or repair required or permitted by this Agreement,
                    and shall from time to time provide to the Lessor
                    a copy on request;

              (i)   if required by the Aviation Authority, maintain a
                    current certification as to maintenance issued by
                    or on behalf of the Aviation Authority in respect
                    of the Aircraft and shall from time to time
                    provide to the Lessor a copy on request;

              (j)   maintain the Engines with respect to overhaul
                    build standards and disc replacements at a level
                    which is consistent with the level applied by the
                    Lessee in relation to other engines of the same
                    type as the Engines in its fleet;

              (k)   maintain the Engines and the APU in an "on
                    condition" program as set forth in the respective
                    manufacturer's maintenance planning document;

              (l)   subject to Clause 11.2, procure promptly the
                    replacement of any Engine or Part which has become
                    time, cycle or calendar expired, lost, stolen,
                    seized, confiscated, destroyed, damaged beyond
                    repair, unserviceable or permanently rendered
                    unfit for use, with an engine or part complying
                    with the conditions set out in Clause 8.13(a); and
<PAGE>
              (m)   maintain the Airframe at all times in compliance
                    with the requirements of the Manufacturer's Aging
                    Aircraft Program, SID Program and CPCP and related
                    mandates of the Aviation Authority, with all
                    documentation necessary to assure and demonstrate
                    compliance becoming part of the Aircraft
                    Documents.

         8.12 REMOVAL OF ENGINES AND PARTS

              The Lessee will ensure that no Engine or Part installed
              on the Aircraft is at any time removed from the
              Aircraft other than:

              (a)   if replaced as expressly permitted by this
                    Agreement; or

              (b)   If the removal is of an obsolete item and is in
                    accordance with the Agreed Maintenance Program; or

              (c)   pursuant to, and in accordance with, Clause 8.15;
                    or

              (d)   (i)      during the course of maintaining,
                             servicing, repairing, overhauling or
                             testing that Engine or the Aircraft, as the
                             case may be; or

                    (ii)     as part of a normal engine or part rotation
                             program; or

                    (iii)    for the purpose of making such
                             modifications to the Engine or the
                             Aircraft, as the case may be, as are
                             permitted under this Agreement,

                    and then in each case only if it is reinstalled or
                    replaced by an engine or part complying with
                    Clause 8.13(a) as soon as practicable and in any
                    event no later than the Expiry Date.

         8.13 INSTALLATION OF ENGINES AND PARTS

              (a)   The Lessee will ensure that, except as permitted
                    by this Agreement, no engine or part is installed
                    on the Aircraft unless:

                    (i)      in the case of an engine, it is an engine
                             of the same model as, or an improved or
                             advanced version of the Engine it replaces
                             (provided, in the case of an improved or
                             advanced version, it can be installed and
                             operated on the Airframe without
                             modification of the Airframe or the engine,
                             whether or not the other installed Engine
                             is also such an improved or advanced
                             version), which has attached to it a
                             current "serviceable tag" issued by the
                             manufacturer or supplier <PAGE> indicating that
                             the engine is new, serviceable or
                             overhauled, and the Lessee shall retain all
                             such tags;

                    (ii)     in the case of a part, it is in as good
                             operating condition, is of the same
                             interchangeable modification status as the
                             replaced Part and has attached to it a
                             current "serviceable tag" issued by the
                             manufacturer or supplier indicating that
                             the part is new, serviceable or overhauled,
                             and the Lessee shall retain all such tags;

                    (iii)    in the case of a part, it has become and
                             remains the property of the Lessor free
                             from Security Interests and on installation
                             on the Aircraft will, without further act,
                             be subject to this Agreement and to the
                             Security Interest created by the Mortgage,
                             in which case title to the removed part
                             shall automatically become vested in Lessee
                             without further action or warranty on the
                             part of Lessor except that such Part shall
                             be free of Lessor Liens; and

                    (iv)     in each case, the Lessee has full details
                             as to its source and maintenance records.

              (b)   If no Event of Default has occurred which is
                    continuing, the Lessee will be entitled to install
                    any engine or part on the Aircraft by way of
                    replacement notwithstanding Clause 8.13(a) if:

                    (i)      there is not available to Lessee at the
                             time and in the place that engine or part
                             is required to be installed on the Aircraft
                             a replacement engine or part complying with
                             the requirements of Clause 8.13(a);

                    (ii)     it would result in an unreasonable
                             disruption of the operation of the Aircraft
                             or the business of Lessee to ground the
                             Aircraft until an engine or part complying
                             with Clause 8.13(a) becomes available for
                             installation on the Aircraft; and

                    (iii)    as soon as practicable after installation
                             of the same on the Aircraft but, in any
                             event, no later than the earlier of (1) 90
                             days after such installation and (2) the
                             Expiry Date, the Lessee removes any such
                             engine or part and replaces it with the
                             Engine or Part replaced by it or by an
                             engine or part complying with
                             Clause_8.13(a).

              (c)   If no Default has occurred which is continuing,
                    the Lessee will be entitled to install Lessee
                    Installed Parts on the Airframe by way of
                    replacement notwithstanding Clause 8.13(a)(iii) so
                    long as:
<PAGE>
                    (i)      the terms of any lease, conditional sale
                             agreement or security agreement, as the
                             case may be, covering such Lessee Installed
                             Part will not have the effect of
                             prejudicing the title and interest of the
                             Lessor in and to the Aircraft (including
                             its Engines and Parts) or the interest of
                             Mortgagee in respect thereof under the
                             Mortgage;

                    (ii)     the secured party, lessor or conditional
                             vendor, as the case may be, of such Lessee
                             Installed Part has confirmed and
                             acknowledged in writing (which confirmation
                             and acknowledgment may be contained in the
                             lease, conditional sale agreement or
                             security agreement covering such Lessee
                             Installed Part) to the Lessor and Mortgagee
                             that it will recognize the respective
                             rights, title and interest of the Lessor
                             and Mortgagee in and to the Aircraft
                             (including its Engines and Parts) and that
                             it will not seek to exercise any rights
                             whatever in relation thereto; and

                    (iii)    before the Expiry Date the Lessee removes
                             any such Lessee Installed Part and replaces
                             it with the Part replaced by it or by
                             another part, in either case complying with
                             Clause 8.13(a).

              (d)   Lessor agrees, for the benefit of Lessee and any
                    mortgagee or holder of any other Security Interest
                    in any engine (other than an Engine) or Lessee
                    Installed Part owned by the Lessee, any lessor of
                    any engine (other than an Engine leased to the
                    Lessee) or Lessee Installed Part and any
                    conditional vendor of any engine (other than an
                    Engine purchased by the Lessee subject to a
                    conditional sale agreement or any other security
                    agreement) or Lessee Installed Part, that no
                    right, title to or interest in any such engine or
                    Lessee Installed Part shall be exercised or
                    asserted by the Lessor and the Lessor acknowledges
                    and confirms that it will not acquire any right,
                    title or interest to or in any such engine or
                    Lessee Installed Part as a result of its
                    installation on the Airframe.

         8.14 NON-INSTALLED ENGINES AND PARTS

              (a)   The Lessee shall ensure that any Engine or Part
                    which is not installed on the Airframe (or any
                    other airframe as permitted by this Agreement) is,
                    except as expressly permitted by this Agreement,
                    properly and safely stored and kept free from
                    Security Interests (other than Permitted Liens),
                    with insurance thereon complying with the
                    requirements of this Agreement.

              (b)   Notwithstanding Clause 8.14(a), the Lessee shall
                    be permitted, if no Default has occurred and is
                    continuing, to install any Engine on an airframe
                    and any Part on an airframe or engine:
<PAGE>
                    (i)      owned and operated by the Lessee free from
                             Security Interests, other than Permitted
                             Liens;

                    (ii)     leased or hired to the Lessee pursuant to a
                             lease or conditional sale agreement on a
                             long-term basis and on terms whereby the
                             Lessee has full operational control of that
                             aircraft or engine; or

                    (iii)    acquired or financed by the Lessee and
                             operated by the Lessee on terms that
                             ownership of that aircraft or engine, as
                             the case may be, pursuant to a lease,
                             conditional sale agreement or Security
                             Interest is vested in or held by any other
                             Person;

                    provided that in the case of (ii) and (iii):

                    (1) the terms of any such lease, conditional
                        sale agreement or Security Interest will
                        not have the effect of prejudicing the
                        title and interest of the Lessor in and to
                        that Engine or Part or the interest of
                        Mortgagee in respect thereof under the
                        Mortgage; and

                    (2) the lessor under such lease, the seller
                        under such conditional sale agreement or
                        the secured party of such Security
                        Interest, as the case may be, has confirmed
                        and acknowledged in writing (which such
                        confirmation and acknowledgment may be
                        contained in the lease, conditional sale
                        agreement or document creating the Security
                        Interest covering that Engine or Part) to
                        the Lessor and Mortgagee, in form and
                        substance satisfactory to the Lessor, that
                        it will recognize the respective rights,
                        title and interest of the Lessor and
                        Mortgagee to and in that Engine or Part and
                        that it will not seek to exercise any
                        rights whatever in relation thereto.

         8.15 POOLING OF ENGINES AND PARTS

              The Lessee will not enter into nor permit any pooling
              agreement or arrangement in respect of an Engine or
              Part without the prior written consent of the Lessor
              and Mortgagee, such consent not to be unreasonably
              withheld in any case where an Engine or Part is leased,
              let on hire or otherwise made available by the Lessee
              (on terms conferring no more than a contractual right
              in personam against the Lessee and not a right in rem
              against such Engine or Part) pursuant to a pooling
              agreement to which the Lessee is a party and:

              (a)   the other parties to which are reputable, solvent
                    commercial air carriers or the manufacturers or
                    suppliers of the Engine or Part (or other
                    reputable, solvent organizations whose business
                    includes the administration of and participation
                    in such pooling agreements or arrangements); and
<PAGE>
              (b)   which does not contemplate the transfer of title
                    to the pooled Engine or Part; and

              (c)   either provides that Lessor (or Mortgagee, as the
                    case may be) will be sole loss payee in respect of
                    any loss or damage to the Engine or Part, or
                    provides for Lessor to acquire title to a
                    substitute engine or part satisfying the
                    conditions set out in Clause_8.13(a) if the Engine
                    or Part is destroyed.

         8.16 EQUIPMENT CHANGES

              (a)   The Lessee will not make any modification or
                    addition to the Aircraft (each an "EQUIPMENT
                    CHANGE"), except for an Equipment Change that:

                    (i)      is expressly permitted by any other
                             provision of this Agreement, or

                    (ii)     has the prior written approval of the
                             Lessor and Mortgagee (which approval shall
                             not be unreasonably withheld provided the
                             proposed Equipment Change will not, in the
                             reasonable opinion of the Lessor and
                             Mortgagee, diminish the value, utility,
                             condition or airworthiness of the
                             Aircraft), except for painting or minor
                             cabin interior modifications not affecting
                             the structure of the Airframe, any or all
                             of which may be made without such prior
                             approval.

              (b)   So long as no Event of Default has occurred and is
                    continuing, the Lessee may remove any Equipment
                    Change if it can be removed from the Aircraft
                    without diminishing or impairing the value,
                    utility, condition or airworthiness of the
                    Aircraft.

         8.17 TITLE TO ENGINES AND PARTS

              (a)   Title to any engine installed on the Aircraft,
                    whether by way of replacement as the result of an
                    Equipment Change or otherwise (except as provided
                    for replacement engines pursuant to Clause 11.2
                    below) will not vest in Lessor.

              (b)   Title to all Parts installed on the Aircraft,
                    whether by way of replacement as the result of an
                    Equipment Change or otherwise (except those
                    installed pursuant to Clause_8.13(b) or Clause
                    8.15) will on installation, without further act,
                    vest in the Lessor subject to this Agreement free
                    and clear of all Security Interests other than the
                    Mortgage.  The Lessee will at its own expense take
                    all such steps and execute, and procure the
                    execution of, all such instruments that are
                    necessary to ensure that title so passes to the
                    Lessor and is subject to the Security Interest
                    created by the Mortgage <PAGE> according to all
                    Applicable Laws.  At any time when requested by
                    the Lessor, the Lessee will provide evidence to
                    the Lessor's reasonable satisfaction (including
                    the provision, if required, to the Lessor of one
                    of more legal opinions) that title has so passed
                    to the Lessor and is subject to the Security
                    Interest created by the Mortgage.

              (c)   The Lessor may require the Lessee to remove any
                    Equipment Change other than an Equipment Change
                    permitted under Clause 8.16(a), and to restore the
                    Aircraft to its condition prior to that Equipment
                    Change.

              (d)   Any Engine at any time removed from the Aircraft
                    will remain the property of the Lessor until, in
                    the event of an Engine Loss, a replacement has
                    been made in accordance with Clause 11.2 and title
                    to that replacement has passed, according to
                    Applicable Laws and pursuant to Clause 11.2, to
                    the Lessor subject to this Agreement free of all
                    Security Interests, whereupon title to the removed
                    Engine will, provided no Default has occurred and
                    is continuing, pass to the Lessee free of Lessor
                    Liens.  Except as referred to in Clause 8.16(b),
                    any Part at any time removed from the Aircraft
                    will remain the property of the Lessor until a
                    replacement has been made in accordance with this
                    Agreement and until title to that replacement has
                    passed, according to Clause 8.17(b) and Applicable
                    Laws, to the Lessor subject to this Agreement free
                    of all Security Interests, whereupon title to the
                    removed Part will, provided no Default has
                    occurred and is continuing, pass to the Lessee
                    free of Lessor Liens.

         8.18 THIRD PARTIES

              The Lessee shall procure that no Person having
              possession of the Aircraft during the Term will act in
              any manner inconsistent with the Lessee's obligations
              under this Agreement and that all such Persons shall
              comply with those obligations as if references to
              "Lessee" included a separate reference to those
              Persons.

         8.19 NON-DISCRIMINATION

              (a)   Lessee shall not discriminate against the Aircraft
                    in its use, maintenance or operation of the
                    Aircraft compared to other similar Aircraft owned
                    or operated by Lessee, and Lessee shall service,
                    repair, maintain and overhaul the Aircraft so as
                    to keep the Aircraft maintained in the same manner
                    and with the same care as used by Lessee with
                    similar aircraft owned or operated by Lessee.

              (b)   Subject to a sublease permitted pursuant to Clause
                    8.5, Lessee shall continue to use the Aircraft in
                    its regular commercial passenger operations <PAGE> until
                    delivery to the Return Location immediately prior
                    to the Final Inspection.

              (c)   Lessee further agrees that normal progressive
                    maintenance will continue to be performed on the
                    Aircraft throughout the Term, and no unusual
                    maintenance procedures or cessation of maintenance
                    shall occur during the one year period prior to
                    the Expiry Date.

9.       INSURANCE

         9.1  INSURANCES

              The Lessee will maintain in full force and effect
              during the Term insurances in respect of the Aircraft
              in accordance with this Clause 9 and Schedule 5 (the
              "INSURANCES") through such brokers and with such
              insurers and having such deductibles and being subject
              to such exclusions as are usual and customary in the
              worldwide aviation insurance marketplace for major
              international air carriers operating similar equipment
              who are similarly situated with Lessee.  The Insurances
              will be effected either:

              (a)   on a direct basis with insurers of recognized
                    standing who normally participate in aviation
                    insurances in the leading international insurance
                    markets and led by reputable underwriters approved
                    by Lessor and the Mortgagee, or

              (b)   with a single insurer or group of insurers
                    approved by Lessor and the Mortgagee who does not
                    retain the risk, but effects substantial
                    reinsurance in the leading international insurance
                    markets and through brokers of recognized standing
                    and acceptable to Lessor and the Mortgagee for a
                    percentage acceptable to the Lessor and the
                    Mortgagee of all risks insured,

              and Lessor acknowledges and confirms that the current
              deductibles and exclusions, together with the existing
              brokers and insurers, in respect of the insurances
              maintained by Lessee on the date of this Agreement are
              acceptable to it and Mortgagee.

         9.2  REQUIREMENTS
<PAGE>
              The Lessor's current requirements as to Insurances are
              as specified in this Clause_9 and in Part 1 of Schedule
              5.  Except for the amount of the Agreed Value, the
              Minimum Liability Coverage and the deductible under
              Lessee's hull and war risk insurance policies, the
              Lessor may from time to time stipulate such other
              requirements for the Insurances as the Lessor
              reasonably considers necessary to ensure that the scope
              and level of cover is maintained in accordance with the
              then prevailing industry practice in relation to
              aircraft of the same type as the Aircraft and in
              relation to operators of similar standing to the
              Lessee.  In the event that it proposes any such
              stipulation, Lessor shall notify the Lessee accordingly
              and the Lessor and/or its brokers will then consult in
              good faith with the Lessee and the Lessee's approved
              independent insurance brokers with regard to such
              proposed stipulation.  If, following the consultation,
              the Lessee's independent insurance brokers confirm that
              the proposed stipulation is in accordance with
              prevailing industry practice for airlines similarly
              situated to Lessee, then Lessee shall comply with the
              proposed requirements at the time of its next renewal
              of Insurances.

         9.3  INSURANCE COVENANTS

              The Lessee shall:

              (a)   ensure that all legal requirements as to insurance
                    of the Aircraft, any Engine or any Part that may
                    from time to time be imposed by the laws of the
                    State of Registration or any jurisdiction to, from
                    or over which the Aircraft may be flown, in so far
                    as they affect or concern the operation of the
                    Aircraft, are complied with and, in particular,
                    those requirements compliance with which is
                    necessary to ensure that:

                    (i)      the Aircraft does not become subject to
                             detention or forfeiture;

                    (ii)     the Insurances remain valid and in full
                             force and effect; and

                    (iii)    the interests of the Indemnitees in the
                             Insurances and the Aircraft or any Part are
                             not thereby prejudiced;

              (b)   not use, cause or permit the Aircraft, any Engine
                    or any Part to be used for any purpose or in any
                    manner not covered by the Insurances or outside
                    any geographical limit imposed by the Insurances;

              (c)   comply with the terms and conditions of each
                    policy of the Insurances and not do, consent or
                    agree to any act or omission that:

                    (i)      invalidates or may reasonably be expected
                             to invalidate the Insurances;
<PAGE>
                    (ii)     renders or may reasonably be expected to
                             render void or voidable the whole or any
                             part of any of the Insurances; or

                    (iii)    brings any particular liability within the
                             scope of an exclusion or exception to the
                             Insurances;

              (d)   not take out without the prior written approval of
                    the Lessor any insurance in respect of the
                    Aircraft other than those of the type required
                    under this Agreement unless relating solely to
                    hull total loss, business interruption, engine
                    break-down, profit commission and deductible risk
                    or which would otherwise have no adverse impact on
                    the Insurances required to be carried by Lessee
                    under this Agreement;

              (e)   commence renewal procedures at least 30 days prior
                    to the expiration of any of the Insurances and
                    provide to the Lessor and Mortgagee:

                    (i)      if requested by the Lessor, a written
                             status report of renewal negotiations 14
                             days prior to each expiration date;

                    (ii)     telefaxed confirmation of completion of
                             renewal prior to each expiration date; and

                    (iii)    a certificate of insurance and broker's
                             letter of undertaking substantially in the
                             form set out in Parts 2 and 3 of Schedule
                             5, detailing the coverage and confirming
                             the insurers' agreement to the specified
                             insurance requirements of this Agreement
                             within seven days after each renewal date;

              (f)   provide to the Lessor and Mortgagee copies of
                    those documents evidencing the Insurances which
                    the Lessor and Mortgagee may reasonably request;

              (g)   on request, provide to the Lessor and Mortgagee
                    evidence that the Insurance premiums have been
                    paid;

              (h)   not make any modification or alteration to the
                    Insurances material and adverse to the interests
                    of any of the Indemnitees;

              (i)   be responsible for any deductible under the
                    Insurances; and

              (j)   provide any other insurance related information,
                    or assistance, in respect of the Insurances as the
                    Lessor may reasonably request.
<PAGE>
         9.4  FAILURE TO INSURE

              If the Lessee fails to maintain the Insurances in
              compliance with this Agreement, each of the Indemnitees
              will be entitled but not obligated (without prejudice
              to any other rights of the Lessor under this
              Agreement):

              (a)   to pay the premiums due or to effect and maintain
                    insurances satisfactory to it or otherwise remedy
                    the Lessee's failure in such manner (including to
                    effect and maintain an "owner's interest" policy)
                    as it considers appropriate, and any sums so
                    expended by it will become immediately due and
                    payable by the Lessee to the Lessor on demand
                    (such demand being made as soon as reasonably
                    practicable following the incurring of such
                    expenditure), together with interest thereon at
                    the Default Rate from the date of expenditure by
                    it up to the date of reimbursement by the Lessee
                    (before and after any judgment); and

              (b)   at any time while such failure is continuing to
                    require the Aircraft to remain at any airport or
                    to proceed to and remain at any airport designated
                    by it until the failure is remedied to its
                    reasonable satisfaction.

         9.5  CONTINUING INDEMNITY

              (a)   Lessor may require Lessee to effect and to
                    maintain insurance after the Expiry Date with
                    respect to its liability under the indemnities in
                    Clause 10 for such period as the Lessor may
                    reasonably require (but in any event not more than
                    three years) providing for each Indemnitee to be
                    named as additional insured.

              (b)   Lessee's obligation under this Clause 9.5 shall
                    not be affected by the Lessee ceasing to be lessee
                    of the Aircraft or any of the Indemnitees ceasing
                    to have any interest in respect of the Aircraft,
                    and upon a Transfer pursuant to Clause 14.2 Lessee
                    shall continue to name the Indemnitees as
                    additional insureds under the Insurance policies
                    covered by Clause 1(d) of Schedule 5 for three
                    years after the Transfer date.

         9.6  APPLICATION OF INSURANCE PROCEEDS

              As between Lessor and Lessee:

              (a)   All insurance payments, up to the Agreed Value,
                    received as the result of a Total Loss occurring
                    during the Term will be paid to Mortgagee.

              (b)   All insurance proceeds in respect of any damage or
                    loss to the Aircraft, any Engine or any Part
                    occurring during the Term not constituting a Total
<PAGE>
                    Loss and involving insurance proceeds in excess of
                    the Damage Notification Threshold will be paid to
                    Mortgagee and applied in payment (or to reimburse
                    Lessee) for repairs or replacement property upon
                    Lessor and Mortgagee being reasonably satisfied
                    that the repairs or replacement have been effected
                    in accordance with this Agreement.  Insurance
                    proceeds in amounts less than the Damage
                    Notification Threshold may be paid by the insurer
                    directly to the Lessee.  Any balance remaining may
                    be retained by the Lessee.

              (c)   All insurance proceeds in respect of third party
                    liability will be paid to the relevant third
                    party.

              (d)   Notwithstanding Clauses 9.6(a) and (b), if at the
                    time of the payment of any such insurance proceeds
                    a Default has occurred and is continuing, all such
                    proceeds will be paid to or retained by Mortgagee
                    to be applied toward payment of any amounts that
                    may be or become payable by the Lessee in such
                    order as the Lessor and Mortgagee see fit or as
                    the Lessor and Mortgagee may elect.  In the event
                    that the Lessee remedies any such Default to the
                    reasonable satisfaction of Lessor, then Lessor
                    shall procure that all such insurance proceeds
                    then held by Mortgagee in excess of the amounts
                    (if any) applied by Lessor in accordance with this
                    sub-clause (d) shall be paid promptly to Lessee.

10.      INDEMNITY

         10.1 GENERAL

              The Lessee shall defend, indemnify and hold harmless
              the Indemnitees from and against any and all claims,
              proceedings, losses, liabilities, suits, judgments,
              costs, expenses, penalties or fines (each a "CLAIM")
              regardless of when the same is made or incurred,
              whether during or after the Term (but not before):

              (a)   that may at any time be suffered or incurred
                    directly or indirectly as a result of or connected
                    with possession, delivery, performance,
                    management, registration, control, maintenance,
                    condition, service, repair, overhaul, leasing,
                    subleasing, use, operation or return of the
                    Aircraft, any Engine or Part (either in the air or
                    on the ground) whether or not the Claim may be
                    attributable to any defect in the Aircraft, any
                    Engine or any Part or to its design, testing, use
                    or otherwise, and regardless of when the same
                    arises or whether it arises out of or is
                    attributable to any act or omission, negligent or
                    otherwise, of any Indemnitee;

              (b)   that arise out of any act or omission that
                    invalidates or that renders voidable any of the
                    Insurances;
<PAGE>
              (c)   that may at any time be suffered or incurred as a
                    consequence of any design, article or material in
                    the Aircraft, any Engine or any Part or its
                    operation or use constituting an infringement of
                    patent, copyright, trademark, design or other
                    proprietary right or a breach of any obligation of
                    confidentiality owed to any Person,

              but excluding any Claim to the extent that:

                    (1) it arises directly as a result of the
                        wilful misconduct or gross negligence of an
                        Indemnitee;

                    (2) it arises directly as a result of a breach
                        by an Indemnitee of its express obligations
                        under any Operative Document or as a result
                        of a representation or warranty given by an
                        Indemnitee in any Operative Document not
                        being true and correct at the date when, or
                        when deemed to have been, given or made;

                    (3) it constitutes or is attributable to a
                        Non-Indemnified Tax or Lessor Lien;

                    (4) it represents or is attributable to a Tax
                        or loss of tax benefits (the Lessee's
                        liabilities for which, to the extent
                        thereof, are set out in Clauses 5.7, 5.8
                        and 5.10);

                    (5) it constitutes or is attributable to a cost
                        or expense that is required to be borne by
                        the Lessor in accordance with another
                        provision of this Agreement;

                    (6) it results from any disposition of all or
                        any part of an Indemnitee's rights, title
                        or interest in or to the Aircraft or under
                        any Operative Document, unless such
                        disposition occurs as a consequence of an
                        Event of Default;

                    (7) it is attributable to an event occurring
                        after the Term unless the Claim results
                        from or arises out of an act or omission by
                        the Lessee, or any circumstance existing,
                        during the Term; or

                    (8) it is brought after the Term and relates to
                        a claimed patent infringement by the
                        Manufacturer occurring during the Term.

         10.2 MITIGATION
<PAGE>
              (a)   The Lessor agrees that it shall, as soon as
                    reasonably practicable after it becomes aware of
                    any circumstances that would, or would reasonably
                    be expected to, become the subject of a claim for
                    indemnification pursuant to Clause 10.1, notify
                    the Lessee in writing accordingly.  Lessor (and
                    any other Indemnitee seeking indemnification, as
                    the case may be) and Lessee shall then consult
                    with one another in good faith in order to
                    determine what action (if any) may reasonably be
                    taken to avoid or mitigate such Claim.  The Lessee
                    shall have the right to take all reasonable action
                    (on behalf and, if necessary, in the name of the
                    Lessor or such other Indemnitee) in order to
                    resist, defend or settle (provided such settlement
                    is accompanied by payment) any claims by third
                    parties giving rise to such Claim, provided always
                    that the Lessee shall not be entitled to take any
                    such action unless adequate provision, reasonably
                    satisfactory to the Lessor and such other
                    Indemnitee, shall have been made in respect of the
                    third party claim and the costs thereof.  The
                    Lessee or, if the Claim is covered by Lessee's
                    Insurances, the Lessee's insurers shall be
                    entitled to select any counsel to represent it or
                    them, the Lessor and such other Indemnitee in
                    connection with any such action, subject in the
                    case of Lessee to the approval of the Lessor and
                    such other Indemnitee (such approval not to be
                    unreasonably withheld) and any action taken by the
                    Lessee shall be on a full indemnity basis in
                    respect of the Lessor and such other Indemnitee.

              (b)   Any sums paid by the Lessee to the Lessor or any
                    Indemnitee in respect of any Claim pursuant to
                    Clause 10.1 shall be paid subject to the condition
                    that, in the event that the Lessor or such
                    Indemnitee is subsequently reimbursed in respect
                    of that Claim by any other Person, the Lessor or
                    such Indemnitee shall, provided no Default shall
                    have occurred and be continuing, promptly pay to
                    the Lessee an amount equal to the sum paid to it
                    by the Lessee, including any interest on such
                    amount to the extent attributable thereto and
                    received by the Lessor or such Indemnitee, less
                    any Tax payable by the Lessor or such Indemnitee
                    in respect of such reimbursement (net of any tax
                    benefit derived from the Claim or the
                    reimbursement of Lessee by Lessor).

         10.3 DURATION

              The indemnities contained in this Agreement will
              survive and continue in full force after the Expiry
              Date.
<PAGE>
11.      EVENTS OF LOSS

         11.1 TOTAL LOSS

              (a)   PRE-DELIVERY AIRFRAME LOSS:  If a Total Loss
                    occurs prior to Delivery, this Agreement will
                    immediately terminate and, except as expressly
                    stated in this Agreement, neither party will have
                    any further obligation or liability under this
                    Agreement except that the Lessor will rebate to
                    the Lessee the Security Deposit (if theretofore
                    paid pursuant to Clause 5.1) or, as the case may
                    be, return the Letter of Credit to the Lessee.

              (b)   POST-DELIVERY AIRFRAME LOSS:  If a Total Loss
                    occurs after Delivery, the Lessee will pay the
                    Agreed Value to Mortgagee on the earlier of
                    (i) the date of receipt of the insurance proceeds
                    payable as a result of the Total Loss, or (ii) the
                    60th day after the Total Loss Date (the
                    "SETTLEMENT DATE"), unless the Aircraft is
                    restored to the Lessor or the Lessee within that
                    period (or, in the case of a Total Loss coming
                    within paragraph (c) of the definition of Total
                    Loss and involving the loss of the Lessor's title
                    to the Aircraft, if both the Aircraft and the
                    Lessor's title thereto are restored to Lessor or,
                    in the case of the Aircraft, to Lessee and
                    Mortgagee's rights under the Mortgage are fully
                    restored).  The receipt by Mortgagee of the
                    insurance proceeds in respect of the Total Loss on
                    or prior to the Settlement Date shall discharge
                    the Lessee from its obligation to pay the Agreed
                    Value to the Lessor pursuant to this
                    Clause_11.1(b), provided such proceeds are not
                    less than the Agreed Value.  In the event that the
                    insurance proceeds are paid initially to the
                    Lessee and not to Mortgagee, they may be retained
                    by the Lessee if the Lessee shall have paid the
                    Agreed Value to Mortgagee, otherwise the Lessee
                    shall pay the Agreed Value to Mortgagee not later
                    than the next Business Day following receipt by
                    the Lessee of such proceeds.  In the event that
                    the Lessee pays the Agreed Value to the Lessor or
                    Mortgagee in accordance with this Clause_11.1(b),
                    the Lessor shall promptly assign to the Lessee its
                    rights under the Insurances to receive the
                    insurance proceeds in respect of the Total Loss to
                    the extent that such proceeds shall not have been
                    paid to the Lessee.  Subject to the rights of any
                    insurers or other third parties, upon irrevocable
                    payment in full to the Lessor or Mortgagee of that
                    amount and all other amounts that may be or become
                    payable to the Lessor under this Agreement, the
                    Lessor shall:

                    (i)      without recourse or warranty (except as to
                             the absence of Lessor Liens), and without
                             further act, be deemed to have transferred
                             to the Lessee all of the Lessor's rights to
                             any Engines or Parts not installed when the
                             Total Loss occurred, all on an "as-is where
                             is" basis, and shall, at the Lessee's
                             expense, execute and deliver such <PAGE> bills of
                             sale and other documents and instruments as
                             the Lessee may reasonably request to
                             evidence (on the public record or
                             otherwise) the transfer and the vesting of
                             the Lessor's rights in such Engines and
                             Parts in the Lessee, free and clear of all
                             rights of the Lessor and any Lessor Liens;
                             and

                    (ii)     pay to Lessee, as a rebate of prepaid Basic
                             Rent, and amount equal to the product of
                             (1) one month's Basic Rent multiplied by
                             (2) a fraction the numerator of which is
                             the number of days remaining in the then
                             current Rental Period and the denominator
                             of which is the number of days in the then
                             current Rental Period.

         11.2 ENGINE LOSS

              Upon the occurrence of an Engine Loss (including, for
              the avoidance of doubt, at a time when the Engine is
              not installed on the Airframe) in circumstances in
              which there has not also occurred a Total Loss, the
              Lessee shall give the Lessor and Mortgagee written
              notice promptly upon becoming aware of the same and
              shall (unless the Lessor has received the insurance
              proceeds relating to such Engine Loss), within 60 days
              after the Engine Loss Date, convey or cause to be
              conveyed to the Lessor, as replacement for such Engine,
              title to a replacement engine that is in the same or
              better operating condition, has the same or greater
              value and utility as the lost Engine and that complies
              with the conditions set out in Clause 8.13(a).  The
              Lessee will at its own expense take all such steps and
              execute, and procure the execution of, a full warranty
              bill of sale covering such replacement engine, a
              supplement to this Agreement adding such replacement
              engine to the Leased Property and all such other
              agreements and instruments that are necessary to ensure
              that title to such Engine passes to the Lessor and is
              subject to the Security Interest created by the
              Mortgage and such replacement engine becomes an
              "Engine", all according to Applicable Laws.  At any
              time when requested by the Lessor, the Lessee will
              provide evidence to the Lessor's reasonable
              satisfaction (including the provision, if required, to
              the Lessor of one of more legal opinions) that title
              has so passed to the Lessor and is subject to the
              Security Interest created by the Mortgage.  Upon
              compliance with the foregoing title transfer
              provisions, the leasing of the replaced Engine the
              subject of the Engine Loss shall cease and title to
              such replaced Engine shall (subject to any salvage
              rights of insurers) vest in the Lessee free of Lessor
              Liens.  If the Lessor or Mortgagee subsequently
              receives any insurance proceeds relating to such Engine
              Loss, the Lessor shall promptly remit such proceeds or
              cause such proceeds to be remitted to the Lessee.  No
              Engine Loss with respect to any Engine that is replaced
              in accordance with the provisions of this Clause 11.2
              shall result in any increase or decrease in Basic Rent,
              Additional Rent or the Agreed Value.

         11.3 REQUISITION
<PAGE>
              During any requisition for use or hire of the Aircraft,
              any Engine or Part that does not constitute a Total
              Loss:

              (a)   the Basic Rent, Additional Rent and Supplemental
                    Rent payable under this Agreement will not be
                    suspended or abated either in whole or in part,
                    and the Lessee will not be released from any of
                    its other obligations under this Agreement (other
                    than operational obligations with which the Lessee
                    is unable to comply solely by virtue of the
                    requisition); and

              (b)   so long as no Default has occurred and is
                    continuing, the Lessee will be entitled to any
                    compensation payable by the requisitioning
                    authority in respect of the Term.  The Lessee
                    will, as soon as practicable after the end of any
                    such requisition (with the Term being extended if
                    and to the extent that the period of requisition
                    continues beyond the Scheduled Expiry Date), cause
                    the Aircraft to be put into the condition required
                    by this Agreement.  The Lessor will be entitled to
                    all compensation payable by the requisitioning
                    authority in respect of any change in the
                    structure, state or condition of the Aircraft
                    arising during the period of requisition, and the
                    Lessor will apply such compensation in reimbursing
                    the Lessee for the cost of complying with its
                    obligations under this Agreement in respect of any
                    such change; provided, that, if any Default has
                    occurred and is continuing, the Lessor may apply
                    the compensation in or towards settlement of any
                    amounts owing by the Lessee under this Agreement.
                    All such sums shall be held by Mortgagee.

12.      RETURN OF AIRCRAFT

         12.1 REDELIVERY

              On the Expiry Date or termination of the leasing of the
              Aircraft under this Agreement, the Lessee shall, unless
              a Total Loss has occurred, at its expense, redeliver
              the Aircraft and Aircraft Documents to the Lessor at
              the Redelivery Location in a condition complying with
              this Clause 12 and Schedule 4, free and clear of all
              Security Interests and Permitted Liens (other than
              Lessor Liens).

         12.2 FINAL CHECKS

              Immediately prior to return of the Aircraft, Lessee
              shall perform the following:

              (a)   Lessee shall perform (or have performed by an
                    Agreed Maintenance Performer) a C-Check.  At
                    return, the Airframe will have zero Flight Hours
                    since such C-Check, except for the acceptance
                    flights and the ferry flight to the Redelivery
                    Location.  Lessee will also weigh the Aircraft. <PAGE>
                    Any discrepancies revealed during such inspection
                    will be corrected in accordance with
                    Manufacturer's maintenance and repair manuals or
                    FAA-approved data.  Lessee shall also perform
                    during such check, to the extent it is able, any
                    other work reasonably required by Lessor (and not
                    otherwise required under this Agreement) so long
                    as such work does not prevent Lessee from
                    returning the Aircraft on the Expiry Date or
                    extend the time the Aircraft is in maintenance,
                    and Lessor shall reimburse Lessee for the Actual
                    Cost of such work at Lessee's preferred customer
                    rates (if the work is performed by Lessee) or at
                    the third party rates charged Lessee.

              (b)   Lessee shall perform (or have performed by an
                    Agreed Maintenance Performer) an internal and
                    external corrosion inspection in accordance with
                    the CPCP so that CPCP inspection items will be
                    free of requirements for a minimum of two years
                    after the Expiry Date, and any discrepancies will
                    be addressed in accordance with the
                    recommendations of the Manufacturer and the SRM.
                    In addition, all inspected areas will be properly
                    treated with corrosion inhibitor as recommended by
                    Manufacturer.

              (c)   If Lessee performed any structural inspections or
                    tasks on a sampling basis on aircraft similar to
                    the Aircraft but did not perform such inspections
                    on the Aircraft, such work shall also be performed
                    on the Aircraft.

              (d)   Lessor shall perform, at Lessor's expense, a
                    videotape borescope inspection of all accessible
                    gas path sections of each Engine (accessible
                    whether by borescope port or other means),
                    including the low pressure and high pressure
                    compressors and the turbine area of such Engine.
                    All items beyond the Engine Manufacturer's
                    maintenance manual limits will be rectified at
                    Lessee's sole cost and expense.  No Engine will be
                    "on watch" for any reason requiring special or out
                    of sequence inspection.

              (e)   In accordance with the Engine Manufacturer's MPD,
                    Lessee shall perform a maximum power assurance run
                    and condition, acceleration and bleed valve
                    scheduling checks on each Engine other than the
                    Spare Engine.  Lessee will record and evaluate
                    each such Engine's performance, with Lessor and/or
                    its representatives entitled to be present.  Each
                    such Engine shall pass such tests without
                    operational limitations throughout the operating
                    envelope in accordance with the Engine
                    Manufacturer's maintenance manual.

              (f)   Lessee shall perform a videotape borescope
                    inspection of the APU, and all items beyond the
                    manufacturer's recommended limits will be
                    rectified at Lessee's sole cost and expense.
<PAGE>
              (g)   Lessee shall have removed and blended all external
                    and interior markings.

              (h)   If any historical and technical records, condition
                    trend monitoring data, power assurance runs or
                    borescope inspection indicate an abnormal
                    acceleration in the rate of performance
                    deterioration or oil consumption in any Engine or
                    the APU, Lessee shall correct such conditions
                    causing the accelerated rate of deterioration.

         12.3 FINAL INSPECTION

              (a)   During the C-check prior to redelivery of the
                    Aircraft, the Lessee will make the Aircraft and
                    Aircraft Documents available to representatives of
                    Lessor and the Financing Parties for inspection
                    ("FINAL INSPECTION") in order to verify that the
                    condition of the Aircraft complies with this
                    Agreement.  The Final Inspection will be long
                    enough to permit the representatives of Lessor and
                    the Financing Parties to inspect, at their own
                    cost, the Aircraft Documents, the Aircraft and any
                    uninstalled Parts and Engines.  The
                    representatives of Lessor and the Financing
                    Parties shall attend and conduct the Final
                    Inspection diligently and, without limiting their
                    right to conduct the full Final Inspection
                    permitted by this Agreement, will cooperate with
                    Lessee in order to complete the Final Inspection
                    as soon as reasonably practical.

              (b)   Lessor and the Financing Parties shall also be
                    entitled, as part of the Final Inspection, to
                    require Lessee to perform an acceptance flight of
                    up to two hours at Lessee's cost (with up to four
                    representatives of Lessor and the Financing
                    Parties on-board as observers) and such further
                    acceptance flights as may be necessary in the
                    event that the first or subsequent flights do not
                    confirm that the Aircraft complies with the
                    redelivery requirements of this Agreement.

              (c)   At the request of Lessor, Lessee shall perform
                    "bridging" maintenance procedures for the purpose
                    of standardizing the Aircraft to the maintenance
                    program of any subsequent operator of the
                    Aircraft; provided, that Lessor shall pay to
                    Lessee the Actual Cost of all "bridging"
                    procedures that are in excess of or not in lieu of
                    the "C"_Check to be performed pursuant to
                    Clause_12.2 and Schedule 4.

         12.4 NON-COMPLIANCE

              To the extent that, at the time of Final Inspection,
              the condition of the Aircraft does not comply with this
              Agreement, the Lessee shall immediately rectify the
              non-compliance and, to the extent that the
              non-compliance extends beyond the Expiry Date, the Term
              will be automatically extended until the non-compliance <PAGE>
              has been rectified.  If, on any date more than 14 days
              after the Expiry Date, the condition of the Aircraft
              still does not comply with this Agreement, the Lessee
              shall, at the option of the Lessor and Mortgagee
              exercised by notice to Lessee, redeliver the Aircraft
              to the Lessor and indemnify the Lessor, and provide
              security reasonably acceptable to the Lessor and
              Mortgagee for that indemnity, against the cost of
              putting the Aircraft into the condition required by
              this Agreement.  During any extension of the Term
              pursuant to this Clause 12.4, this Agreement will
              remain in full force and effect, including the
              obligation to pay Basic Rent (which Lessee shall pay on
              a per diem basis weekly in advance); provided, however,
              that Lessee shall not operate, or permit others to
              operate, the Aircraft after the Expiry Date except for
              acceptance flights pursuant to Clause 12.2 and a ferry
              flight to the Redelivery Location.

         12.5 EXPORT DOCUMENTATION

              Upon redelivery and upon request by the Lessor, the
              Lessee shall (a) provide to the Lessor all documents
              necessary to export the Aircraft from the State of
              Registration (including a valid and subsisting export
              license for the Aircraft), and (b) provide any
              documents reasonably requested by the Lessor in
              connection with, and otherwise cooperate with, the
              deregistration of the Aircraft by the Aviation
              Authority, including causing the Aviation Authority to
              issue an Export Certificate of Airworthiness to a
              country specified by the Lessor.

         12.6 ACKNOWLEDGMENT

              Provided the Lessee has complied with its obligations
              under this Agreement, upon redelivery of the Aircraft
              by the Lessee to the Lessor at the Redelivery Location,
              the Lessor will deliver simultaneously to the Lessee
              the Certificate of Redelivery.

         12.7 MAINTENANCE PROGRAM

              (a)   During the 20 day period preceding the Scheduled
                    Expiry Date and upon the Lessor's request, the
                    Lessee will provide the Lessor or its agent
                    reasonable access to the Agreed Maintenance
                    Program and the Aircraft Documents in order to
                    facilitate the Aircraft's integration into any
                    subsequent operator's fleet.  The Lessor agrees
                    that it will not disclose (and will not permit its
                    agents to disclose) the contents of the Agreed
                    Maintenance Program to any Person except to the
                    extent necessary to monitor the Lessee's
                    compliance with this Agreement and/or to bridge
                    the maintenance program for the Aircraft from the
                    Agreed Maintenance Program to another program
                    after the Expiry Date.
    <PAGE>
              (b)   Concurrent with providing the Aircraft Documents
                    for Lessor's review, Lessee shall provide to
                    Lessor a written summary of all sampling programs
                    involving or affecting the Aircraft.

         12.8 STORAGE

              If the Lessor so requests, and subject to the
              availability of the requisite space, the Lessee shall
              park and store the Aircraft at a secure storage area,
              which may be at the Redelivery Location or at any other
              suitable facility of the Lessee selected by the Lessee,
              wherever located (the "STORAGE LOCATION"), on behalf of
              the Lessor for a period not exceeding 30 days from the
              Expiry Date.  During that period the Aircraft shall be
              at the Lessor's risk (save as to any loss or damage
              caused by the Lessee's wilful misconduct or gross
              negligence), and the Lessee shall maintain and store
              the Aircraft in accordance with the respective
              manufacturer's maintenance planning document and shall
              insure the Aircraft in accordance with a "ground risk
              only" policy  usual and customary in the worldwide
              aviation insurance marketplace.  All storage,
              maintenance and insurance costs (which shall be at
              Lessee's preferred customer rates or at the actual
              third-party rates charged to Lessee) shall be borne by
              the Lessor.

13.      DEFAULT

         13.1 EVENTS

              Each of the following events will constitute an Event
              of Default and a repudiation of this Agreement by the
              Lessee:

              (a)   NON-PAYMENT: Lessee (i) fails to pay the Agreed
                    Value and all other amounts required under Clause
                    11.1(b) on the Settlement Date, (ii) fails to make
                    any payment of Basic Rent or Additional Rent
                    within five Business Days after the date on which
                    such payment is due, or (iii) fails to pay any
                    other amount payable by it under this Agreement
                    within five Business Days after written notice
                    from Lessor or Mortgagee that such amounts are
                    due; or

              (b)   MATERIAL COVENANTS:  Lessee (i) fails to maintain
                    in full force and effect any insurance required to
                    be maintained under Clause 9, or (ii) transfers
                    possession of the Airframe or any Engine to
                    another Person other than as permitted by this
                    Agreement; or

              (c)   BREACH:  Lessee fails to comply with any other
                    provision of this Agreement and, if such failure
                    is, in the reasonable opinion of the Lessor,
                    capable of remedy, the failure continues for 30
                    days after notice from the Lessor to the Lessee,
                    provided, that if such failure cannot reasonably
                    be <PAGE> remedied within such 30 day period and the
                    Lessee is diligently undertaking all necessary
                    remedial action, the 30 day period shall be
                    extended for a further 30 days; or

              (d)   REPRESENTATION:  any representation or warranty
                    made (or deemed to be repeated) by the Lessee in
                    this Agreement or in any document or certificate
                    furnished to the Lessor pursuant to or in
                    connection with this Agreement is or proves to
                    have been incorrect in any material respect when
                    made or deemed to be repeated and the Lessee's
                    ability to comply with its obligations under this
                    Agreement, and/or the Lessor's or Mortgagee's
                    rights, title and interest to and in the Aircraft
                    and/or under this Agreement, are thereby
                    materially and adversely affected; or

              (e)   CROSS DEFAULT:

                    (i) any Financial Indebtedness of the Lessee or
                        any of its Affiliates that exceeds
                        $2,000,000 is not paid when due and any
                        applicable grace period shall have expired;

                    (ii)     the security for any Financial Indebtedness
                             is enforced; or

                    (iii)    any lease, conditional sale, installment
                             sale or forward purchase agreement of the
                             Lessee or any of its Affiliates in respect
                             of an aircraft is terminated as a
                             consequence of an event of default or
                             termination event (however described);

                    provided always, in any such case, it shall not
                    constitute an Event of Default under this
                    Agreement:

                    (1) if the relevant Financial Indebtedness
                        constitutes non-recourse borrowing or
                        financing; or

                    (2) if the non-payment, acceleration,
                        termination or event in question is being
                        contested by the Lessee in good faith and
                        on reasonable grounds and any declaration
                        of default, termination of agreement or
                        enforcement of security has been stayed by
                        a court of competent jurisdiction; or

              (f)   APPROVALS:  any consent, authorization, license,
                    certificate or approval of or registration with or
                    declaration to any Government Entity in connection
                    with this Agreement, including:

                    (i)      any authorization required by the Lessee
                             of, or in connection with, the execution,
                             delivery, validity, enforceability or
                             admissibility in <PAGE> evidence of this
                             Agreement or the performance by the Lessee of
                             its obligations under this Agreement; or

                    (ii)     any airline license, air transport license,
                             franchise, concession, permit, certificate,
                             right or privilege required by the Lessee
                             for the conduct of its business,

                    is modified, withheld, revoked, suspended,
                    canceled, withdrawn, terminated or not renewed, or
                    otherwise ceases to be in full force and is not
                    reissued, reinstated or renewed within 30 days,
                    provided however that any such modification,
                    withholding, revocation, suspension, cancellation,
                    withdrawal, termination or non-renewal shall only
                    constitute an Event of Default if it has a
                    material adverse effect on the Lessee's ability to
                    perform its obligations under the Operative
                    Documents or on the Lessor's rights, title and
                    interest to and in the Aircraft or under this
                    Agreement; or

              (g)   INSOLVENCY:

                    (i)      the Lessee or any of its Affiliates is, or
                             is deemed for the purposes of any relevant
                             law to be, unable to pay its debts as they
                             fall due or to be insolvent, or admits
                             inability to pay its debts as they fall
                             due; or

                    (ii)     the Lessee or any of its Affiliates
                             suspends making payments on all or any
                             class of its debts or announces an
                             intention to do so, or a moratorium is
                             declared in respect of any of its
                             indebtedness; or

              (h)   BANKRUPTCY AND SIMILAR PROCEEDINGS

                    (i)      Lessee shall consent to the appointment of
                             a receiver, trustee or liquidator for
                             itself or for a substantial part of its
                             property; or

                    (ii)     Lessee shall admit in writing its inability
                             to pay its debts generally as they become
                             due, or Lessee shall make a general
                             assignment for the benefit of creditors; or

                    (iii)    Lessee shall file a voluntary petition in
                             bankruptcy or a voluntary petition or
                             answer seeking reorganization in a
                             proceeding under 11 U.S.C. "101 et seq. or
                             under any other laws dealing with
                             bankruptcy, insolvency, moratorium or
                             creditors' rights generally (any or all of
                             which are hereinafter referred to as
                             "BANKRUPTCY LAWS"), or an answer admitting
                             the material allegations of a petition
                             filed against Lessee in any such
                             proceeding, or Lessee shall by voluntary
                             petition or answer consent to or fail to
                             oppose <PAGE> the seeking of relief under the
                             provisions of any Bankruptcy Laws; or

                    (iv)     any order, judgment or decree is entered by
                             a court of competent jurisdiction
                             appointing a receiver, trustee or
                             liquidator of Lessee or a substantial part
                             of its property, or ordering a substantial
                             part of Lessee's property to be
                             sequestered, is instituted or done with the
                             consent of Lessee or, if instituted by
                             another Person, the order, judgment or
                             decree is  not dismissed, remedied or
                             relinquished within 60 days; or

                    (v)      a petition against Lessee in a proceeding
                             under any Bankruptcy Laws shall be filed
                             and shall not be withdrawn or dismissed
                             within 60 days thereafter, or if, under the
                             provisions of any Bankruptcy Laws that may
                             apply to Lessee, any court of competent
                             jurisdiction shall assume jurisdiction,
                             custody or control of Lessee or of any
                             substantial part of its property; or

                    (vi)     any step (including petition, proposal or
                             convening a meeting) is taken with a view
                             to a composition, assignment or arrangement
                             with any creditors of, or the
                             reorganization, rehabilitation,
                             administration, liquidation, or dissolution
                             of, the Lessee or any of its Affiliates or
                             any other insolvency proceedings involving
                             the Lessee or any of its Affiliates; or

              (i)   OTHER JURISDICTION:  there occurs in relation to
                    the Lessee any event anywhere which, in the
                    reasonable opinion of the Lessor, corresponds with
                    any of those mentioned in Clause 13.1(h); or

              (j)   UNLAWFUL:  it becomes unlawful for the Lessee to
                    perform any of its material obligations under this
                    Agreement or this Agreement becomes wholly or
                    partly invalid or unenforceable, provided that any
                    such partial invalidity or unenforceability shall
                    only constitute an Event of Default if  it has a
                    material adverse effect on the Lessee's ability to
                    perform its obligations under this Agreement or
                    the Lessor's rights, title and interest in and to
                    the Aircraft or under this Agreement; or

              (k)   SUSPENSION OF BUSINESS:  the Lessee suspends or
                    ceases to carry on all or a substantial part of
                    its business; or

              (l)   DISPOSAL:  the Lessee disposes or threatens to
                    dispose of all or a material part of its assets,
                    whether by one or a series of transactions,
                    related or not, other than pursuant to a merger or
                    consolidation as referred to in, and subject to,
                    Clause 8.8(b) or for the purpose of any other
                    reorganization or <PAGE> amalgamation the terms of which
                    have received the previous consent in writing of
                    the Lessor; or

              (m)   RIGHTS:  the existence, validity, enforceability
                    or priority of the rights of the Lessor as owner
                    and lessor in respect of the Aircraft or the
                    rights of Mortgagee as mortgagee of the Aircraft
                    and assignee of this Agreement are challenged by
                    the Lessee or any other Person claiming by or
                    through the Lessee and, in the case of a Person
                    other than Lessee, such claim presents a material
                    risk of loss or forfeiture of the rights of Lessor
                    or Mortgagee with respect to the Aircraft; or

              (n)   DELIVERY:  the Lessee fails to accept delivery of
                    the Aircraft when validly tendered pursuant to
                    this Agreement by the Lessor (provided that the
                    Lessor shall have satisfied the conditions
                    precedent set out in Clause 3.4); or

              (o)   ADVERSE CHANGE:  any event or series of events
                    occurs which, in the reasonable opinion of the
                    Lessor, could be expected to have a material
                    adverse effect on the financial condition or
                    operations of the Lessee and its Affiliates or on
                    the ability of the Lessee to comply with its
                    obligations under this Agreement; or

              (p)   LETTER OF CREDIT: if the Lessee has elected to
                    deliver the Letter of Credit in lieu of the
                    Security Deposit pursuant to Clause 5.1(b), the
                    Letter of Credit ceases for any reason to be in
                    full force and effect or is not renewed or
                    replaced 30 days before its expiration in
                    accordance with Clause 5.1(b) and the Lessee does
                    not immediately provide the Lessor with cash in an
                    amount equal to the Security Deposit.

         13.2 RIGHTS

              If an Event of Default occurs, and for as long as it
              shall continue, the Lessor may at its option (and
              without prejudice to any of its other rights under this
              Agreement or that may arise by operation of Applicable
              Law), at any time thereafter:

              (a)   treat such event as a repudiation by the Lessee of
                    its obligations under this Agreement and by notice
                    to the Lessee with immediate effect terminate the
                    leasing of the Aircraft (but without prejudice to
                    the continuing obligations of the Lessee under
                    this Agreement), whereupon all rights of the
                    Lessee under this Agreement shall cease; and/or

              (b)   proceed by appropriate court action or actions to
                    enforce performance of this Agreement or to
                    recover damages for the breach of this Agreement;
                    and/or
<PAGE>
              (c)   either:

                    (i)      take possession of the Aircraft, for which
                             purpose the Lessor may enter any premises
                             belonging to, occupied by or under the
                             control of the Lessee (for which purpose
                             the Lessee hereby grants to the Lessor an
                             irrevocable license to the extent permitted
                             by Applicable Law) where the Aircraft may
                             be located, or cause the Aircraft to be
                             redelivered to the Lessor at the Redelivery
                             Location (or such other location as the
                             Lessor may require), and the Lessor is
                             hereby irrevocably authorized and
                             empowered, to the extent permitted by
                             Applicable Law,  to direct pilots of the
                             Lessee or other pilots to fly the Aircraft
                             to that airport and will have all the
                             powers and authorizations necessary for
                             taking such action; or

                    (ii)     by serving notice, require Lessee to
                             redeliver the Aircraft to Lessor at the
                             Redelivery Location (or such other location
                             as Lessor may require) in the condition
                             required by Clause 12 and Schedule 4.

         13.3 EXPORT

              If an Event of Default occurs, and for as long as it
              shall continue, the Lessor may sell or otherwise deal
              with the Aircraft as if this Agreement had never been
              made and the Lessee will, at the request of the Lessor,
              take all steps necessary to deregister the Aircraft
              from the aircraft registry of the State of Registration
              (if other than the United States of America) and export
              the Aircraft from the country where the Aircraft is for
              the time being registered or situated and any other
              steps necessary to enable the Aircraft to be
              redelivered to the Lessor in accordance with this
              Agreement.  The Lessee hereby irrevocably and by way of
              security for its obligations under this Agreement
              authorizes and empowers the Lessor as its
              attorney-in-fact and agent (such agency being coupled
              with an interest), in Lessor's own name or in the name
              of Lessee, to execute and deliver any documentation and
              to do any act or thing required in connection with the
              foregoing.

         13.4 DEFAULT PAYMENTS

              If a Default occurs, the Lessee will indemnify and pay
              to Lessor on demand against any loss, damage, expense,
              cost or liability which the Lessor may sustain or incur
              directly or indirectly as a result, including:

              (a)   all unpaid Basic Rent, Additional Rent and
                    Supplemental Rent then due and unpaid;
<PAGE>
              (b)   any loss of profit (calculated on an after-tax
                    basis) suffered by the Lessor because of the
                    Lessor's inability to place the Aircraft on lease
                    with another Lessee on terms as favorable to the
                    Lessor as this Agreement or because whatever use,
                    if any, to which the Lessor is able to put the
                    Aircraft upon its return to the Lessor, is not as
                    profitable (calculated on an after-tax basis) to
                    the Lessor as this Agreement would have been but
                    for such Default or non-delivery;

              (c)   in the event that the Aircraft is sold prior to
                    Lessor entering into a replacement lease, the
                    amount (if any) by which (i) the aggregate of (1)
                    the net sale proceeds (calculated by deducting the
                    costs of sale together with the cost of preparing
                    the Aircraft for sale and the repayment of any
                    outstanding indebtedness in relation to the
                    financing of the Aircraft) plus (2) the present
                    value of the anticipated after-tax net income to
                    be derived from such net sale proceeds up to the
                    Scheduled Expiry Date, discounted on a monthly
                    basis using 9.5% per annum as the discount rate,
                    are less than (ii) the aggregate of (1) the
                    present value of the anticipated net sale proceeds
                    (computed on the same basis as the net sale
                    proceeds referred to in  (i)(1) above), assuming
                    that the Aircraft would have been sold as soon as
                    reasonably practicable following the Scheduled
                    Expiry Date plus (2) the present value of the
                    income that would have been derived from the
                    future Basic Rent payable until the Scheduled
                    Expiry Date, discounted on a monthly basis using
                    9.5% per annum as the discount rate;

              (d)   any amount of principal, interest, fees or other
                    sums whatsoever paid or payable on account of
                    funds borrowed in order to carry any amount unpaid
                    by the Lessee;

              (e)   any loss, premium, penalty or expense that may be
                    incurred in repaying funds raised to finance the
                    Aircraft or in unwinding any swap, forward
                    interest rate agreement or other financial
                    instrument relating in whole or in part to the
                    Lessor's financing of the Aircraft; and

              (f)   any loss, cost, expense or liability sustained or
                    incurred by the Lessor owing to the Lessee's
                    failure to redeliver the Aircraft on the date, at
                    the place and in the condition required by this
                    Agreement.

              For the avoidance of doubt, the provisions of Clause
              5.7(a) will apply to any sums payable by the Lessee
              pursuant to this Clause 13.4.

         13.5 WAIVER OF CERTAIN ARTICLE 2A RIGHTS

              To the fullest extent permitted by Applicable Law, each
              of Lessor and Lessee hereby agree that no rights or
              remedies referred to in Article 2A of the Uniform
              <PAGE> Commercial Code shall be conferred upon either Lessor
              or Lessee unless otherwise expressly granted in this
              Agreement.

14.      ASSIGNMENT and TRANSFER

         14.1 NO ASSIGNMENT BY LESSEE

              The Lessee will not assign any of its right, title,
              interests, duties, obligations or liabilities in, to or
              under this Agreement, or create or permit to exist any
              Security Interest (other than Permitted Liens) over any
              of its rights under this Agreement, and any such
              purported assignment or grant of a security interest
              shall be void ab initio and of no force or effect.

         14.2 LESSOR ASSIGNMENT

              The Lessor may sell, assign (for purposes of this
              Clause 14.2, not including an assignment for security
              purposes) or transfer all or any of its rights under
              this Agreement and in the Leased Property provided that
              the provisions of this Clause 14.2 are satisfied (a
              "TRANSFER") and the Lessor will have no further
              obligations under this Agreement following a Transfer
              (other than obligations that are outstanding as of the
              date of such Transfer) but, notwithstanding any
              Transfer, will remain entitled to the benefit of each
              indemnity under this Agreement.

              (a)   In connection with any Transfer, the following
                    conditions shall apply:

                    (i)      Lessor shall give Lessee written notice of
                             such Transfer at least 10 Business Days
                             before the date of such Transfer,
                             specifying the name and address of the
                             proposed purchaser, assignee or transferee
                             (the "TRANSFEREE");

                    (ii)     the Transferee will be either (1) a Person
                             reasonably experienced in aircraft leasing
                             (or the Transferee's rights and powers
                             under this Agreement shall be exercised or
                             serviced on its behalf pursuant to an
                             appropriate management or servicing
                             agreement by a Person having such
                             experience) with a net worth in excess of
                             $15,000,000, or (2)_a Person with at least
                             10 years of experience (or whose principals
                             have at least 10 years of experience) in
                             aircraft leasing (or the Transferee's
                             rights and powers under this Agreement
                             shall be exercised or serviced on its
                             behalf pursuant to an appropriate
                             management or servicing agreement by a
                             Person having such experience) with a net
                             worth in excess of $7,500,000 and which
                             causes a United States bank, trust company
                             or other financial institution to agree to
                             hold all Additional Rent paid to Lessor in
                             a segregated, interest-bearing account of
                             such institution to be <PAGE> applied to the
                             obligations of Lessor pursuant to Clause
                             7.2 of this Agreement;

                    (iii)    the Transferee will be a "citizen of the
                             United States" within the meaning of
                             Section_40102(a)(15) of the Federal
                             Aviation Law and have full corporate power
                             and authority to enter into and perform the
                             transactions contemplated by this Agreement
                             on the part of "Lessor";

                    (iv)     on the Transfer date the Lessor and the
                             Transferee shall enter into an agreement or
                             agreements acceptable to Lessee in its
                             reasonable discretion in which the
                             Transferee confirms that it shall be deemed
                             a party to this Agreement and agrees to be
                             bound by all the terms of, and to undertake
                             all of the obligations of, the Lessor
                             contained in this Agreement;

                    (v)      such Transfer shall not violate any
                             Applicable Law;

                    (vi)     the Transferee shall provide to Lessee an
                             opinion of its regular independent counsel
                             as to the matters set forth in sub-clause
                             (iii) and as to the legality, validity,
                             binding effect and enforceability of the
                             agreement or agreements between Lessor and
                             Transferee referred to in sub-clause (iv);
                             and

                    (vii)    Lessee shall have no obligation to consent
                             to any changes in this Agreement requested
                             by the Lessor or Transferee.

              (b)   Upon any Transfer, the Transferee shall be deemed
                    Lessor for all purposes of this Agreement, each
                    reference in this Agreement to the "Lessor" shall
                    thereafter be deemed for all purposes to refer to
                    the Transferee, and  the transferor shall be
                    relieved of all obligations of the "Lessor" under
                    this Agreement arising after the time of such
                    Transfer except to the extent attributable to acts
                    or events occurring prior to the time of such
                    Transfer.

              (c)   Upon compliance by Lessor and a Transferee with
                    the terms and conditions of Clause 14.2(a), Lessee
                    shall at the time of Transfer, at the specific
                    written request of Lessor and with Lessor paying
                    all of Lessee's reasonable out-of-pocket costs and
                    expenses and, if Lessee does not use outside
                    counsel in connection with such Transfer, Lessee's
                    reasonable internal legal costs:

                    (i)      execute and deliver to Lessor and to such
                             Transferee an agreement, in form and
                             substance satisfactory to Lessor, Lessee
                             and such Transferee, dated the date of such
                             transfer, consenting to such <PAGE> transfer,
                             agreeing to pay all or such portion of the
                             Basic Rent, Additional Rent and other
                             payments under this Agreement to such
                             Transferee or its designee as such
                             Transferee shall direct, and agreeing that
                             such Transferee shall be entitled to rely
                             on all representations and warranties made
                             by Lessee in the Operative Documents as
                             though such Transferee was the original
                             "Lessor"; provided, that such
                             representations shall not be deemed to be
                             re-made as of the date of any Transfer;

                    (ii)     execute and deliver to Lessor or such
                             Transferee, as the case may be,
                             precautionary Uniform Commercial Code
                             financing statements or amendments
                             reflecting the interests of such Transferee
                             in the Aircraft and this Agreement;

                    (iii)    deliver to Lessor and to such Transferee a
                             certificate, signed by a duly authorized
                             officer of Lessee, dated the date of such
                             transfer, to the effect that no Event of
                             Default has occurred and is continuing or,
                             if one is then continuing, describing such
                             Event of Default;

                    (iv)     cause to be delivered to Lessor and such
                             Transferee certificates of insurance and
                             broker's letter of undertaking
                             substantially in the form set out in Parts
                             2 and 3 of Schedule 5, detailing the
                             coverage and confirming the insurers'
                             agreement to the specified insurance
                             requirements of this Agreement and listing
                             the Lessor and Transferee as additional
                             insureds and the Transferee as sole loss
                             payee (subject to other direction by
                             Mortgagee);

                    (v)      deliver to Lessor and to such Transferee an
                             opinion of Lessee's counsel (which may be
                             Lessee's General Counsel), addressed to
                             Lessor and such Transferee to the effect
                             that the agreement referred to in
                             sub-clause (i) has been duly authorized and
                             executed by Lessee and constitutes the
                             legal, valid and binding obligation of
                             Lessee, enforceable against Lessee in
                             accordance with its terms (subject to
                             customary exceptions), and (if such counsel
                             delivered the opinion attached as Exhibit D
                             on the Delivery Date) to the effect that
                             such Transferee may rely on the opinion
                             delivered by such counsel in connection
                             with this Agreement on the Delivery Date
                             with the same force and effect as if such
                             Transferee was an original addressee of
                             such opinion when given;

                    (vi)     deliver to Lessor and such Transferee
                             information on the location of the Airframe
                             and Engines at all times requested by
                             Lessor in order to permit the Transfer to
                             take place at a time and on a date so <PAGE>
                             as to eliminate or minimize any Taxes applicable
                             to the Transfer; and

                    (vii)    such other documents as Lessor or such
                             Transferee may reasonably request.

         14.3 GRANTS OF SECURITY INTERESTS

              The Lessor shall be entitled at any time after Delivery
              to grant a security interest in the Leased Property or
              its right, title and interest in this Agreement (each,
              an "ADDITIONAL MORTGAGE") in favor of any Person (each,
              an "ADDITIONAL MORTGAGEE").  Any Additional Mortgage
              may be a successor mortgage to the Security Interest
              granted to Mortgagee, or may be in addition to
              Mortgagee's Security Interest and previous Additional
              Mortgages and with a priority senior, equal or
              subordinate to Mortgagee's Security Interest and
              previous Additional Mortgages as Mortgagee and previous
              Additional Mortgagees may permit.  In the case of any
              such grant by Lessor of an Additional Mortgage to an
              Additional Mortgagee in all or any portion of Lessor's
              rights, title and interest in and to the Aircraft and
              this Agreement, Lessee shall promptly, at the specific
              written request of Lessor and with Lessor paying all of
              Lessee's reasonable out-of-pocket costs and expenses:

              (a)   execute and delivery to Lessor and to such
                    Additional Mortgagee an agreement, substantially
                    in the form of the Consent and otherwise in form
                    and substance satisfactory to Lessor, such
                    Additional Mortgagee and Lessee, dated the date of
                    the grant of such Additional Mortgage,
                    (i) consenting to such Additional Mortgage and to
                    any assignment of Lessor's rights, title and
                    interest in and to this Agreement to such
                    Additional Mortgagee for security purposes,
                    (ii) if requested by Lessor and consented to by
                    the previous payee, agreeing that Lessee will pay
                    the Basic Rent and other payments under this
                    Agreement to such Additional Mortgagee, and
                    (iii) agreeing that such Additional Mortgagee
                    shall be entitled to rely on all representations
                    and warranties made by Lessee in this Agreement or
                    in any certificate or document furnished by Lessee
                    in connection with this Agreement Documents as
                    though such Additional Mortgagee was originally
                    the "Mortgagee";

              (b)   execute and deliver to Lessor and such Additional
                    Mortgagee such agreements as the Lessor may
                    reasonably require and which are acceptable to
                    Lessee for the purposes of effecting all necessary
                    amendments to this Agreement;

              (c)   execute and deliver to Lessor or such Additional
                    Mortgagee, as the case may be, precautionary
                    Uniform Commercial Code financing statements or
                    <PAGE>amendments reflecting the assignment of Lessor's
                    interests in the Operative Documents to such
                    Additional Mortgagee;

              (d)   deliver to Lessor and such Additional Mortgagee a
                    certificate, signed by a duly authorized officer
                    of Lessee, dated the date of the grant of the
                    Additional Mortgage, to the effect that no Event
                    of Default has occurred and is continuing or, if
                    one is then continuing, describing such Event of
                    Default;

              (e)   cause to be delivered to Lessor and such
                    Additional Mortgagee certificates of insurance and
                    broker's letter of undertaking substantially in
                    the form set out in Parts_2 and 3 of Schedule 5,
                    detailing the coverage and confirming the
                    insurers' agreement to the specified insurance
                    requirements of this Agreement, adding such
                    Additional Mortgagee as an additional insured and,
                    if requested by Lessor and consented to by the
                    previous loss payee, listing such Additional
                    Mortgagee as sole loss payee;

              (f)   deliver to Lessor and such Additional Mortgagee an
                    opinion of Lessee's counsel (which may be Lessee's
                    General Counsel), addressed to Lessor and such
                    Additional Mortgagee (i) to the effect that the
                    agreements referred to in sub-clauses (a) and (b)
                    have been duly authorized and executed by Lessee
                    and constitute the legal, valid and binding
                    obligations of Lessee, enforceable against Lessee
                    in accordance with their terms (subject to
                    customary exceptions), and (ii) if such counsel
                    delivered the opinion attached as Exhibit D on the
                    Delivery Date, to the effect that such Additional
                    Mortgagee may rely on the opinion delivered by
                    such counsel in connection with this Agreement on
                    the Delivery Date with the same force and effect
                    as if such Additional Mortgagee was an original
                    addressee of such opinion when given; and

              (g)   such other documents as Lessor or such Additional
                    Mortgagee may reasonably request.

         14.4 SALE AND LEASEBACK BY LESSOR

              In addition to the Transfers and grants of Security
              Interests permitted by Clauses 14.2 and 14.3, but
              subject to the provisions thereof, Lessor shall be
              entitled to transfer its right, title and interests in
              and to the Leased Property to any Person and lease the
              Aircraft from such Person (a "HEAD LESSOR"), and in
              such event Lessor shall retain its rights and
              obligations as the "Lessor" under this Agreement.  In
              the event of such a sale and lease-back by Lessor,
              (a) the Head Lessor shall meet the requirements for a
              "Transferee" as defined in Clause 14.2(a)(ii) above,
              (b) the Lessor shall be entitled to assign its rights
              in this Agreement to such Head Lessor as security for
              its obligations under the head <PAGE> lease, (c) the Head
              Lessor shall be entitled to grant to one or more
              purchase money lenders, or to an indenture trustee on
              behalf of such lenders, an Additional Mortgage covering
              the Leased Property and the Operative Documents,
              (d) Lessee shall execute and deliver to Lessor, such
              Head Lessor, such Additional Mortgagee and any trustees
              on their behalf, as appropriate, the documents
              specified in Clauses 14.2(c)(i) through (vi) and
              Clauses 14.3(a) through (f) above, and Lessee shall
              cooperate with Lessor to make such other changes to
              this Agreement as Lessor may reasonably request so long
              as such changes do not adversely affect the rights or
              increase or extend the obligations of Lessee under this
              Agreement or otherwise adversely affect Lessee and with
              Lessor paying all of Lessee's reasonable out-of-pocket
              costs and expenses.

         14.5 FURTHER ACKNOWLEDGMENTS

              Lessee further acknowledges that any Transferee or
              Additional Mortgagee shall in turn have the rights of,
              and be subject to the conditions to, transfer and
              grants of Security Interests set forth above in this
              Clause 14.

         14.6 CERTAIN PROTECTIONS FOR LESSEE'S BENEFIT

              The rights of Lessee under this Agreement shall be
              superior to the rights of any Additional Mortgagee or
              Head Lessor, and the Lessor shall require each
              Additional Mortgagee and Head Lessor to agree in
              writing with the Lessee that such Additional
              Mortgagee's and Head Lessor's rights in and to the
              Leased Property shall be subject to the terms of this
              Agreement, including to the Lessee's rights to the
              quiet use, possession and enjoyment provisions
              contained in this Agreement.  The Lessor's obligations
              to perform the terms and conditions of this Agreement
              shall remain in full force and effect notwithstanding
              the creation of any Additional Mortgage or Head Lease.
              Lessor shall not create any Additional Mortgage or
              enter into any Head Lease that violates the terms of
              this Clause 14.6.

15.      MISCELLANEOUS

         15.1 WAIVERS, REMEDIES CUMULATIVE

              The rights of Lessor or Lessee under this Agreement may
              be exercised as often as necessary, are cumulative and
              not exclusive of that party's rights under any law and
              may be waived only in writing and specifically.  Delay
              in exercising or non-exercise of any such right is not
              a waiver of that right.

         15.2 DELEGATION

              Lessor or any Financing Party may delegate to any
              Person or Persons all or any of the trusts, powers or
              discretions vested in it by this Agreement and any such
              <PAGE> delegation may be made upon such terms and conditions
              and subject to such regulations (including power to
              sub-delegate) as the Lessor or such Financing Party,
              respectively, in its absolute discretion thinks fit.

         15.3 APPROPRIATION

              If any sum paid or recovered in respect of the
              liabilities of the Lessee under this Agreement is less
              than the amount then due, the Lessor may apply that sum
              to amounts due under this Agreement in such proportions
              and order and generally in such manner as the Lessor
              may determine.

         15.4 CURRENCY INDEMNITY

              (a)   If the Lessor receives an amount in respect of the
                    Lessee's liability under this Agreement or if such
                    liability is converted into a claim, proof,
                    judgment or order in a currency other than
                    Dollars:

                    (i)      the Lessee will indemnify the Lessor, as an
                             independent obligation, against any loss
                             arising out of or as a result of such
                             conversion;

                    (ii)     if the amount received by the Lessor, when
                             converted into Dollars (at the market rate
                             at which the Lessor is able on the relevant
                             date to purchase Dollars in New York City
                             with that other currency) is less than the
                             amount owed in Dollars, the Lessee will,
                             forthwith on demand, pay to the Lessor an
                             amount in Dollars equal to the deficit; and

                    (iii)    the Lessee will pay to the Lessor on demand
                             any exchange costs and Taxes payable in
                             connection with the conversion.

              (b)   The Lessee waives, to the extent permitted by
                    Applicable Law,  any right it may have in any
                    jurisdiction to pay any amount under this
                    Agreement in a currency other than Dollars.

         15.5 PAYMENT BY THE LESSOR

              The Lessor will not be obliged to pay any amounts to
              the Lessee under this Agreement so long as any sums
              which are then due from the Lessee under this Agreement
              remain unpaid and any such amounts which would
              otherwise be due will fall due only if and when the
              Lessee has paid all such sums.

         15.6 SEVERABILITY
<PAGE>
              If a provision of this Agreement is or becomes illegal,
              invalid or unenforceable in any jurisdiction, that will
              not affect:

              (a)   the legality, validity or enforceability in that
                    jurisdiction of any other provision of this
                    Agreement; or

              (b)   the legality, validity or enforceability in any
                    other jurisdiction of that or any other provision
                    of this Agreement.

         15.7 REMEDY

              If the Lessee fails to comply with any provision of
              this Agreement, the Lessor may, without being in any
              way obliged to do so or responsible for so doing and
              without prejudice to the ability of the Lessor to treat
              the non-compliance as a Default, effect compliance on
              behalf of the Lessee, whereupon the Lessee shall become
              liable to pay immediately any sums expended by the
              Lessor together with all costs and expenses (including
              reasonable legal costs) necessarily incurred in
              connection therewith.

         15.8 EXPENSES

              (a)   The Lessor and the Lessee shall each bear their
                    respective expenses (including legal, professional
                    and out-of-pocket expenses) incurred or payable in
                    connection with the negotiation, preparation and
                    execution of this Agreement, and shall share
                    equally the fees and expenses of Special FAA
                    Counsel in connection with the transactions
                    contemplated by this Agreement, including in
                    connection with the Assignment and Mortgage.
                    Lessor shall otherwise bear and be responsible for
                    all fees and expenses in connection with the
                    importation and registration of the Aircraft and
                    the registration and recording of the Assignment
                    and Mortgage.

              (b)   The Lessee shall pay to the Lessor on demand all
                    expenses (including legal, professional and
                    out-of-pocket expenses) incurred or payable by the
                    Lessor in connection with the granting of any
                    waiver or consent under this Agreement.

              (c)   The Lessee will pay to the Lessor on demand all
                    expenses (including reasonable legal, survey and
                    other costs) payable or incurred by the Lessor in
                    contemplation of, or otherwise in connection with,
                    the enforcement of or preservation of any of the
                    Lessor's rights under this Agreement, or in
                    respect of the repossession of the Aircraft.

              (d)   The Lessor will pay to the Lessee on demand all
                    expenses (including reasonable legal costs)
                    payable or incurred by the Lessee in contemplation
                    <PAGE> of, or otherwise in connection with, the
                    enforcement of or preservation of any of the
                    Lessee's rights under this Agreement.

         15.9 TIME OF ESSENCE

              The time stipulated in this Agreement for all payments
              payable by the Lessee to the Lessor and for the
              performance of the Lessee's other obligations under
              this Agreement that are due on a specified or
              determinable date will be of the essence of this
              Agreement (subject always to any applicable grace
              period).

        15.10 NOTICES

              (a)   All notices and other communications given under
                    or in connection with this Agreement shall be in
                    writing (including telegram) and shall be deemed
                    to have been received when delivered to the
                    address specified in clause 15.10(b).

              (b)   All such notices, requests, demands and other
                    communications shall be sent:


                    (i) to Lessor at:
                             c/o Unicapital Air Group, Inc.
                             1900 Summit Tower Blvd., Suite 860
                             Orlando, Florida  32810
                             Attention:  Mr. Samuel J. Thornton
                             Telephone:  +1-407-916-8000
                             Telefax:    +1-407-916-8001

                    copied to Mortgagee at:
                             FINOVA Capital Corporation
                             1850 North Central Avenue
                             Phoenix, Arizona 85002
                             Attention:  Vice President -
                                         Operations Management
                             Telefax:  +1-602-262-1551

                    (ii)     to Lessee at:
                             7000 Squibb Road, 3rd Floor
                             Mission, Kansas 66202
                             Attention:  Mr. William A. Garrett, III
                             Telephone:  +1-913-789-1769
                             Telefax:    +1-913-789-1779

              or to such other address as shall have been notified by
              one party to the other in the manner set out in this
              Clause 15.10.

    15.11     LAW AND JURISDICTION
<PAGE>
              (a)   THIS AGREEMENT SHALL, IN ALL RESPECTS, INCLUDING
                    ALL MATTERS OF CONSTRUCTION, VALIDITY AND
                    PERFORMANCE, BE GOVERNED BY AND CONSTRUED IN
                    ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
                    APPLICABLE TO CONTRACTS ENTERED INTO IN THE STATE
                    OF NEW YORK BY RESIDENTS OF SUCH STATE AND TO BE
                    PERFORMED ENTIRELY WITHIN SUCH STATE.

              (b)   The Lessor and the Lessee hereby irrevocably agree
                    to submit to the non-exclusive jurisdiction of the
                    United States District Court for the Southern
                    District of New York and the Supreme Court of the
                    State of New York located in the Borough of
                    Manhattan, County of New York (the "Agreed
                    Courts") in the event of any claims or disputes
                    arising under this Agreement.  Such submission to
                    jurisdiction shall not be construed so as to limit
                    the right of either party to take proceedings
                    against the other in whatever jurisdiction shall
                    to it seem fit nor shall the taking of proceedings
                    in any one or more jurisdictions preclude the
                    taking of proceedings in any other jurisdiction,
                    whether concurrently or not.  Final judgment
                    against Lessor or Lessee in any such suit shall be
                    conclusive and may be enforced in any other
                    jurisdiction by suit on the judgment or as
                    otherwise permitted by Applicable Law, a certified
                    or true copy of which shall be conclusive evidence
                    of the facts and of the amount of any indebtedness
                    or liability of Lessor or Lessee.  Each of Lessor
                    and Lessee hereby irrevocably waives any objection
                    which it may now or hereafter have to the laying
                    of venue in any suit, action or proceeding brought
                    in any Agreed Court, and irrevocably waives any
                    claim that any such suit, action or proceeding
                    brought in any Agreed Court has been brought in an
                    inconvenient forum.

              (c)   THE LESSEE AND THE LESSOR HEREBY WAIVE TRIAL BY
                    JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE
                    PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY
                    MATTER ARISING OUT OF OR RELATING TO THIS
                    AGREEMENT.

              (d)   Without prejudice to any other mode of service,
                    each of the Lessor and the Lessee consents to the
                    service of process relating to any proceedings
                    involving, directly or indirectly, any matter
                    arising out of or relating to this Agreement by
                    U.S. Postal Service or Irish postal service
                    registered mail (prepaid, return receipt
                    requested) of a copy of the process to the
                    Lessee's address identified in Clause 15.10(b).

    15.12     SOLE AND ENTIRE AGREEMENT

              This Agreement is the sole and entire agreement between
              the Lessor and the Lessee in relation to the leasing of
              the Aircraft, and supersedes all previous <PAGE> agreements in
              relation to that leasing.  The terms and conditions of
              this Agreement can only be varied by an instrument in
              writing executed by both parties or by their duly
              authorized representatives.

    15.13     INDEMNITIES

              All rights expressed to be granted to each Indemnitee
              under this Agreement (other than any Financing Party)
              are given to the Lessor as agent for and on behalf of
              that Indemnitee.

    15.14     COUNTERPARTS

              This Agreement may be executed in one or more
              counterparts, each of which shall constitute an
              original and, when taken together, all of which shall
              constitute one and the same Agreement.

    15.15     CONFIDENTIALITY

              Neither the Lessor nor the Lessee shall, without the
              other's prior written consent, communicate or disclose
              the terms of this Agreement or any information or
              documents furnished pursuant to this Agreement (except
              to the extent that the same are within the public
              domain) to any third party (other than any Financing
              Party, any prospective Transferee, any material
              investor in the Lessee or creditor in Lessee,
              Additional Mortgagees or Head Lessors, the respective
              external legal advisers, auditors, insurance brokers or
              underwriters of Lessor, Lessee and such parties, and
              the Manufacturer and Engine Manufacturer); provided,
              that disclosure will be permitted, to the extent
              required:

              (a)   pursuant to an order of any court of competent
                    jurisdiction; or

              (b)   pursuant to any procedure for discovery of
                    documents in any proceedings before any such
                    court; or

              (c)   pursuant to any law or regulation having the force
                    of law; or

              (d)   pursuant to a lawful requirement of any authority
                    with whose requirements the disclosing party is
                    legally obliged to comply; or

              (e)   in order to perfect any assignment of any
                    assignable warranties.


                     [SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF Lessor and Lessee have executed this Lease
Agreement 22120 on the date shown at the beginning of this
Agreement.

                                       SIGNED on behalf of
                                       AIRCRAFT 22120, INC.



                                       By:_________________________
                                       Name:
                                       Title:


                                       SIGNED on behalf of
                                       VANGUARD AIRLINES, INC.



                                       By:_________________________
                                       Name:
                                       Title:

              [FINOVA Capital Corporation hereby acknowledges receipt
of this Original Executed Counterpart of Lease Agreement 22120 in
Phoenix, Arizona on this ____ day of August 1999.

                                       FINOVA CAPITAL CORPORATION



                                       By:_________________________
                                       Name:
                                       Title]1/


        1/   This text will only appear on one counterpart of Lease
             Agreement 22120.