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                            REVOLVING LOAN AGREEMENT

                                 BY AND BETWEEN

                           KELLSTROM INDUSTRIES, INC.
                                 (THE BORROWER)

                                       AND

                               BARNETT BANK, N.A.
                                   (THE BANK)

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Copyright 1996

English, McCaughan & O'Bryan, P.A.

All Rights Reserved.







 
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                                TABLE OF CONTENTS

                  (The Table of Contents for this  Revolving  Loan  Agreement is
                  for  convenience  of  reference  only and is not  intended  to
                  define,   limit  or  describe  the  scope  or  intent  of  any
                  provisions of this Revolving Loan Agreement.)

ARTICLE/SECTION                    HEADING                         PAGE
---------------                    -------                         ----
ARTICLE I                  DEFINITIONS AND ACCOUNTING TERMS........  1

         1.01     Definitions......................................  1
         1.02     Accounting Terms................................. 19

ARTICLE II                 AMOUNTS AND TERMS OF FACILITY 1......... 19

         2.01     Facility 1....................................... 19
         2.02     Borrowing Base for Facility 1.................... 19
         2.03     Facility 1 Note.................................. 20
         2.04     Advance of Proceeds of Facility 1................ 21
         2.05     Interest Rate; Payment of Facility 1 Note........ 21
         2.06     Prepayments...................................... 21
         2.07     Calculation of Interest.......................... 22
         2.08     Set-Off.......................................... 22
         2.09     Late Payment Penalty............................. 22
         2.10     Use of Proceeds.................................. 23
         2.11     Right to Debit Account........................... 23
         2.12     Commitment Fee................................... 23

ARTICLE III       AMOUNTS AND TERMS OF FACILITY 2.................. 23

         3.01     Facility 2....................................... 23




 
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         3.02     Borrowing Base for Facility 2.................... 23
         3.03     Facility 2 Note.................................. 24
         3.04     Advance of Proceeds of Facility 2................ 25
         3.05     Payment of Facility 2 Note....................... 26
         3.06     Prepayments...................................... 26
         3.07     Calculation of Interest.......................... 26
         3.08     Use of Proceeds.................................. 27
         3.09     Commitment Fee................................... 27

ARTICLE IV        CUSTODY, INSPECTION, COLLECTION AND
                  HANDLING OF COLLATERAL AND RECORDS............... 27

         4.01     Collection of Accounts........................... 27
         4.02     Power of Attorney................................ 28
         4.03     Liability for Handling Collateral................ 28
         4.04     Custodian of Collateral.......................... 29
         4.05     Cash Collateral Account(s)....................... 29

ARTICLE V                  REPRESENTATIONS AND WARRANTIES.......... 29

         5.01     Organization, Corporate Powers, etc.............. 30
         5.02     Authorization of Loan, etc....................... 30
         5.03     Financial Statements............................. 30
         5.04     Tax Returns and Payments......................... 31
         5.05     Agreements....................................... 31
         5.06     Title to Properties and Assets, Liens, etc....... 31
         5.07     Litigation, etc.................................. 32
         5.08     Consents and Approvals........................... 32
         5.09     Enforceable Obligations.......................... 32
         5.10     Full Disclosure.................................. 32
         5.11     Hazardous Materials.............................. 33
         5.12     Outstanding Debt................................. 34

ARTICLE VI        COVENANTS OF BORROWER............................ 34

         6.01     Affirmative Covenants............................ 34







 
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         6.02     Negative Covenants............................... 40
         6.03     Financial Covenants.............................. 44

ARTICLE VII                CONDITIONS OF LENDING................... 45

A.       The First Advance......................................... 45
         7.01     Evidence of Borrower Action...................... 45
         7.02     Notes............................................ 45
         7.03     Opinion of Counsel to Borrower................... 45
         7.04     Security Agreement and Other Security Documents.. 45
         7.05     Financing Statements............................. 46
         7.06     Property and Public Liability Insurance.......... 46
         7.07     Fees............................................. 46
         7.08     Concerning the Subordinated Debt................. 46
         7.09     Other Documents.................................. 46
         7.10     Asset-Based Lending Audit........................ 47

B.       All Loans................................................. 47
         7.11     Compliance....................................... 47
         7.12     Delivery of Documents............................ 47
         7.13     Borrowing Request................................ 47
         7.14     Supplemental Opinions............................ 47
         7.15     Documentation and Proceedings.................... 48
         7.16     Required Acts and Conditions..................... 48
         7.17     Approval of Bank's Counsel....................... 48
         7.18     Pledge Agreement from Affiliates Created 
                    Post-Closing................................... 48
         7.19     Representations and Warranties................... 48
         7.20     No Default or Adverse Change..................... 49
         7.21     Loan Documents................................... 49
         7.22     Payment of Commitment Fee........................ 49
         7.23     Intercreditor Agreements......................... 49

ARTICLE VIII               EVENTS OF DEFAULT....................... 50

         8.01     Events of Default................................ 50










 
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ARTICLE IX        RIGHTS UPON DEFAULT.............................. 52

         9.01     Acceleration..................................... 52
         9.02     Right of Set-off................................. 52
         9.03     Other Rights..................................... 52
         9.04     Uniform Commercial Code.......................... 52

ARTICLE X                  MISCELLANEOUS........................... 53

         10.01    No Waiver; Cumulative Remedies................... 53
         10.02    Entire Agreement; Amendments, etc................ 53
         10.03    Addresses for Notices, etc....................... 53
         10.04    Applicable Law................................... 54
         10.05    Survival of Representations and Warranties....... 54
         10.06    Time of the Essence.............................. 55
         10.07    Headings......................................... 55
         10.08    Severability..................................... 55
         10.09    Counterparts..................................... 55
         10.10    Conflict......................................... 55
         10.11    Duration......................................... 55
         10.12    Expenses......................................... 55
         10.13    Successors and Assigns........................... 56
         10.14    Cross Defaults................................... 57
         10.15    Non-Waiver....................................... 57
         10.16    WAIVER OF TRIAL BY JURY.......................... 57








 
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EXHIBIT "A"                FORM OF FACILITY 1 NOTE................. 59
EXHIBIT "B"                FORM OF FACILITY 2 NOTE................. 60
EXHIBIT "C"                FORM OF SECURITY AGREEMENT.............. 61
EXHIBIT "D"                FORM OF LEGAL OPINION................... 62
EXHIBIT "E"                BORROWING BASE CERTIFICATE.............. 63
EXHIBIT "F"                BORROWING REQUEST....................... 64

SCHEDULE 4.07              PENDING LITIGATION...................... 65
SCHEDULE 6.01(L)           OUTSTANDING DEBT........................ 66
SCHEDULE 6.02(C)           PLACES OF BUSINESS, LOCATION OF REPAIR
                           FACILITIES AT WHICH COLLATERAL IS
                           CURRENTLY LOCATED....................... 67
SCHEDULE 6.02(F)           PERMITTED LIENS......................... 68









 
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                            REVOLVING LOAN AGREEMENT

         THIS REVOLVING LOAN AGREEMENT (the  "AGREEMENT")  made and entered into
as of December 23, 1996, by and between KELLSTROM  INDUSTRIES,  INC., a Delaware
corporation  formerly  known  as  Israel  Tech  Acquisition  Corp.  (hereinafter
referred  to as the  "BORROWER")  and BARNETT  BANK,  N.A.,  a national  banking
association (hereinafter referred to as the "BANK").

                                    RECITALS

         A.  Borrower  desires to borrow and obtain from Bank a working  capital
line  of  credit  loan  up  to  a  maximum   amount  of  NINE  MILLION   DOLLARS
($9,000,000.00) ("FACILITY 1").

         B. Borrower  desires to borrow and obtain from Bank a revolving line of
credit for acquisition of  whole-aircraft  engines up to a maximum amount of SIX
MILLION  DOLLARS  ($6,000,000.00)  ("FACILITY  2")  (Facility 1 and  Facility 2,
individually and collectively the "Loan").

         C. Bank is willing to grant the Loan upon the terms and  conditions set
forth in this Agreement.

         NOW, THEREFORE,  for and in consideration of the above premises and the
mutual  covenants  and  agreements  contained  herein,  and  for  consideration,
acknowledged to be adequate,  Borrower and Bank,  intending to be legally bound,
agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         1.01  Definitions.  For the purposes of this  Agreement,  the following
terms shall have the  respective  meanings  specified in this Section 1.01 (such
meanings to be equally  applicable  to both the singular and plural forms of the
terms defined):






 
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         "Account"  shall mean any right to payment  for goods sold or leased or
for services  rendered by Borrower  which is not  evidenced by an  instrument or
chattel paper, whether or not it has been earned by performance  including,  but
not limited to, all contract rights.

         "Account Debtor" shall mean any Person who is obligated on an Account.

         "Account Collateral  Certificate" shall mean a certificate executed and
certified  correct by an  officer of  Borrower  and in form  acceptable  to Bank
setting  forth the name and address of each Account  Debtor,  the amount owed by
each Account Debtor and the period of time said Account has been outstanding.

         "Adjusted  Base Rate" shall mean a per annum rate of  interest  that is
equal to the Base Rate (as  hereinafter  defined)  plus the Base Rate Spread (as
hereinafter defined).  The rate of interest charged under this Agreement on sums
bearing  interest at the Adjusted Base Rate shall change each time the Base Rate
is changed. Any such change in the rate of interest shall become effective as of
the opening of business on the day on which such change in the Base Rate is made
generally  effective.  A  certificate  executed  by an  officer of Bank shall be
conclusive  as to the Adjusted Base Rate but no  certificate  need be issued for
the Adjusted Base Rate to be effective hereunder.

         "Adjusted  Libor" shall mean a per annum rate of interest that is equal
to  Libor  (as  hereinafter  defined)  plus the  Libor  Spread  (as  hereinafter
defined).

         "Adjusted  Rate"  shall  mean  as  applicable,  Adjusted  Base  Rate or
Adjusted Libor.

         "Advance"  shall mean the proceeds of the Loan delivered to Borrower by
Bank pursuant to either Section 2.04 or 3.04 hereof.

         "Advance  Date"  shall  mean the  date of the  Initial  Advance  or any
Subsequent Advance under this Agreement.

         "Affiliate"  shall mean any Person directly or indirectly  controlling,
controlled  by, or under  direct  or  indirect  common  control  with  Borrower,
including a  Subsidiary.  A Person shall be deemed to control a  corporation  if
such Person possesses,  directly or



                                      -2-




 
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indirectly,  through the  ownership of Voting  Stock,  by contract,  management,
understanding,  relationship,  or  otherwise,  the  power to direct or cause the
direction of the management and policies of such corporation.

         "Assets"  shall  mean  all  property,  real or  personal,  tangible  or
intangible in which the Borrower has any legal, beneficial or other interest.

         "Authorized  Representative" shall mean an officer,  member, partner or
other  representative  of an entity who is  authorized  to  execute  agreements,
documents,  or  certifications  on behalf of such entity and  authorized to make
decisions,  institute litigation, and take all other necessary actions on behalf
of such entity.

         "BankAtlantic" shall mean BankAtlantic, a federal savings bank.

         "BankAtlantic  Loan"  shall  mean  the loan  extended  to  Borrower  by
BankAtlantic and evidenced by the loan agreement and related  documents dated as
of June 22,  1994,  as  amended,  and  secured by a mortgage  on the  Borrower's
primary place of business.

         "Base Rate" shall mean the Prime Rate.

         "Base Rate Interest Period" shall mean for each Base Rate Portion,  one
month.

         "Base Rate Loan" shall mean that portion of the  outstanding  principal
balance of the Loan for which the interest rate is the Adjusted Base Rate.

         "Base  Rate  Portion"  shall  mean  that  portion  of  the  outstanding
principal  balance of the Loan which is not  included  in any Libor  Portion (as
hereinafter defined).

         "Base Rate  Spread"  shall mean that number of basis points (one eighth
of one Percent (1/8%)) to be subtracted from the Base Rate.

         "Borrowing  Base"  shall  mean the  assets of  Borrower  against  which
Advances  may be made,  as  calculated  according  to the  formulas set forth in
Sections 2.02 and 3.02 hereof.




                                      -3-



 
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         "Borrowing Base Certificate"  shall mean,  collectively,  a certificate
executed with respect to Facility 1 and a  certificate  executed with respect to
Facility 2, each  certificate  certified  as being true and correct by the chief
financial officer or other Authorized Representative of Borrower,  setting forth
the  calculations  leading to, as well as the amount of, the relevant  Borrowing
Base (as further  described in Sections 2.02 and 3.02) and including a statement
that Borrower is in full  compliance  with all  provisions of the Loan Documents
(including without limitation all financial covenants and conditions),  the form
of which certificate shall be substantially similar to Exhibit E hereto.

         "Borrowing  Request"  shall  mean a  request  for a Loan in the form of
Exhibit "F" attached hereto.

         "Business Day" shall mean a day other than a Saturday,  Sunday or other
day on which commercial banks in the State of Florida are authorized or required
by law to close.

         "Capital  Funds"  shall  mean  the  sum  of  Tangible  Net  Worth  plus
Subordinated Debt.

         "Capital  Funds  Ratio"  shall  mean the  ratio of all  liabilities  of
Borrower less  Subordinated  Debt divided by Capital Funds as of any  particular
date.

         "Capitalized  Lease  Obligations"  shall  mean all  rental  obligations
which,  under GAAP,  are or will be required  to be  capitalized  on the balance
sheet of Borrower.

         "Cash   Collateral   Account(s)"   shall  mean  Borrower's   account(s)
established with Bank, which account(s)  shall,  unless and until the occurrence
of an Event  of  Default,  constitute  the  primary  depository  account(s)  for
payments  received by Borrower on Accounts under Facility 1 and Facility 2. Upon
the occurrence of an Event of Default,  the Cash  Collateral  Account(s) may, at
Bank's sole discretion, be replaced with a lockbox/lockboxes established at Bank
to receive payments under Facility 1 and Facility 2.



                                      -4-



 
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         "Cash Flow" means,  for any fiscal period,  the difference  between the
gross cash  receipts  and the total amount of gross cash  payments  arising from
operating activities as determined in accordance with GAAP.

         "Chattel  Paper" shall mean a writing or writings which evidence both a
monetary obligation and a security interest in or a lease of specific goods.

         "Closing Date" shall mean December 23 1996.

         "Collateral" shall mean and include:

                  (a) all Accounts, contract rights, Instruments, Chattel Paper,
Documents,  Equipment  and General  Intangibles  of Borrower  including all bank
accounts  in which  Borrower  has  deposited  proceeds  of any  Collateral,  all
patents,  trademarks  and  trade  names,  files,   correspondence,   advertising
programs,  customer  lists,  all monies  becoming due Borrower  from any sale of
Collateral on account of rebates,  warranty service, or bonuses; all amounts due
under and all rights  under any letters of credit for the benefit of Borrower or
in which the Borrower has rights;

                  (b) any other  obligations  or  indebtedness  owed to Borrower
from whatever source arising;

                  (c) all rights of Borrower to receive any payments in money or
in kind;

                  (d) all of Borrower's right, title and interest in and to, and
all  of  Borrower's  rights,  remedies,  security  interests  and  liens  under,
guaranties  or  other  contracts  of  suretyship,  security  therefor,  security
agreements,  deposits,  leases  or other  agreements  or  property  securing  or
relating to any of the items referred to in subparagraph  (a) hereof or acquired
for the purpose of securing and enforcing any of such items;

                  (e) all of Borrower's  right,  title, and interest in and with
respect  to the goods,  services,  or other  property  that gave rise to or that
secure any of the  foregoing  and insurance  policies  relating  thereto (to the
extent such  collateral  constitutes  part of the  Borrowing  Base),  and all of
Borrower's rights as an unpaid seller of goods and



                                      -5-



 
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services,  including,  but not  limited  to, the rights of  stoppage in transit,
replevin, reclamation, repossession, and resale;

                  (f) all Inventory now owned or hereafter  owned or acquired by
Borrower,  wherever located, whether in possession of a seller and identified to
a contract of sale between a seller and Borrower,  in transit from the seller to
Borrower, in transit from Borrower to a purchaser, or being returned to Borrower
from any purchaser, on Borrower's premises or elsewhere,  all contractual rights
to purchase  inventory,  all shipping  invoices,  bills of lading, and warehouse
receipts  covering such inventory,  all Eligible  Finished Goods Inventory,  all
Robert A. Ware  Materials,  work in process  and other  materials  to be used or
consumed in Borrower's business;

                  (g) all instruments, documents, securities, cash, and property
owned by  Borrower  or in which  Borrower  has an  interest  (except as to which
accounts  Borrower is trustee),  which now or  hereafter  are at any time in the
possession  or  control  of Bank or in  transit  by mail or carrier to or in the
possession  of any third  party  acting on  behalf  of Bank,  without  regard to
whether  Bank  received  the  same in  pledge,  for  safekeeping,  as  Bank  for
collection  or  transmission  or  otherwise  or whether  Bank had  conditionally
released the same, and all of Borrower's deposits,  accounts, balances, sums and
credits with, and all of Borrower's claims against, Bank;

                  (h) all Books and Records including  computer records,  files,
directories, tapes and programs;

                  (i) all other  property and money of Borrower now or hereafter
in the possession, custody or control of Bank;

                  (j) all of the  foregoing,  whether  now owned or  existing or
hereafter created or acquired by Borrower; and

                  (k)      proceeds and products of all such Collateral.

         "Commitment  Fee" shall mean  $15,000.00  for Facility 1 and $10,000.00
for Facility 2.



                                      -6-



 
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         "Current Assets" shall mean those assets which in the regular course of
business of Borrower  and its  Subsidiaries  on a  consolidated  basis,  will be
readily and quickly  realized or converted  into cash,  all in  accordance  with
GAAP,  within  the  applicable  accounting  or time  period  together  with such
additional  assets as may readily be converted  into cash without  impairing the
business  of  Borrower  or any of its  Subsidiaries,  and  shall  include  cash,
temporary investments,  receivables, inventories and prepaid expenses, but shall
exclude all inter-company assets between Borrower and such Subsidiaries.

         "Current  Liabilities" shall mean those liabilities of Borrower and its
Subsidiaries on a consolidated  basis, or any portion  thereof,  the maturity of
which will not extend beyond one year from the date said  determination is to be
made,  but excluding all  inter-company  Liabilities  between  Borrower and such
Subsidiaries.

         "Current Ratio" shall mean, for the applicable period, the ratio of (i)
Borrower's Current Assets to (ii) Borrower's Current Liabilities.

         "Day"  shall  mean  a  calendar  day,  unless  the  context   indicates
otherwise.

         "Debt" means (i)  indebtedness  for borrowed  money or for the deferred
purchase price of property or services,  (ii) obligations as lessee under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases, and (iii) obligations under direct or indirect  guaranties in respect of
indebtedness  or obligations of others of the kinds referred to in clause (i) or
(ii) above.

         "Debt Service Coverage Ratio" shall mean for the applicable  period, as
to Borrower, the ratio set forth in Section 6.03(c).

         "Default"  shall mean any event or condition  which with the passage of
time or giving of notice, or both, would constitute an Event of Default.

         "Default  Rate" shall mean the highest rate of interest  permitted from
time to time by applicable law.



                                      -7-



 
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         "Document"  shall mean a bill of lading,  dock  warrant,  dock receipt,
warehouse  receipt  or order  for the  delivery  of  goods,  and also any  other
document  which,  in the regular course of business or financing,  is treated as
adequately  evidencing  that the  person  in  possession  of it is  entitled  to
receive, hold and dispose of the document and goods it covers.

         "Dollars" shall mean lawful money of the United States of America.

         "Due Date"  shall mean the date any payment of  principal,  interest or
any other amount is due and payable on the Loan or the Notes.

         "Eligible  Accounts" shall mean the net amount of Accounts  outstanding
after  eliminating  from the  aggregate  amount of  outstanding  Accounts,  such
Accounts as to which more than 90 days have elapsed since the invoice date,  and
eliminating:

                  (a) all Accounts  arising from sales or services to any single
account  debtor,  more than ten  percent  (10%) of whose  Accounts  owing to the
Borrower remain unpaid more than 90 days after the invoice date,

                  (b) all Accounts arising from sales or services to any account
debtor affiliated with the Borrower,

                  (c) the amount by which  Accounts  existing as of any point in
time during the  duration of the Loan  arising from sales or services to any one
account debtor exceed 20% of the  Borrower's  Tangible Net Worth as of such time
(unless such Accounts are otherwise approved by Bank, in its sole discretion),

                  (d) all U.S.  Government  account  receivables as to which the
Borrower has failed to execute such  instruments  and take all steps required by
Bank in order  that all  monies  due and to  become  due  thereunder  have  been
assigned to Bank and notice thereof given to the applicable  department,  agency
and/or  instrumentality  of the  United  States  Government  under  the  Federal
Assignment of Claims Act, as same may be amended from time to time,




                                      -8-



 
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                  (e) (as to Domestic  Accounts but not as to Foreign  Accounts)
all  Accounts  arising  from  sales or  services  to Account  Debtors  primarily
conducting business in foreign countries, and

                  (f) those Accounts  excluded because of the credit  worthiness
of any  account  debtor and  deducting  from the  aggregate  face  amount of the
remaining Accounts all payments, adjustments,  allowances, deductions, discounts
and credits  applicable  thereto and all amounts due thereon  considered  by the
Bank  difficult  to collect  or  uncollectible  by reason of return,  rejection,
repossession, loss or damage of or to the merchandise giving rise thereto, which
determination shall be final and binding upon the Borrower.

         This list is non-inclusive. The Advance Formula is at all times subject
to the  right of the Bank to  modify  it based on  findings  of its  Asset-Based
Lending audits and the Bank's sole judgment.

         "Eligible  Domestic  Account" shall mean Eligible Accounts arising from
sales within the United States.

         "Eligible  Foreign  Accounts" shall mean Eligible Accounts arising from
sales or services to Account Debtors  primarily  conducting  business in foreign
countries whether or not supported by an irrevocable  Letter of Credit issued in
favor of Borrower.

         "Equipment"  shall mean all goods used or bought for use  primarily  in
the business of Borrower that are not included in the definition of Inventory.

         "Events of  Default"  shall mean the  events of  default  specified  in
Article Eight of this Agreement.

         "FAA" shall mean the Federal Aviation  Administration  or any successor
agency.

         "FAA-certified  Overhauled  Parts  Inventory" shall mean those items of
Inventory that have accumulated zero hours and cycles since their  refurbishment
and  re-certification  by an FAA-certified  repair station and were purchased by
Borrower  less than two years  previous to the date of an Advance  against  such
items.



                                      -9-



 
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         "Facility  1"  shall  mean  a  $9,000,000.00   commercial  asset  based
revolving line of credit for working capital.

         "Facility  1 Note"  shall mean the demand  promissory  in the  original
principal amount of $9,000,000.00 evidencing Facility 1.

         "Facility  2"  shall  mean  a  $6,000,000.00   commercial  asset  based
revolving line of credit for acquisition of Whole Aircraft Engines.

         "Facility  2 Note"  shall mean the demand  promissory  in the  original
principal amount of $6,000,000.00 evidencing Facility 2.

         "Financing  Statement"  shall mean all financing  statements  permitted
under the UCC or any other state law for the purpose of perfecting  the security
interest  in the  Collateral  granted by  Borrower  to Bank  under the  Security
Agreement  (the "Security  Interest"),  and shall include  (without  limitation)
financing  statements to be filed in the States of California and Florida or any
other state against Borrower as debtor.

         "GAAP" shall mean those generally  accepted  accounting  principles and
practices  which are  recognized as such by the American  Institute of Certified
Public  Accountants  acting  through its Accounting  Principles  Board or by the
Financial  Accounting  Standards  Board or through other  appropriate  boards or
committees thereof.

         "General  Intangibles"  shall  mean any  personal  property  (including
things in action) other than goods,  Accounts,  Chattel Paper,  Instruments  and
money,  and shall  include,  but not be  limited  to,  tax  refunds,  returns of
insurance premiums and customer lists.

         "Hazardous Materials" shall mean materials defined as "hazardous waste"
under the Federal Resource Conservation and Recovery Act and similar state laws,
or as  "hazardous  substances"  under the  Federal  Comprehensive  Environmental
Response,  Compensation and Liability Act and similar state laws, and any solid,
semi-solid, liquid or gaseous substances which are toxic, ignitable,  corrosive,
carcinogenic  or otherwise  dangerous to human,  plant or animal health and well
being.



                                      -10-



 
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         "IASI"  shall mean IASI Inc, a Delaware  corporation  and wholly  owned
subsidiary of Borrower.

         "IASLP" shall mean International  Aircraft Support,  L.P., a California
limited partnership, as further described in Section 7.09 hereof.

         "Initial  Advance" shall mean the initial  delivery of a portion of the
proceeds of the Loan pursuant to the terms hereof on or after the Closing Date.

         "Initial  Advance  Date" shall mean the date on which the first Advance
is made under the Loan.

         "Instruments"  shall mean a negotiable  instrument or a security or any
other  writing which  evidences a right to the payment of money  (whether or not
negotiable)  and is not itself a security  agreement or a lease and is of a type
which is in the ordinary  course of business  transferred  by delivery  with any
necessary indorsement or assignment.

         "Intangible  Assets"  shall  mean  those  assets  of  Borrower  and its
Subsidiaries  on a consolidated  basis which,  in accordance  with GAAP, are not
Tangible Assets and shall include,  but not be limited to, patents,  copyrights,
trademarks,  trade  names,  franchises,  good will,  covenants  not to  compete,
experimental  expenses and other  similar  assets which would be  classified  as
"intangible assets" under GAAP.

         "Inventory"  shall mean all Parts  Inventory,  Whole Aircraft  Engines,
goods, merchandise,  and other personal property now owned or hereafter owned or
acquired by Borrower  that are held for sale or lease or that are  possessed for
sale or lease,  or that are furnished or are to be furnished  under any contract
of service or are raw materials,  work-in-process,  supplies,  finished goods or
materials  used or  consumed  in  Borrower's  business,  and all other  tangible
property now owned or hereafter acquired and held for sale or lease or furnished
or to be furnished  under contracts of service or used or consumed in Borrower's
business,  and  all  products,   substitutions,   replacements,   additions,  or
accessions for or to any of the foregoing.




                                      -11-



 
<PAGE>

<PAGE>


         "Inventory  Collateral  Certificate" shall mean a certificate  executed
and  certified as correct by an officer of Borrower in form  acceptable  to Bank
setting forth  information  concerning  descriptions,  quantities,  costs,  fair
market value and the location of all Inventory.

         "Inventoried  Engines" shall mean Whole Aircraft Engines that are owned
by the Borrower and are held as Inventory for sale or lease.

         "Leased  Engines" shall mean Whole  Aircraft  Engines that the Borrower
owns but are,  at the time of such  classification,  subject  to leases to third
parties.

         "Liabilities"  shall mean all  liabilities and obligations of Borrower,
or all  liabilities  and  obligations  of  Borrower  and its  Subsidiaries  on a
consolidated  basis,  as the  case  may be,  and  shall  include  Long  Term and
Contingent  Liabilities and/or Current  Liabilities,  as the case may be, all as
determined in accordance with GAAP.

         "Libor"  shall mean the annual rate of interest  displayed  on Telerate
page 3750 (or such other page as may replace  such page on that  service for the
purpose of  displaying  interest  rates at which Dollar  deposits are offered by
prime  banks in the London  interbank  market) as quoted by Bank to banks in the
London  interbank  market as of 10:00 a.m. New York time two (2)  Business  Days
before the first day of the relevant Libor Interest  Period,  divided by one (1)
minus the Libor  Reserve  Percentage.  If Telerate  ceases to quote Libor at any
time during the  duration  of the Loan,  then at Bank's  option,  Libor shall be
determined  by  reference  to (i) the rate of Libor  interest  quoted as such by
another financial information data service or publication reasonably selected by
Bank or (ii) the arithmetic  mean of the interest rates at which Dollar deposits
are offered to certain Libor  reference  banks (to be  reasonably  designated by
Bank) in the London  interbank  market,  for the relevant Libor Interest Period.
Each Libor  quotation  shall be for a period of time equal or  comparable to the
Libor Interest  Period selected by Borrower and in an amount equal or comparable
to the principal  amount of the Libor Portion to which the Libor Interest Period
relates.  Each  determination  by Bank of the  Libor  shall  be  conclusive  and
binding.

         "Libor  Interest  Period" shall mean for each Libor  Portion,  a period
from the date of  commencement  of the Adjusted Libor on the subject  portion of
the outstanding



                                      -12-



 
<PAGE>

<PAGE>


principal  balance of the Loan to the day which  shall  occur 30, 90 or 180 days
after the date of such  commencement,  as selected by Borrower  pursuant to this
Agreement.  However,  if the  last  day of  such  Libor  Interest  Period  would
otherwise  occur on a day which is not a  Business  Day,  such last day shall be
extended to the next succeeding  Business Day unless such extension would extend
the maturity date of such Libor  Interest  Period or cause the last day to occur
in a new calendar  month,  in which event such last day shall be the immediately
preceding Business Day.

         "Libor  Portion" shall mean each portion of the  outstanding  principal
balance  of the Loan on which,  as a result of  Borrower's  election  hereunder,
Borrower is being charged interest at the  corresponding  Adjusted Libor for the
corresponding  Libor  Interest  Period.  Each Libor  Portion must be an integral
multiple of $250,000.00 and be not less than $1,000,000.00.

         "Libor  Reserve  Percentage"  shall mean for any day,  that  percentage
(expressed as a decimal) that is in effect on such day for  determining  maximum
reserve requirements, including without limitation: (i) any basic, supplemental,
marginal,  or  emergency  reserve  under  any  regulations  of any  governmental
authority,  domestic or foreign,  having  jurisdiction with respect thereto;  or
(ii) any applicable  reserve prescribed by the Board of Governors of the Federal
Reserve  System  (or  any  successor)  for   determining   the  maximum  reserve
requirement  for a member  bank of the Federal  Reserve  System in New York City
with  deposits   exceeding   $5,000,000,000.00   in  respect  of  "Euro-currency
liabilities" (or in respect of any other category of liabilities  which includes
deposits  by  reference  to  which  the  interest  rate  on  Libor  Portions  is
determined,  or any category of extensions of credit which  includes  loans by a
non-United  States  office of a member of the Federal  Reserve  System to United
States  residents).  After such  calculation,  Libor shall be adjusted up to the
next highest 1/16th of one percent.

         "Libor Spread" shall be 275 basis points (2.75%).

         "Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien,  or charge of any kind and  shall  include,  but not be  limited  to,  any
agreement to give any of the  foregoing,  any  conditional  sales or other title
retention  agreements,  or any lease in the  nature  thereof,  the  filing of or
agreement to give any financing statement under



                                      -13-



 
<PAGE>

<PAGE>



the UCC of any jurisdiction, the lien of a lien creditor defined in the UCC, and
the lien of a statutory lienor.

         "Loan  Documents"  shall mean this Agreement,  the Notes, the Financing
Statement,  the Security Agreement,  the other security documents, any Borrowing
Base  Certificate,  Account  Collateral  Certificate,  and Inventory  Collateral
Certificate  and  Officer's   Certificate  and  all  of  the  other   documents,
agreements,  certificates,  schedules,  notes, statements and opinions,  however
described,  referenced  herein or executed or  delivered  pursuant  hereto or in
connection  with or arising with the Loans or the  transactions  contemplated by
this Agreement.

         "Long Term and Contingent  Liabilities"  shall mean and include without
duplication:

                  (i) any  liability  or  obligation  payable more than one year
from the date of creation thereof (including any secured by any Lien on property
owned by Borrower or any  Subsidiary),  which under GAAP is shown on the balance
sheet as a liability  (including  Capitalized Lease  Obligations,  but excluding
reserves  for deferred  income taxes and other  reserves to the extent that such
reserves do not constitute an obligation); and

                  (ii)  guarantees,  endorsements  (other than  endorsements  of
negotiable  instruments for collection in the ordinary course of business),  and
other contingent liabilities (whether direct or indirect) in connection with the
obligations, stock, or dividends of any Person; both as determined in accordance
with GAAP.

         "New Parts  Inventory"  shall mean those items of  Inventory  that have
accumulated  zero hours and cycles  since their  original  manufacture  and were
purchased by Borrower  less than two years prior to the date on which an Advance
is made against such items.

         "Net Profit" shall mean, with respect to any fiscal period,  net income
of Borrower and its  Subsidiaries  on a consolidated  basis after taxes for that
fiscal period, exclusive of extraordinary items.



                                      -14-



 
<PAGE>

<PAGE>




         "Notes"  shall  mean  Borrower's  promissory  note or notes  evidencing
Facility 1 in the form of Exhibit "A" attached hereto,  and any and all allonges
thereto,  and any and all  extensions,  renewals  or  modifications  thereof and
Facility 2 in the form of Exhibit "B" attached hereto,  and any and all allonges
thereto, and any and all extensions, renewals or modifications thereof.

         "Obligations",  with respect to Borrower,  shall mean, individually and
collectively, the payment and performance duties, obligations and liabilities of
Borrower to Bank evidenced by the Notes and the other Loan  Documents,  together
with all  accrued  but  unpaid  interest  thereon,  and all  other  payment  and
performance duties,  obligations and liabilities of Borrower to Bank, whether or
not presently  contemplated by Borrower or Bank,  however and whenever incurred,
acquired  or  evidenced,  whether  primary  or  secondary,  direct or  indirect,
absolute  or  contingent,  sole or joint and  several,  or due or to become due,
including,  without limitation,  all such duties, obligations and liabilities of
Borrower  to Bank,  under  and  pursuant  to this  Agreement,  the Notes and the
Security Documents and all renewals, modifications or extensions of any thereof.

         "Officer's  Certificate" shall mean a certificate signed in the name of
Borrower by its  President,  one of its Vice  Presidents,  its  Treasurer or its
chief financial officer.

         "Opinion"   shall  mean  the  legal  opinion  of  counsel  to  Borrower
substantially  in the  form of  Exhibit  "D"  attached  hereto,  which  shall be
satisfactory to Bank.

         "Parts  Inventory"  shall  mean  New  Parts  Inventory,   FAA-certified
Overhauled Parts Inventory,  Serviceable  Parts Inventory,  and Repairable Parts
Inventory.

         "Permitted  Liens" shall mean those Liens in or upon the  Collateral as
further  described in Section  6.02(f) hereof and set forth in Schedule  6.02(f)
attached hereto.

         "Permitted  Loan" shall mean,  individually and  collectively,  (i) the
BankAtlantic Loan, (ii) the unsecured,  non-interest-bearing note payable to the
former owner of the Borrower (the "Kellstrom Loan"), having a present balance as
of the date of this Agreement of $1,755,150, (iii) the existing loan to IASLP by
Union Bank of  California  secured  by liens on the assets of IASLP (the  "IASLP
Existing  Loan"),  which loan is  contemplated  to remain in existence after the
acquisition by IASI of the assets of




                                      -15-



 
<PAGE>

<PAGE>



IASLP, and (iv) the  Subordinated  Loans. A loan described in clause (iv) herein
shall not be a Permitted Loan if,  immediately after said loan,  Borrower is not
in compliance with all the terms and conditions of this  Agreement,  and if Bank
has not received prior written notice of such loan.

         "Person" shall mean any individual, joint venture,  partnership,  firm,
corporation, trust, unincorporated organization or other organization or entity,
or a governmental  body or any department or agency  thereof,  and shall include
both the singular and the plural.

         "Place  of  Business"   shall  mean  any  location  in  which  Borrower
undertakes  its  business,  including,  but  not  limited  to,  the  storage  of
Inventory, all as set forth in Schedule 5.02(c) attached hereto.

         "Plan" shall mean an employee  benefit plan or other plan and any trust
created  thereunder  which has been  established  or  maintained or hereafter is
established  or maintained  for employees of Borrower and covered by Title IV of
the Employee  Retirement Income Security Act of 1974, as amended,  including the
rulings and regulations  issued  thereunder or pursuant  thereto  ("ERISA"),  or
subject to the minimum  funding  standards  under  Section  412 of the  Internal
Revenue Code of 1986, as amended (the "IRS Code").

         "Prime Rate" shall mean the annual rate of interest announced from time
to time by Barnett Bank,  N.A., as the prime rate (which interest rate is only a
reference rate for the information  and use of Bank in  establishing  the actual
rates to be charged to its  borrowers and which is purely  discretionary  and is
not necessarily the best or lowest interest rate charged to borrowing  customers
of Barnett Bank, N.A.).

         "Proceeds"  shall mean  whatever is received  upon the sale,  exchange,
collection or other  disposition of the Collateral or Proceeds,  whether cash or
non-cash, including, but not limited to, insurance proceeds.

         "Property" shall mean any Place of Business of Borrower owned or leased
by Borrower or a Subsidiary (as further described in Section 5.11 hereof).




                                      -16-



 
<PAGE>

<PAGE>


         "Records"  shall  mean all  books,  records,  ledger  cards or  sheets,
customer lists, files, documents and instruments including,  but not limited to,
computer programs,  files,  directories,  programs,  tapes, software and related
electronic  data  processing  software,  and  all  other  property  and  General
Intangibles evidencing an interest in or relating to Collateral.

         "Repairable  Parts Inventory"  shall mean items of FAA-certified  Parts
Inventory  that have no useful life  remaining and were  purchased less than one
(1) year prior to the date of an Advance against such items.

         "Revolving  Period"  shall mean the period  during  which  Borrower may
obtain Advances under the Loan. The Revolving  Period shall commence on the date
hereof,  and shall end on the  earliest of (i) an Event of Default,  (ii) demand
(plus,  in the case of demand  made in the  absence  of a default or an Event of
Default,  90 days),  and (iii) April 30, 1998.  The Loan shall be  automatically
renewed for  additional  one-year  periods  unless Bank or Borrower  shall have,
within 90 days before the  applicable  April 30,  provided  the other party with
notice of its intention to terminate the Loan. Upon such renewal, the definition
of "Revolving  Period" shall be  understood to include such  additional  renewal
period.

         "Security  Agreement"  shall mean the  security  agreement  of Borrower
granting a security interest to Bank in the Collateral substantially in the form
of Exhibit "C" attached hereto.

         "Security  Documents" shall mean the Security Agreement,  and all other
documents, agreements,  mortgages,  assignments,  filings, financing statements,
certificates  of title,  notices,  returns and other  security  instruments  and
records, however described or denominated, now or hereafter created or existing,
pledging or evidencing any pledge of any property or assets,  however described,
to secure any or all of the Obligations.

         "Serviceable   Parts  Inventory"  shall  mean  items  of  FAA-certified
Overhauled  Parts Inventory that have hours and cycles remaining in their useful
life and were  purchased  less than one (1) year prior to the date of an Advance
against such items.



                                      -17-



 
<PAGE>

<PAGE>



         "Stockholder" shall mean any Person owning stock of Borrower.

         "Subordinated Loan" shall mean, individually and collectively,  (a) the
senior/subordinated  debt  contemplated to be incurred by Borrower in connection
with the  contemplated  acquisition  (through IASI) of the assets of IASLP (such
debt, the "ACQUISITION  LOAN"),  and (b) other indebtedness of Borrower (whether
in the form of loans,  guarantees  or leases or any  other  form),  which  other
indebtedness is up to the amount of $100,000 on an annual basis.

         "Subsequent  Advances" shall mean  individually  and  collectively  all
Advances hereunder after the initial Advance.

         "Subsidiary" shall mean any corporation,  limited liability company, or
partnership whether now existing or hereafter created or acquired, fifty percent
(50%) or more of the voting stock,  membership or partnership interests of which
is owned, directly or indirectly, by Borrower, and shall include subsidiaries of
a Subsidiary.

         "Tangible   Assets"   shall  mean  the  assets  of  Borrower   and  its
Subsidiaries on a consolidated basis, all as determined in accordance with GAAP,
but excluding Intangible Assets.

         "Tangible Net Worth" shall mean paid-in capital plus retained  earnings
plus loans from stockholders plus Subordinated Debt, less any intangible assets.

         "UCC" shall mean the Uniform Commercial Code as adopted in any relevant
jurisdiction, as amended.

         "Whole Aircraft Engines" shall mean aircraft engines that have not been
disassembled  into their parts, and shall include both (i) aircraft engines that
are part of the inventory of Borrower ("INVENTORIED ENGINES"), and (ii) aircraft
engines  that are under lease by Borrower to a lessee  ("LEASED  ENGINES").  For
purposes of the Loan, "Whole Aircraft Engines" shall mean only those Inventoried
Engines and Leased Engines which are located in the United States. *An appraisal
shall be  performed  as to each Whole  Aircraft  Engine at  Borrower's  expenses
within 30 days after its acquisition by the Borrower.




                                      -18-



 
<PAGE>

<PAGE>


         "Working  Capital" shall mean the excess of Current Assets over Current
Liabilities.

         1.02  Accounting  Terms.  All  accounting  terms used  herein  shall be
construed in accordance  with GAAP (unless such terms are  specifically  defined
otherwise herein) consistently applied and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with GAAP.

                                   ARTICLE II

                         AMOUNTS AND TERMS OF FACILITY 1

         2.01  Facility 1. Bank  agrees  from time to time during the  Revolving
Period  to  lend to  Borrower,  upon  Borrower's  request,  up to the  aggregate
principal amount of the Borrower Base for Facility 1 (as defined hereinafter) on
the terms and conditions set forth herein. During the Revolving Period, Borrower
shall be entitled  to receive  the entire  proceeds of Facility 1 in one or more
Advances pursuant to Section 2.04 hereof,  except as otherwise  specifically set
forth in this  Agreement.  Advances  under  Facility 1 shall be evidenced by the
Facility 1 Note.  After the expiration of the Revolving  Period,  Borrower shall
not be  entitled  to  receive  any  Subsequent  Advance.  Facility  1 shall be a
revolving  loan and  Borrower may borrow up to the maximum  principal  amount of
Facility 1, repay all or any portion of such principal amount of Facility 1, and
reborrow  up to  such  maximum  principal  amount,  subject  to  the  terms  and
conditions set forth herein.

         2.02  Borrowing  Base for Facility 1. The Borrowing Base for Facility 1
shall be as follows:

                  (a)      80% of Eligible Domestic Accounts;

                  (b)      70% of Eligible Foreign Accounts;

                  (c)      65%   of  New  Parts   Inventory  and   FAA-certified
Overhauled  Parts Inventory; and




                                      -19-



 
<PAGE>

<PAGE>



                  (d)     50% of  Serviceable  Parts  Inventory  and  Repairable
Parts   Inventory,   provided  that  Advances   secured  by   Serviceable  Parts
Inventory and Repairable  Parts  Inventory  collectively   shall  not exceed One
Million Dollars ($1,000,000.00) at any time during the duration of the Loan.

         In no event shall the aggregate of all Advances outstanding against New
Parts Inventory,  FAA-certified  Overhauled Parts Inventory,  Serviceable  Parts
Inventory and Repairable Parts Inventory at any one time under Facility 1 exceed
Seven Million Dollars ($7,000,000.00).

         The value of the Parts Inventory shall be based upon either the cost to
Borrower of said Parts  Inventory  or the market  value  thereof,  whichever  is
lower,  after  deducting an amount or percentage for slow moving and/or obsolete
Parts Inventory,  such amount or percentage to be determined by Bank in its sole
discretion.

         2.03  Facility 1 Note.  The advances  made by Bank  pursuant to Section
2.01 herein  shall be  evidenced  by the  Facility 1 Note in form and  substance
acceptable to Bank,  and payable to the order of Bank. The Facility 1 Note shall
be deemed to reflect the aggregate  unpaid  principal amount of all indebtedness
to Bank under  Facility 1, whether or not the face amount of the Facility 1 Note
is in excess of the amount actually  outstanding  from time to time, and whether
or not the Indebtedness  outstanding  thereunder is from time to time repaid and
reborrowed.

         THE PARTIES ACKNOWLEDGE AND AGREE THAT DEMAND FOR PAYMENT OF FACILITY 1
         MAY  BE  MADE  BY  THE  BANK  AT  ANY  TIME  IN  ITS  SOLE  DISCRETION,
         NOTWITHSTANDING  ANYTHING TO THE  CONTRARY IN THE FACILITY 1 DOCUMENTS.
         WITHOUT LIMITING IN ANY WAY THE BANK'S DISCRETION  REGARDING FACILITY 1
         AND  REPAYMENT  THEREOF,  THE  BORROWER  IS MAKING THE  AGREEMENTS  AND
         COVENANTS SET FORTH IN THIS AGREEMENT. THE BORROWER HEREBY ACKNOWLEDGES
         AND AGREES THAT ALL SUCH AGREEMENTS AND COVENANTS ARE MADE SOLELY AS AN
         INDUCEMENT TO THE BANK TO ESTABLISH  DEMAND  FACILITY 1 AND TO MAKE THE
         LOAN  CONTEMPLATED  HEREUNDER  AND  SHALL  NOT IN ANY WAY



                                      -20-



 
<PAGE>

<PAGE>



         RESTRICT OR COMPROMISE THE BANK'S DISCRETIONARY RIGHT TO DEMAND PAYMENT
         UNDER THE NOTE OR THE  BORROWER'S  OBLIGATION TO MAKE PAYMENT UPON SUCH
         DEMAND. FURTHER,  BORROWER ACKNOWLEDGES AND AGREES THAT NO EXTENSION OF
         THE  DURATION  OF FACILITY 1 OR  FORBEARANCE  OF FAILURE BY BANK OF ITS
         RIGHT TO DEMAND  PAYMENT OR TO ENFORCE ANY OF ITS RIGHTS UNDER FACILITY
         1 SHALL AFFECT BANK'S RIGHT IN ITS SOLE DISCRETION TO DEMAND PAYMENT OF
         FACILITY  1 AT ANY  TIME OR THE  BORROWER'S  OBLIGATION  TO  MAKE  SUCH
         PAYMENT UPON SUCH DEMAND.

         2.04 Advance of Proceeds of Facility 1. On the Initial Advance Date and
on Subsequent  Advance  Dates,  upon initial and continued  satisfaction  of the
conditions  precedent  set forth in  Article  Seven  hereof,  Borrower  shall be
entitled to receive Advances. Borrower shall give Bank written notice, signed by
an officer of Borrower authorized by the borrowing resolutions, of any requested
Advance  hereunder.  Such notice shall  specify the proposed date of the Advance
and the amount thereof.  Each request for an Advance shall  constitute,  without
the necessity of specifically  containing a written statement,  a representation
and  warranty  by  Borrower  that no Default or Event of  Default  exists,  that
Borrower is in compliance  with all the  conditions of the Loan  Documents,  and
that all representations and warranties  contained in any Loan Document are true
and  correct  on and as of the date the  requested  Subsequent  Advance is made.
Requests by Borrower for any Subsequent  Advance  hereunder on any date shall be
in the minimum  principal  amount of  Twenty-five  Thousand  and No/100  Dollars
($25,000.00).

         2.05  Interest  Rate;  Payment of Facility 1 Note.  Borrower  shall pay
interest  on the  outstanding  principal  balance of the  Facility 1 Note at the
Adjusted Base Rate on the Base Rate Portion,  and at the corresponding  Adjusted
Libor on each  Libor  Portion,  according  to the  terms and  provisions  of the
Facility 1 Note.

         2.06  Prepayments.  Borrower  may at any time prepay all or any part of
the principal amount of Facility 1 outstanding without penalty.  Each prepayment
other than full  payment  shall be in the minimum  amount of Fifty  Thousand and
No/100



                                      -21-



 
<PAGE>

<PAGE>



Dollars ($50,000.00) and shall be made prior to 2:00 P.M. (Fort Lauderdale time)
on a Business Day in immediately available funds.

         2.07  Calculation  of  Interest.  Any interest due on Facility 1 or any
other  Obligations  shall be  calculated on the basis of a year  containing  360
days, to the extent accrued as of midnight on the last day immediately  prior to
each  interest  payment  date.  Notwithstanding  anything  herein or in any Loan
Document  to the  contrary,  the  sum of all  interest  and  all  other  amounts
reserved,  charged,  or taken by Bank as  compensation  for fees,  services,  or
expenses incidental to the making, negotiation, or collection of Facility 1 that
would be deemed  interest  under  Florida or other  applicable  law which may be
collected by Bank hereunder  shall not exceed the maximum  lawful  interest rate
permitted by such law from time to time. Bank and Borrower intend and agree that
under no circumstance shall Borrower be required to pay interest on the Facility
1 or on any other  Obligations at a rate in excess of the maximum  interest rate
permitted  by  applicable  law from  time to  time,  and in the  event  any such
interest is received or charged by Bank in excess of that rate,  Borrower  shall
be entitled to an  immediate  refund of any such excess  interest by a credit to
and  payment  toward  the  unpaid  balance  of  Facility  1 (such  credit  to be
considered to have been made at the time of the payment of the excess  interest)
with any excess  interest not so credited to be immediately  paid to Borrower by
Bank.

         2.08 Set-Off.  Borrower hereby grants to Bank a lien on, and a security
interest in, the deposit  balances,  accounts,  items,  certificates  of deposit
(whether matured or unmatured) and monies of Borrower and each Subsidiary in the
possession  of or on  deposit  with Bank to  secure  and as  collateral  for the
payment and performance of the Obligations.  Upon an Event of Default,  Bank may
at any time and from time to time,  without  demand or notice,  appropriate  and
set-off  against  and  apply  the  same to the  Obligations  when and as due and
payable.

         2.09 Late  Payment  Penalty.  A late  payment  penalty of the lesser of
$100.00 or five percent  (5%),  calculated  on the  interest  payment due on the
first day of the month,  will be  assessed  against  Borrower on any payment not
received  by Bank by the tenth  day after  such  payment  was due,  and the late
payment penalty amount shall accompany such payment.




                                      -22-



 
<PAGE>

<PAGE>



         2.10 Use of  Proceeds.  Proceeds  of  Facility  1 shall be used for the
general corporate purposes of Borrower, including acquisition of core assets.

         2.11  Right to Debit  Account.  At Bank's  option,  Bank shall have the
right to  automatically  debit the Cash Collateral  Account with Bank on a daily
basis for the amount of  principal  payable  to Bank,  with  notice to  Borrower
thereof on the date of such  debit.  Bank shall have the right to debit the Cash
Collateral Account on a monthly basis for all interest and fees payable to Bank,
with notice to Borrower thereof on the date of such debit.

         2.12  Commitment Fee. As partial  consideration  for Bank entering into
this Agreement and  establishing  Facility 1, Borrower shall pay to Bank a fully
earned Fifteen Thousand Dollar  ($15,000.00)  commitment fee simultaneously with
execution of this Agreement, irrespective of any funding under the Facilities.

                                   ARTICLE III

                         AMOUNTS AND TERMS OF FACILITY 2

         3.01  Facility 2. Bank  agrees  from time to time during the  Revolving
Period  to  lend to  Borrower,  upon  Borrower's  request,  up to the  aggregate
principal amount of the Borrowing Base for Facility 2 (as defined herein) on the
terms and conditions  set forth herein.  During the Revolving  Period,  Borrower
shall be entitled  to receive  the entire  proceeds of Facility 2 in one or more
Advances pursuant to Section 3.04 hereof,  except as otherwise  specifically set
forth in this  Agreement.  Advances  under  Facility 2 shall be evidenced by the
Facility 2 Note.  After the expiration of the Revolving  Period,  Borrower shall
not be  entitled  to  receive  any  Subsequent  Advance.  Facility  2 shall be a
revolving  loan and  Borrower may borrow up to the maximum  principal  amount of
Facility 2, repay all or any portion of such principal amount of Facility 2, and
reborrow  up to  such  maximum  principal  amount,  subject  to  the  terms  and
conditions set forth herein.

         3.02     Borrowing Base for Facility 2. The Borrowing Base for Facility
2 shall be the lesser of:



                                      -23-



 
<PAGE>

<PAGE>



                  (a)     90% of the cost to Borrower of Whole Aircraft Engines,
and

                  (b)     75% of the  appraised fair market value (calculated by
appraisers satisfactory to Bank) of Whole Aircraft Engines.  Appraisals of newly
acquired Whole Aircraft Engines shall be performed at Borrower's expense no more
than 30 days before Advances against such Whole Aircraft Engines may be made.

         As soon as  dismantlement of a Whole Aircraft Engine begins for purpose
of breaking it up into parts,  the engine will become  ineligible for Facility 2
and must be either  paid off or moved to Facility 1 and  re-classified  into the
appropriate category of Parts Inventory.

         For Inventoried  Engines, a principal  curtailment of 5% of the cost of
such  Inventoried  Engine is required after 90 days in inventory,  5% additional
curtailment after 120 days in inventory, and 10% more for each additional thirty
(30) day period  until the earlier of (i) such time as the Advance  against such
Inventoried  Engine is repaid  or (ii) such time as such  Inventoried  Engine is
sold.  Upon receipt by Bank of evidence of such sale,  and repayment of Advances
against  such  Inventoried  Engine,  Bank will file with the FAA releases of its
security interest in such sold Inventoried Engine.

         For Leased  Engines,  the  principal  curtailment  schedule will be the
greater of (i) 75% of the lease  payments  received  by Borrower to date on such
Leased  Engine,  and  (ii)  the  curtailments  that  would  be due if it were an
Inventoried  Engine.  If any Whole  Aircraft  Engine after being an  Inventoried
Engine  becomes a Leased  Engine and then  becomes an  Inventoried  Engine again
(whether  through  repossession,  expiration  of the  lease or  otherwise)  then
notwithstanding  any payments  made during the term of the lease,  the principal
curtailment  schedule  at  the  time  such  Whole  Aircraft  Engine  becomes  an
Inventoried Engine again shall resume as if such Whole Aircraft Engine was never
a Leased Engine.

         3.03  Facility 2 Note.  The advances  made by Bank  pursuant to Section
3.01 herein shall be evidenced by the Facility 2 Note in the principal amount of
Six Million Dollars  ($6,000,000.00),  in form and substance acceptable to Bank,
and payable to the order of Bank (the  "Facility 2 Note").  The  Facility 2 Note
shall be  deemed  to  reflect  the




                                      -24-



 
<PAGE>

<PAGE>



aggregate  unpaid principal amount of all Indebtedness to Bank under Facility 2,
whether or not the face amount of the Facility 2 Note is in excess of the amount
actually  outstanding  from time to time,  and  whether or not the  Indebtedness
outstanding thereunder is from time to time repaid and reborrowed.

         THE PARTIES ACKNOWLEDGE AND AGREE THAT DEMAND FOR PAYMENT OF FACILITY 2
         MAY  BE  MADE  BY  THE  BANK  AT  ANY  TIME  IN  ITS  SOLE  DISCRETION,
         NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE LOAN DOCUMENTS. WITHOUT
         LIMITING  IN ANY WAY THE  BANK'S  DISCRETION  REGARDING  FACILITY 2 AND
         REPAYMENT THEREOF,  THE BORROWER IS MAKING THE AGREEMENTS AND COVENANTS
         SET FORTH IN THIS  AGREEMENT.  THE  BORROWER  HEREBY  ACKNOWLEDGES  AND
         AGREES THAT ALL SUCH  AGREEMENTS  AND  COVENANTS  ARE MADE SOLELY AS AN
         INDUCEMENT TO THE BANK TO ESTABLISH  THE DEMAND  FACILITY 2 AND TO MAKE
         THE LOAN  CONTEMPLATED  HEREUNDER  AND SHALL NOT IN ANY WAY RESTRICT OR
         COMPROMISE THE BANK'S  DISCRETIONARY  RIGHT TO DEMAND PAYMENT UNDER THE
         FACILITY 2 NOTE OR THE BORROWER'S  OBLIGATION TO MAKE PAYMENT UPON SUCH
         DEMAND. FURTHER,  BORROWER ACKNOWLEDGES AND AGREES THAT NO EXTENSION OF
         THE  DURATION  OF FACILITY 2 OR  FORBEARANCE  OR FAILURE BY BANK OF ITS
         RIGHT TO DEMAND  PAYMENT OR TO ENFORCE ANY OF ITS RIGHTS UNDER FACILITY
         2 SHALL AFFECT BANK'S RIGHT IN ITS SOLE DISCRETION TO DEMAND PAYMENT OF
         FACILITY  2 AT ANY  TIME OR THE  BORROWER'S  OBLIGATION  TO  MAKE  SUCH
         PAYMENT UPON SUCH DEMAND.

         3.04 Advance of Proceeds of Facility 2. On the Initial Advance Date and
on Subsequent  Advance  Dates,  upon initial and continued  satisfaction  of the
conditions  precedent  set forth in  Article  Seven  hereof,  Borrower  shall be
entitled to receive Advances. Borrower shall give Bank written notice, signed by
an officer of Borrower authorized by the borrowing resolutions, of any requested
Advance  hereunder.  Such notice shall  specify the proposed date of the Advance
and the amount thereof.  Each




                                      -25-



 
<PAGE>

<PAGE>



request for an Advance shall  constitute,  without the necessity of specifically
containing a written  statement,  a representation and warranty by Borrower that
no Default or Event of Default  exists,  that Borrower is in compliance with all
the  conditions  of  the  Loan  Documents,  and  that  all  representations  and
warranties  contained in any Loan Document are true and correct on and as of the
date the  requested  Subsequent  Advance is made.  Requests by Borrower  for any
Subsequent  Advance  hereunder  on any date  shall be in the  minimum  principal
amount of Twenty-five Thousand and No/100 Dollars ($25,000.00).

         3.05  Payment of Facility 2 Note.  Borrower  shall pay  interest on the
outstanding  principal  balance of Facility 2 at the  Adjusted  Base Rate on the
Base  Rate  Portion,  and at the  corresponding  Adjusted  Libor  on each  Libor
Portion, according to the terms and provisions of the Facility 2 Note.

         3.06  Prepayments.  Borrower  may at any time prepay all or any part of
the principal amount of Facility 2 outstanding without penalty.  Each prepayment
other than full payment  shall be in the minimum  amount of Twenty Five Thousand
and  No/100  Dollars  ($25,000.00)  and shall be made  prior to 2:00 P.M.  (Fort
Lauderdale time) on a Business Day in immediately available funds.

         3.07  Calculation  of  Interest.  Any interest due on Facility 2 or any
other  Obligations  shall be  calculated on the basis of a year  containing  360
days, to the extent accrued as of midnight on the last day immediately  prior to
each  interest  payment  date.  Notwithstanding  anything  herein or in any Loan
Document  to the  contrary,  the  sum of all  interest  and  all  other  amounts
reserved,  charged,  or taken by Bank as  compensation  for fees,  services,  or
expenses incidental to the making, negotiation, or collection of Facility 2 that
would be deemed  interest  under  Florida or other  applicable  law which may be
collected by Bank hereunder  shall not exceed the maximum  lawful  interest rate
permitted by such law from time to time. Bank and Borrower intend and agree that
under no  circumstance  shall Borrower be required to pay interest on Facility 2
or on any other  Obligations  at a rate in excess of the maximum  interest  rate
permitted  by  applicable  law from  time to  time,  and in the  event  any such
interest is received or charged by Bank in excess of that rate,  Borrower  shall
be entitled to an  immediate  refund of any such excess  interest by a credit to
and  payment  toward  the  unpaid  balance  of  Facility  2 (such  credit  to be
considered to have been made at the time



                                      -26-



 
<PAGE>

<PAGE>



of the payment of the excess  interest) with any excess interest not so credited
to be immediately paid to Borrower by Bank.

         3.08 Use of  Proceeds.  Proceeds  of  Facility  2 shall be used for the
general corporate purposes of Borrower,  provided,  however, that Borrower shall
not make any advances, loans or investments to or in any Affiliate with proceeds
of Facility 2.

         3.09  Commitment Fee. As partial  consideration  for Bank entering into
this Agreement and  establishing  Facility 2, Borrower shall pay to Bank a fully
earned Ten Thousand  Dollar  ($10,000.00)  commitment  fee  simultaneously  with
execution of this Agreement, irrespective of any funding under the Loan.

                                   ARTICLE IV

                         CUSTODY, INSPECTION, COLLECTION
                     AND HANDLING OF COLLATERAL AND RECORDS

         4.01  Collection of Accounts.  Until  Borrower's  authority to do so is
curtailed  or  terminated  (which Bank may do at any time),  Borrower  will,  at
Borrower's cost and expense,  collect and otherwise  enforce all remittances and
all amounts unpaid on Accounts.

         Bank shall at any time after the occurrence of an Event of Default have
the right to send notice of assignment or notice of its Security Interest to any
Account Debtor or any other Person obligated on, holding, or otherwise concerned
with any of the  Collateral,  and  thereafter  Bank shall have the sole right to
collect the Accounts  and/or take  possession of the Collateral and the Records.
Any and all of Bank's reasonable collection expenses including,  but not limited
to,   attorneys'  fees,   stationery  and  postage,   telephone  and  telegraph,
secretarial  and clerical  expenses  and the salaries of any Person  utilized to
collect the Accounts,  shall be charged to  Borrower's  account and added to the
Obligations.

         During  the  duration  of the Loan,  Bank will  credit  collections  of
Eligible  Accounts  immediately  to the Loan,  and will charge a  clearance  fee
consisting of an amount equal




                                      -27-



 
<PAGE>

<PAGE>



to two days interest on each  collected  item,  which fee shall be calculated at
the interest rate charged on the Loan.

         4.02 Power of Attorney. Borrower hereby constitutes Bank and any of its
agents or designees  as  Borrower's  attorney-in-fact,  at  Borrower's  cost and
expense,  to exercise at any time after an Event of Default (without any further
action being necessary) all or any of the following powers, which, being coupled
with an interest,  shall be irrevocable  until all Obligations have been paid in
full: to receive, take, endorse,  assign, deliver, accept and deposit, in Bank's
or Borrower's  name, any and all checks,  notes,  remittances,  drafts and other
documents  and  instruments  relating to the  Collateral;  to receive,  open and
dispose of all mail  addressed to Borrower and relating to the Collateral and to
notify  postal  authorities  to change the address  for  delivery of payments on
Accounts  from  Borrower's  address to such address  (including to a lockbox) as
Bank may designate;  to transmit to Account Debtors notice of Bank's interest in
the  Accounts  and to request  from  Account  Debtors at any time,  in Bank's or
Borrower's  name or that of any Bank's  designees,  information  concerning  the
Accounts; to notify Account Debtors to make payment directly to Bank; to execute
in  Borrower's  name  and on  Borrower's  behalf  any  financing  statements  or
amendments  thereto;  and to take or bring,  in Bank's or Borrower's  name,  all
steps,  actions or  proceedings  deemed by Bank necessary or desirable to effect
collection of the Collateral or to preserve,  protect or enforce Bank's interest
therein.  The Bank  acting  as said  attorney  (whether  through  its  agents or
designees),  and any of its agents or designees shall not be liable for any acts
of omission or  commission,  nor for any error of judgment or mistake of fact or
law, except for gross negligence or willful misconduct of Bank.

         4.03 Liability for Handling Collateral.  Nothing herein contained shall
be construed to constitute  Borrower as Bank's agent for any purpose whatsoever.
Bank shall not be responsible nor liable for any shortage, discrepancy,  damage,
loss or  destruction  of any  Collateral  wherever  the same may be located  and
regardless of the cause thereof, before Bank takes possession of the Collateral.
Bank shall not be  responsible  nor liable for any such  shortage,  discrepancy,
damage,  loss or  destruction  after Bank takes  possession  of such  Collateral
except for that caused by Bank's gross negligence or willful misconduct.




                                      -28-



 
<PAGE>

<PAGE>



         4.04  Custodian of Collateral.  Bank shall have the right,  at any time
after an Event of Default and from time to time  thereafter,  to employ and have
present on any of Borrower's  premises one or more  custodians  selected by Bank
each of whom  shall  have the right to  exercise  any and all of  Bank's  rights
hereunder or under any other Loan Document.  Borrower hereby agrees to cooperate
with any such custodian and to do whatever Bank may reasonably request by way of
leasing warehouses or otherwise preserving the Collateral. All expenses incurred
by Bank by reason of the employment of the custodian  shall be payable on demand
and, until paid by Borrower, shall be charged to Borrower's account and added to
and deemed part of the Obligations.

         4.05 Cash Collateral  Account(s).  Borrower shall establish one or more
Cash  Collateral  Accounts at Bank in Borrower's  name, into which Borrower will
deposit all payments  received on Accounts  promptly after receipt thereof under
Facility 1 and 2. Amounts deposited into the Cash Collateral Account(s) shall be
swept on a daily  basis out of the Cash  Collateral  Account(s)  and  applied to
Facility 1 against the principal outstanding under such Facility as of such day.
As to Facility 2, payments  against  principal  outstanding  under such Facility
will be made by Borrower by the fifteenth of each month  beginning  January 1997
(or on the next  Business  Day if the  fifteenth  is not a  Business  Day) as to
principal due for the preceding calendar month. The Cash Collateral  Account(s),
and all proceeds  thereof,  shall be pledged to Bank.  Upon the occurrence of an
Event of Default under either Facility, or if Bank believes that the prospect of
payment  or  performance  of the  obligations  of  Borrower  under  the  Loan is
impaired,  Bank shall have the  right,  without  prior  notice to  Borrower,  to
establish a lockbox for such Facility into which Bank may direct Account Debtors
to deposit all payments on Accounts.  Upon  exercising  its right to establish a
lockbox or lockboxes  after an Event of Default,  Bank may apply the contents of
such lockboxes, which shall be pledged to Bank, to any of Borrower's Obligations
in its sole discretion.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         Borrower,   and  each   Subsidiary  (as  and  when   applicable  as  if
specifically set forth and named herein), represents and warrants to Bank that:




                                      -29-



 
<PAGE>

<PAGE>




         5.01 Organization, Corporate Powers, etc. Borrower (i) is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Delaware,  (ii) has all requisite  power and  authority,  corporate and
otherwise,  to own its  respective  properties  and  assets  and to carry on its
respective business as now conducted and proposed to be conducted, (iii) is duly
qualified to do business and is in good standing in every  jurisdiction in which
the character of its  properties or assets owned or the nature of its activities
conducted makes such qualification  necessary,  and (iv) has the corporate power
and authority to execute and deliver,  and to perform its obligations under this
Agreement and the other Loan Documents. Borrower is in compliance with all laws,
rules,  regulations,  orders and decrees of any legislative,  administrative  or
judicial body or official which are applicable to Borrower or to its properties,
including the  Collateral.  As of the date of this  Agreement,  Borrower has one
Subsidiary,  IASI,  which is  contemplated  to be the vehicle  through which the
Borrower will acquire the assets of IASLP.

         5.02   Authorization   of  Loan,  etc.  The  execution,   delivery  and
performance of the Loan  Documents by Borrower (a) have been duly  authorized by
all requisite corporate action and (b) will not (i) violate (y) any provision of
law, any governmental rule or regulation, any order of any court or other agency
of  government  or the  Articles  of  Incorporation  or Bylaws or any  corporate
resolution  of  minutes  of  Borrower  or (z) any  provision  of any  indenture,
Agreement or other  instrument to which Borrower is a party or by which Borrower
or any of its properties or assets are bound,  or (ii) result in the creation or
imposition of any Lien,  charge or encumbrance of any nature whatsoever upon any
of the  properties  or assets of Borrower  other than as  permitted by the terms
hereof.

         5.03  Financial  Statements.  Borrower  has  furnished  Bank  with  the
following  financial  statements,  identified by the chief financial  officer of
Borrower:  (i) audit level balance sheets of Borrower as of 12/31/95, and profit
and loss  statements,  statements of cash flow and  statements of  stockholder's
equity of  Borrower  for the  fiscal  year  ended on  12/31/95.  Such  financial
statements  (including any related  schedules and/or notes) are true and correct
in all material respects and have been prepared in accordance with GAAP and show
all  liabilities,  direct and  contingent,  of Borrower  required to be shown in
accordance with such principles. The balance sheets fairly present the condition
of  Borrower  as at the  dates  thereof,  and the  profit  and loss




                                      -30-



 
<PAGE>

<PAGE>



statements, statement of cash flow and statements of stockholders' equity fairly
present the results of the  operations  of Borrower  for the periods  indicated.
From the date of the annual financial  statements to the date of this Agreement,
there has  been,  and to the date of the  Initial  Advance  and each  Subsequent
Advance there will be, no change in the properties, assets, liabilities (whether
contingent or otherwise),  financial condition, business, operations, affairs or
prospects of Borrower and its Subsidiaries on a consolidated  basis, as the case
may be, from that set forth or reflected in the fiscal  year-end  balance sheet,
which have been, either in any case or in the aggregate, materially adverse.

         5.04 Tax Returns and Payments. All federal, state and local tax returns
and  reports of Borrower  required  to be filed have been filed,  and all taxes,
assessments,  fees and other governmental charges upon Borrower,  or upon any of
its properties,  assets,  incomes or franchises,  which are due and payable have
been paid, other than those presently contested in good faith and by appropriate
and lawful proceedings  prosecuted  diligently.  Borrower has and will establish
all  necessary  reserves  and make all  payments  required of Borrower to be set
aside or made in regard to all F.I.C.A.,  withholding,  sales or excise, and all
other similar federal, state and local taxes.

         5.05     Agreements.

                  (a) Borrower is not a party to any Agreement, indenture, lease
or instrument or subject to any charter or other  corporate  restriction  or any
judgment,  order, writ,  injunction,  decree, rule or regulation  materially and
adversely affecting its business,  properties,  assets,  operations or condition
(financial or otherwise).  There are no material  unrealized losses with respect
to any such Agreement, indenture, lease or instrument.

                  (b) Borrower is not in default in the performance,  observance
or  fulfillment  of any of the material  obligations,  covenants  or  conditions
contained in any material Agreement or instrument to which it is a party.

         5.06 Title to  Properties  and Assets,  Liens,  etc.  Borrower has good
title to all of its properties  and assets,  including the properties and assets
reflected  in the balance  sheet as of October 31, 1996,  hereinabove  described
(other  than  properties  and  assets




                                      -31-



 
<PAGE>

<PAGE>



disposed of in the ordinary  course of business).  Borrower  enjoys peaceful and
undisturbed  possession of all leases.  All such leases are valid and subsisting
and are in full force and effect.  Borrower  owns or has the right to use all of
the patents, trademarks, service marks, trade names, copyrights,  franchises and
licenses,  and rights  with  respect  thereto  necessary  for the conduct of its
business  as now  conducted  or  proposed  to be  conducted,  without  any known
conflict with the rights of others.

         5.07 Litigation,  etc. There are no actions or proceedings  pending or,
to the knowledge of Borrower, threatened, against Borrower or affecting Borrower
which,  either in any case or in the  aggregate,  might  result in any  material
adverse  change in the  financial  condition,  business,  prospects,  affairs or
operations of Borrower or in any of its properties or assets, or which questions
the  validity  of this  Agreement  or the  other  Loan  Documents  or  with  the
transaction contemplated hereby or thereby, except for the pending litigation of
Borrower set forth in Schedule 5.07 attached hereto.

         5.08  Consents  and  Approvals.  No  authorization,  license,  consent,
approval,  notice, filing (except for UCC financing statements),  or undertaking
is required under any applicable law in connection with the execution,  delivery
and  performance  by  Borrower  of  this  Agreement  or any of  the  other  Loan
Documents.

         5.09  Enforceable  Obligations.  The  Loan  Documents  have  been  duly
executed and delivered by Borrower and are the legal and binding  Obligations of
Borrower  enforceable  in  accordance  with their  respective  terms,  except as
limited  by  bankruptcy,  insolvency  or  similar  laws at the  time  in  effect
affecting  the  rights  of  creditors   generally,   and  to  general  equitable
principles, whether applied in proceeding at law or in equity.

         5.10 Full  Disclosure.  There is no material fact  (including,  without
limitation,  any litigation or outstanding Long Term and Contingent  Liabilities
or Current Liabilities) that Borrower has not disclosed to Bank which would have
a material  adverse effect on the properties,  business,  prospects or condition
(financial  or  otherwise) of Borrower (or of any  Subsidiary,  as  applicable).
Neither the  financial  statements  referenced  in Section 5.03 hereof,  nor any
certificate or statement delivered herewith or heretofore by Borrower to Bank in
connection with this Agreement, contains any untrue statement of a material fact
or omits to state any material fact





                                      -32-



 
<PAGE>

<PAGE>








necessary  to keep  the  statements  contained  herein  or  therein  from  being
misleading. As to Liabilities,  there exists no default and, after giving effect
to the transaction  contemplated in this Agreement,  there will exist no default
under the provisions of any  instrument  evidencing  such  Liabilities or of any
Agreement relating thereto.

         5.11 Hazardous Materials.  With regard to any real property heretofore,
now,  or  hereafter  owned  or  leased  by  Borrower  (or  by a  Subsidiary,  as
applicable) (the "Property"):

                  (a) To the best of Borrower's knowledge,  the Property is free
from Hazardous  Materials (except for de minimis amounts used in compliance with
all  applicable  laws) and materials that could produce  Hazardous  Materials or
toxic effects on humans, and does not constitute an environmental  hazard of any
type under local, state or federal law;

                  (b)   There   has  been  an   inspection,   audit,   or  other
investigation  conducted as to the quality of the air,  surface,  or  subsurface
conditions  at or on the  Property by a third  party,  which report has not been
reviewed and approved by Bank, and Borrower has not received  written,  oral, or
any other type of notice  that any other  third  party,  including  governmental
agencies, proposes to carry out an inspection,  audit, or other investigation of
the Property; and

                  (c) To the best of  Borrower's  knowledge,  there  has been no
treatment,  storage,  disposal,  discharge,  or other  type of  release  on land
adjacent or near to the Property which may constitute a risk of contamination of
the Property or surface or ground water flowing to the Property.

                  (d) Borrower has put in place internal environmental policies,
copies of which have been provided to Bank and which are satisfactory to Bank in
its sole discretion. Borrower represents and warrants to Bank that such policies
have been developed with adequate information and do not omit anything necessary
in order to render such policy  complete  and  thorough,  and  Borrower  further
represents and warrants to Bank that such policies are consistently  enforced by
Borrower.




                                      -33-



 
<PAGE>

<PAGE>




         5.12  Outstanding  Debt.  As  of  the  date  hereof,  Borrower  has  no
outstanding debt except for: (a) the Kellstrom Loan, (b) the BankAtlantic  Loan,
(c) a revolving credit note payable to BankAtlantic and having a present balance
as of the date of this  Agreement of $1,490,725,  which note is being  satisfied
with the proceeds of the Loan, (d) a guidance note payable to  BankAtlantic  and
having a present  balance  as of the date of this  Agreement  of  $3,000,000.00,
which note is being  satisfied  with the  proceeds of the Loan,  and (e) general
trade  accounts  payables  generated  by  Borrower  in the  ordinary  course  of
business.

                                   ARTICLE VI

                              COVENANTS OF BORROWER

         6.01 Affirmative Covenants.  Borrower covenants,  for so long as any of
the principal  amount of or interest on the Notes is  outstanding  and unpaid or
any  duty  or  obligation  of  Borrower  hereunder  or  under  any of the  other
Obligations remains unpaid or unperformed, as follows:

                  (a)  Accounting;  Financial  Statements;  etc.  Borrower  will
deliver to Bank copies of each of the following:

                  (i) as soon as practicable and in any event within  forty-five
(45) days after the end of each fiscal  quarter  (other than the last  quarterly
period)  in each  fiscal  year,  a  consolidated  profit and loss  statement  of
Borrower and its Subsidiaries  for such fiscal year, and a consolidated  balance
sheet of Borrower and its  Subsidiaries as at the end of such quarterly  period,
setting  forth in each case in  comparative  form  consolidated  figures for the
corresponding  period in the preceding fiscal year, all in reasonable detail and
certified by an  authorized  financial  officer of Borrower,  subject to changes
resulting from year-end adjustments;

                 (ii) as soon as practicable and in any event within ninety (90)
days after the end of each fiscal year, an audited  consolidating balance sheet,
profit and loss statement,  statement of stockholder's  equity, and statement of
cash flows of each of Borrower and its Subsidiaries,  setting forth in each case
in comparative form



                                      -34-



 
<PAGE>

<PAGE>




corresponding  consolidated  figures from the preceding  annual audit, all to be
audit level  statements  in form and scope  acceptable  to Bank and certified to
Borrower by independent  certified  public  accountants  of recognized  standing
whose  certificate  shall be in scope and substance  reasonably  satisfactory to
Bank.


                  (iii) as soon as  practicable  and in any event within fifteen
(15) days after the end of each month during the duration of this Agreement,  an
Account  Collateral  Certificate,  showing  Accounts  classified as Domestic and
Foreign,  a Borrowing Base Certificate and an Inventory  Collateral  Certificate
showing  Parts  Inventory  classified  by type and  age,  and any  other  ageing
schedules Bank may reasonably request of Borrower in form satisfactory to Bank;

                  (iv) as soon as  practicable  and in any event  within  twenty
(20) days after the end of each fiscal quarter in each fiscal year, an Officer's
Certificate  confirming full compliance with all financial  covenants  contained
herein and all other  provisions  and  conditions of the Loan  Documents,  which
Officer's Certificate shall be in scope and substance reasonably satisfactory to
Bank;

                  (v) promptly upon receipt thereof, a copy of each other report
submitted to Borrower by independent  accountants in connection with any annual,
interim or special audit made by them of the books of Borrower; and

                  (vi)  with   reasonable   promptness,   such  other  data  and
information as from time to time may be reasonably required by Bank.

Borrower  covenants  that  forthwith  upon any  officer  of  Borrower  obtaining
knowledge of any Event of Default or Default  under this  Agreement or any other
obligation  of  Borrower,  it shall  deliver  to Bank an  Officer's  Certificate
specifying the nature thereof,  the period of existence thereof, and what action
Borrower proposes to take with respect thereto.

                  (b)  Inspection of Records and  Collateral.  At all reasonable
times,  Bank (or its designated  representative)  shall have full access to, and
the right to audit, check, inspect,  examine and make abstracts and copies from,
Borrower's  Records and all other books,  records,  audits,  correspondence  and
papers relating to the Collateral, the right





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to confirm and verify all Accounts,  to discuss the  Collateral  with any Person
having a Permitted  Encumbrance,  and to do whatever Bank may deem  necessary to
preserve or protect its interest in the Obligations and the Collateral.  Bank or
its agents may enter upon any of  Borrower's  premises at any time and from time
to time during  business  hours for the purpose of inspecting the Collateral and
any and all Records.  Such entry onto  Borrower's  premises  shall be with prior
oral  notice to  Borrower  (unless a Default or Event of Default  exists or Bank
deems that the  prospect  of payment  or  performance  of all or any part of the
Obligations or the value of any of the Collateral is impaired or endangered,  in
which case no prior notice to Borrower is necessary). At any time after an Event
of Default Bank may take possession of and remove or require Borrower to deliver
to Bank any or all Records.  The rights of inspection and access granted to Bank
herein are  continuing  rights and shall  survive  closing  and remain in effect
until payment in full of all Obligations regardless of the existence of an Event
of Default or of any action to foreclose  Bank's Security  Interest or otherwise
protect Bank's rights. Bank shall have the right, at its discretion,  to conduct
audits  of the  books,  records  and  accounts  of  Borrower  at a time or times
reasonably  acceptable to Borrower and Bank. Prior to the occurrence of an Event
of  Default,  these  audits  shall be  conducted  at Bank's  expense.  After the
occurrence  of an Event  of  Default,  they  shall be  conducted  at  Borrower's
expense.

                  (c) Maintenance of Corporate Existence;  Compliance with Laws.
Borrower (and each Subsidiary, as applicable),  shall each at all times preserve
and maintain in full force and effect its corporate existence,  powers,  rights,
licenses,  permits and  franchises  in the  jurisdiction  of its  incorporation;
continue to conduct and operate its  business  substantially  as  conducted  and
operated  during the present and preceding  fiscal year;  operate in substantial
compliance  with all applicable  laws,  statutes,  regulations,  certificates of
authority and orders in respect of the conduct of its business;  and qualify and
remain  qualified as a foreign  corporation in each  jurisdiction  in which such
qualification   is  necessary  or  appropriate  in  view  of  its  business  and
operations.

                  (d) Creation of Accounts.  Upon Bank's request,  Borrower will
provide Bank with  information as to each Account,  including:  (i) confirmatory
assignment  schedules;  (ii)  copies of all  documents  evidencing  the sale and
delivery of goods or the  performance  of services  which  created any Accounts,
including,  but not limited to, contracts,  orders,  invoices,  bills of lading,
warehouse  receipts,  delivery  tickets and




                                      -36-



 
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shipping  receipts;  and (iii) such further schedules and/or information as Bank
may reasonably require.

                  (e) Maintenance of Properties.  Borrower (and each Subsidiary,
as applicable), shall maintain or cause to be maintained in good repair, working
order and  condition  all  properties  used in its business  including,  but not
limited to, any real property and all  improvements  located  thereon,  and from
time to time will make or cause to be made all  appropriate  repairs,  renewals,
improvements and replacements  thereof and of leases or agreements covering such
properties  (including  the  Property)  so that  the  businesses  carried  on in
connection therewith may be properly conducted at all times.

         Borrower  shall  further  keep and  maintain,  at its cost and expense,
Records  pertaining  to the  Collateral  in such detail,  form and scope as Bank
shall from time to time require. Borrower will mark its Records with appropriate
notations  satisfactory  to  Bank,  disclosing  that  such  Collateral  has been
pledged, sold, assigned, mortgaged and transferred to Bank and that Borrower has
granted to Bank a Security Interest therein.

                  (f)  Notice of Suit,  Proceedings,  Adverse  Change;  Default.
Borrower (and each Subsidiary,  as applicable),  shall promptly give Bank notice
in  writing  (i) of all  threatened  or  actual  actions  or suits (at law or in
equity) and of all threatened or actual  investigations or proceedings affecting
Borrower or any Subsidiary or the rights or other  properties of Borrower or any
Subsidiary, (i) which involves potential liability of Borrower or any Subsidiary
in an amount in excess of One Hundred Thousand and No/100 Dollars  ($100,000.00)
either in any  individual  case or in the aggregate for all such cases;  (ii) of
any  material  adverse  change in the  condition  (financial  or  otherwise)  of
Borrower or any such Subsidiary;  (iii) of any seizure or levy upon any material
part of the properties of Borrower or any such  Subsidiary  under any process or
by a receiver;  and (iv) of the happening,  occurrence or existence of any Event
of Default or Default  and shall  provide  Bank with a detailed  statement  by a
responsible officer of Borrower of all relevant facts and the action being taken
or proposed to be taken by Borrower with respect thereto.



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                  (g)  Checking  Accounts.  Borrower and each  Subsidiary  shall
maintain all its checking  accounts and business  accounts with Bank in a manner
satisfactory to Bank and use Bank as its sole depository.

                  (h) Insurance.  Borrower shall timely procure and maintain and
comply  with  such  insurance  and  policies  of  insurance  (including  without
limitation public liability, product liability, business interruption, insurance
on  foreign  accounts  receivable  (as  currently  in force),  hazard,  fire and
extended coverage, property damage and casualty insurance) as may be required by
law and such other  insurance,  to such  extent and  against  such  hazards  and
liabilities,  as is customarily  maintained by companies similarly situated, and
to furnish to Bank upon its request  evidence of said  insurance.  In any event,
Borrower  shall at all times maintain at least the policies of insurance and the
levels of insurance  coverage as are currently  maintained by Borrower as of the
date  hereof.  Bank shall be loss payee as to the business  contents  portion of
hazard  insurance  policies,  and as to all foreign  Accounts to the extent such
Accounts  constitute  part of the Borrowing  Base. All policies or  certificates
thereof,  including all endorsements thereof and those required hereunder, shall
be deposited with Bank.

                  (i)  Debts  and  Taxes  and  Liabilities.  Borrower  and  each
Subsidiary  shall pay and discharge (i) all of its  indebtedness and obligations
in accordance with their terms and before they shall become in default, (ii) all
taxes,  assessments and  governmental  charges or levies imposed upon it or upon
its income and  profits or against  its  properties,  prior to the date on which
penalties  attach thereto,  and (iii) all lawful claims which, if unpaid,  might
become a Lien or charge  upon any of its  properties;  provided,  however,  that
Borrower  shall not be  required  to pay the items  listed  in  subsections  (i)
through (iii) that are being  contested in good faith by appropriate  and lawful
proceedings  diligently pursued and for which adequate reserves (with respect to
any material claims) have been set aside on its books.

                  (j)  Further  Assurances;   Additional  Collateral  Documents.
Borrower will, at its expense, execute,  acknowledge and deliver and cause to be
executed,  acknowledged and delivered, to Bank all such instruments,  including,
without limitation,  financing statements, security agreements,  assumptions and
continuation  statements,  deliver to Bank all such legal opinions, and take all
such  other  action as Bank may from time to time  request  for the  purpose  of
further  assuring to Bank the 




                                      -38-



 
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<PAGE>



security for the  Obligations  provided  for, or intended to be provided for, in
this Agreement and the other Loan  Documents,  and to confirm the Obligations to
carry out and  fulfill  the intent and  purpose of this  Agreement  and the Loan
Documents.  Further,  to the  extent  Borrower  acquires  from  time to time any
additional property within the definition of the term Collateral, Borrower shall
immediately execute and deliver to Bank such documents as are necessary to grant
Bank a valid and first  priority  perfected  lien or  security  interest in such
property.  Borrower shall notify Bank of all new patents and trademarks acquired
or  originated  by  Borrower.  To the extent that Bank  considers  any patent or
trademark  owned  by  Borrower  to be  materially  economically  significant  to
Borrower,  Borrower shall promptly take all actions requested by Bank to perfect
Bank's security interest in such patent or trademark.

                  (k) Consent of Lessor. In the event that any of the Collateral
is at any time located on any leased premises, Borrower will promptly furnish to
Bank a consent of lessor  subordinating  any landlord's  lien to the lien of the
Bank,  which  consent  shall be  satisfactory  to Bank.  If such  consent is not
obtained within a reasonable time not to exceed fifteen (15) Business Days, such
collateral  as in the nature of Inventory  will (at Bank's sole  discretion)  be
designated as not eligible as Inventory until such consent is obtained.

                  (l)  Subordination  of Non-Bank Debt;  Permitted  Loans.  With
regard to all  Subordinated  Debt of Borrower,  whether  existing as of the date
hereof or incurred  during the duration of the Loan,  Borrower  shall deliver or
cause to be delivered to Bank a copy of the original  promissory note evidencing
such Subordinated Debt together with all amendments,  along with a subordination
Agreement,   in  form  and  substance  acceptable  to  Bank.  Pursuant  to  such
subordination  Agreement,   such  Subordinated  Debt  shall  be  absolutely  and
unconditionally  subordinated to the Loan,  provided,  however,  that payment of
interest  only on  Subordinated  Debt  shall be allowed  by Bank  without  prior
consent provided that all financial covenants of Borrower are met on a quarterly
basis  and  there  is  no  Event  of  Default,  and  payments  of  principal  on
Subordinated Debt, other than those payments specifically permitted below, shall
be allowed by Bank only on prior written  consent of Bank.  Permitted  principal
payments  include the following  payments  against the  Acquisition  Loan; up to
$8,833,333.33  during the year 2001, up to  $8,833,333.33  during the year 2002,
and up to  $8,833,333.34  during the year  2003.  Payment  of  principal  on the
Subordinated  Debt




                                      -39-



 
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<PAGE>




may only be made if (a) Borrower is not in default under the Loan,  and (b) such
payment  would not  cause a  violation  of the Debt  Service  Coverage  covenant
pursuant to Section 6.03(c).

         Prior to the occurrence of an Event of Default,  scheduled  payments of
interest on and principal of the BankAtlantic Loan and the Kellstrom Loan may be
made by Borrower.  No prepayments or  acceleration  of such loans may be made by
Borrower. After the occurrence of an Event of Default, such payments may only be
made with prior written consent of Bank. Bank has been notified by Borrower that
principal   payments  on  the  Kellstrom  Loan  are  scheduled  to  be  paid  in
installments  of $125,000  every 6 months until June 22, 1999 when the remaining
principal balance of the Kellstrom Loan will be due in a balloon payment.

                  (m) Hazardous  Materials.  Borrower shall  immediately  notify
Bank  orally  and in writing  of any  notice of (i) the  happening  of any event
involving  the  spill,  release,  leak,  seepage,  discharge  or  cleanup of any
Hazardous Materials on the Property or in connection with Borrower's  operations
thereon or (ii) any  complaint,  order,  citation  or notice  with regard to air
omissions, water discharges, or any other environmental, health or safety matter
affecting Borrower or any of the Property.

         6.02 Negative Covenants.  Borrower covenants, for so long as any of the
principal  amount of or interest on the Notes is  outstanding  and unpaid or any
duty or obligation of Borrower  hereunder or under any of the other  Obligations
remains unpaid or unperformed, as follows:

                  (a)  Other  Agreements.  Borrower  will  not  enter  into  any
arrangements,  contractual  or otherwise,  which would  materially and adversely
affect its duties or the  rights of Bank  under the Loan  Documents  or which is
inconsistent with or limits or abrogates the Loan Documents.

                  (b) Sale of Assets.  Neither  Borrower nor any Subsidiary will
sell,  lease,  assign,  transfer or  otherwise  dispose of all or a  substantial
(being  defined as equal to or greater than $200,000 worth of fixed assets which
are  not  Current  Assets)  part  of  its  assets  or  properties,  tangible  or
intangible,  to any Person without the prior written




                                      -40-



 
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<PAGE>



consent  of Bank,  except  for the sale or lease of  Inventory  in the  ordinary
course of business.

                  (c)  Merger,  Consolidation,   Dissolution,  Change  of  Name,
Location or  Business,  etc.  Without  prior  written  consent of Bank,  neither
Borrower  nor any  Subsidiary  will  consolidate  with or merge  into any  other
corporation, or permit another corporation to merge into it (unless, in the case
of  a  merger  or  consolidation  involving  Borrower,   Borrower  is  surviving
corporation), or permit any other type of reorganization or recapitalization, or
dissolve  or take  or  omit  to  take  any  action  which  would  result  in its
dissolution, or acquire all or substantially all the properties or assets of any
other Person (except for the contemplated acquisition, by IASI, of the assets of
IASLP,  which  acquisition  is  specifically   permitted  provided  that  it  is
consummated under  substantially the terms and conditions provided to Bank as of
the date of this Agreement, and provided that there is no Event of Default under
any Loan Document at the time of such  acquisition;  if there is any substantive
or material change to the structure of the acquisition  between the Closing Date
and the date of the acquisition, Bank shall have the right to review and approve
such changes prior to the  acquisition),  or change the name or use of any trade
names of Borrower or any  Subsidiary  (including  the  fictitious  name  "Westco
International",  which  Borrower  represents and warrants is the only name other
than Borrower's legal name under which Borrower conducts its business;  Borrower
holds no trademarks) or the location of the chief executive office (as that term
is used in the UCC) of Borrower or such Subsidiary,  the location of any records
pertaining  to any  Accounts  or other  Collateral,  or the  address  where  any
Inventory is or may be stored  (except that  Borrower has disclosed to Bank that
Inventory is sent to repair  facilities in various states in the ordinary course
of  business,  which  repair  facilities  change from time to time;  the initial
repair facilities as of the date hereof are set forth in Schedule  6.02(c)),  or
maintain a Place of Business at any time outside the State of Florida other than
those set forth in Schedule  6.02(c)  attached  hereto  (unless Bank shall first
have consented thereto and Borrower shall have executed such documents which, in
the reasonable opinion of Bank, are required in order to perfect, under the laws
of the state  where said Place of Business is  located,  the  Security  Interest
granted Bank in the Collateral under the Security  Agreement),  or engage in any
business other than the business  presently  conducted by it on the date of this
Agreement  and business of  substantially  the same type or  reasonably  related
thereto.




                                      -41-



 
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                  (d) Sale of Collateral; Liens on Collateral. Borrower will not
sell, assign or discount any of the Collateral with or without recourse,  except
for the  collection or disposition of Accounts or the sale or lease of Inventory
in the ordinary course of business;  or borrow from anyone on the security of or
create,  incur or suffer to exist any Lien (other than  Bank's,  which  Borrower
warrants is a first  priority  security  interest) on any of the  Collateral  or
permit any financing statement (other than Bank's Financing  Statement) to be on
file with respect thereto.

                  (e) Fiscal Year. Borrower will not change its fiscal year from
a year ending 12/31 without prior reasonable notice to Bank.

                  (f) Liens. Neither Borrower nor any Subsidiary, as applicable,
will create,  assume, or suffer to exist any Lien, (including  Capitalized Lease
Obligations) upon any of its property or assets,  whether now owned or hereafter
acquired except:

                  (i) Liens  for  taxes not yet due or which are being  actively
contested in good faith by appropriate proceedings;

                  (ii) Permitted Liens as described in Schedule 6.02(f) attached
hereto,  including Liens incurred in connection with the  BankAtlantic  Loan and
the  contemplated  acquisition  of the assets of IASLP;  and  existing  Liens on
Borrower's Equipment;

                  (iii) Purchase money Liens and Capitalized  Lease  Obligations
on machinery and Equipment hereafter acquired, and extensions or renewals of any
of the same; or

                  (iv) Liens not placed by  Borrower  on the  Collateral,  as to
which Liens an Event of Default  will not be deemed by Bank to exist for 60 days
after its placement if within such time it is removed or bonded off.

                  (g) Additional  Indebtedness.  Except for Permitted  Loans and
the Obligations, Borrower will not incur, create, assume or otherwise permit the
existence,  at any time during any fiscal year of Borrower,  of any indebtedness
or liability for borrowed money,  any  indebtedness  evidenced by notes,  bonds,
debentures,  or similar



                                      -42-



 
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obligations or any conditional sales or title retention Agreement or capitalized
leases  without  the prior  written  consent  of Bank.  Prior to  obtaining  any
Permitted  Loan,  Borrower  must  first  notify  Bank  and  furnish  to Bank any
information  which Bank may  request  regarding  the  proposed  Permitted  Loan.
Further,  any payment (of interest or principal) on a Permitted Loan may only be
made pursuant to Section 6.01(l) hereof.

                  (h)  Transactions  with  Affiliates.  Neither Borrower nor any
Subsidiary will directly or indirectly, purchase, acquire, or lease any property
from, or sell,  transfer,  or lease any property to, or otherwise  deal with, in
the  ordinary  course  of  business  or  otherwise,  or make or permit to remain
outstanding  any loan or  advance  to or own,  purchase  or  acquire  any stock,
obligations  or  securities  of, or any other  interest  in, or make any capital
contribution  to,  any  Affiliate  except  to the  extent  that  such  acts  and
transactions  are on terms not less  favorable to Borrower or to any  Subsidiary
than if no such relationship described above existed.

                  (i)  Amendment  to  Existing  Agreements;  Adoption  of  Plan.
Borrower  shall not enter  into any  amendment,  change or  modification  to any
existing  agreements,  which change or amendment would have a material effect on
the business or condition of Borrower, or suffer or permit to occur any Event of
Default  or  Default  thereunder,  or adopt a Plan,  without  the prior  written
consent of Bank.

                  (j)  Establishment of  Subsidiaries.  Neither Borrower nor its
Subsidiaries,  as  applicable,  will  establish or acquire any new  subsidiaries
without  Bank's  prior  written  consent  thereto,  which  consent  shall not be
unreasonably  withheld  or  denied.  Upon  the  establishment  of any  such  new
Subsidiary,  Borrower will obtain (i) a pledge of such Subsidiary's  Stock (and,
with the exception of IASI, such Subsidiary's assets), and (ii) in addition, its
joinder upon such Loan  Documents as Bank shall require in  connection  with the
Loan if in Bank's sole  judgment  such new  Subsidiary  directly  or  indirectly
benefits from the proceeds of the Loan.

                  (k)  Policies;   Returns  and  Credits.   Borrower  shall  not
materially  amend or deviate from any of its policies and procedures with regard
to  returns of or  rejection  of  Inventory,  or with  regard to any  deduction,
discount,  credit,  or  allowance  of any kind  relating to the sale or lease of
Inventory as set forth on Schedule 6.02(p) hereof.




                                      -43-



 
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         6.03 Financial Covenants. Borrower covenants, for so long as any of the
principal  amount of or interest on the Notes are  outstanding and unpaid or any
duty or  Obligation  of  Borrower  hereunder  or  under  any of the  other  Loan
Documents remains unpaid or unperformed, as follows:

                  (a) Maximum Capital Funds Ratio. The ratio of Debt to Tangible
Net Worth of  Borrower  (both on an  individual  operating  unit  basis and on a
consolidated  basis) shall never exceed 2.5 to 1 at any time during the duration
of the Loan, beginning at December 31, 1996. Debt to Tangible Net Worth shall be
computed on a quarterly basis.

                  (b)  Minimum  Consolidated  Tangible  Net Worth.  At all times
during the duration of the Loan,  beginning with fiscal year 1997,  Tangible Net
Worth of Borrower and its Subsidiaries on a consolidated basis shall not be less
than Ten Million  Dollars  ($10,000,000.00)  plus fifty percent (50%) of all Net
Profit in each such fiscal year.

                  (c) Minimum Debt Service  Coverage  Ratio.  Tested  quarterly,
both on an  individual  operating  basis and  consolidated  basis,  beginning at
December 31, 1996,  the Borrower  must meet the  following  minimum debt service
coverage ratios.  The measurement  shall be made based on operating data for the
cumulative past four quarters.

         Ratio A:  Net  Profit  plus  Interest  Expense  plus  Depreciation  and
Amortization  Expense  divided by the sum of Senior Debt  Interest  Expense plus
non- Subordinated required minimum principal payments must exceed 1.25x.

         Ratio B:  Net  Profit  plus  Interest  Expense  plus  Depreciation  and
Amortization Expense divided by the sum of Senior and Subordinated Debt Interest
Expense  plus   non-Subordinated   required  minimum  principal   payments  plus
Subordinated Debt principal payments must exceed 1.00x.

                  (d) Loan. At no time will the outstanding principal balance of
each Facility Loan exceed the Borrowing Base for such Facility.


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                                   ARTICLE VII

                              CONDITIONS OF LENDING

A. The First  Advance.  The obligation of the Bank to fund the Loan hereunder on
the Initial  Advance Date shall be subject to the  fulfillment  of the following
conditions  precedent  (and, in addition,  to the  conditions to any Advance set
forth in subsection B of this Article VII):

         7.01  Evidence  of  Borrower  Action.  The Bank shall  have  received a
certificate,  dated as of the Closing Date, of an Authorized  Representative  of
the Borrower:  (i) attaching true and complete  copies of the resolutions of its
Board of Directors,  written  action of general  partner,  or written  action of
members, as applicable, and of all documents (in form and substance satisfactory
to the Bank)  evidencing  other  necessary  corporate,  partnership,  or company
action  taken by the  Borrower to authorize  this  Agreement,  the Notes and the
other Loan Documents, (ii) attaching a true and complete copy of its certificate
of incorporation and bylaws,  partnership Agreement, or articles of organization
and  regulations,  as  applicable;  (iii)  setting  forth the  incumbency of its
officers  who sign this  Agreement,  the Notes,  and the other  Loan  Documents,
including  therein  signature  specimens of such officers,  and (iv) attaching a
certificate  of  good  standing  of the  Secretary  of  State  of the  state  of
incorporation or organization of Borrower and of all states in which Borrower is
qualified to do business,  together with such other  documents as the Bank shall
reasonably require.

         7.02     Notes.  The Bank shall have received the Notes, executed by an
Authorized Representative of Borrower.

         7.03 Opinion of Counsel to Borrower.  The Bank shall have  received the
opinion of Stearns,  Weaver,  Miller,  et al.,  P.A.,  counsel to the  Borrower,
addressed to the Bank and dated the Closing Date,  substantially  in the form of
Exhibit "D" attached hereto.

         7.04 Security  Agreement and Other Security  Documents.  The Bank shall
have received and be in possession of (i) the Security Agreement,  duly executed
by an Authorized  Representative of the Borrower; and (ii) such other supporting




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documentation  as shall be  reasonably  requested by Bank, in form and substance
satisfactory to Bank.

         7.05  Financing  Statements.  The  Borrower  shall have  executed  such
financing  statements and other  documents as may be required or advisable under
the Security Agreement,  or the other Loan Documents,  as Bank may request,  for
the purpose of perfecting the security interests granted therein and herein.

         7.06  Property  and  Public  Liability  Insurance.  The Bank shall have
received the policy or policies of property,  public and products  liability and
other  insurance   required  by  this  Agreement  with  such   endorsements  and
certificates as may be required thereby.

         7.07 Fees.  Bank shall have received the  Commitment  Fees and the fees
and disbursements of Bank's counsel shall have been paid.

         7.08  Concerning  the  Subordinated   Debt.   Borrower's   indebtedness
evidenced by the Subordinated Debt shall not be in default.

         7.09 Other  Documents.  Review and  approval  by the Bank  and/or  Bank
counsel shall have been obtained of:

                  (a) the IASLP purchase Agreement,

                  (b) the documents evidencing the Acquisition Loan;

                  (c) the Agreement with Alex Brown & Sons as placement agent in
connection  with the  $26.5MM  Acquisition  Loan and any  subsequent  senior and
subordinated debt documentation;

                  (d) proforma financial statements showing the post-acquisition
consolidated financial condition of IASI and Borrower, and

                  (e) any other document requested by Bank or its counsel.




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         7.10  Asset-Based  Lending Audit.  Prior to the Initial  Advance,  Bank
shall have conducted a comprehensive  asset-based  lending audit, the results of
which shall be satisfactory to Bank, in Bank's sole judgment.

B. All Loans.  The  obligation of Bank to make any Advance on any Borrowing Date
(including  the Closing  Date) is subject to the  satisfaction  of the following
conditions precedent as of such Borrowing Date:

         7.11 Compliance. On each Borrowing Date, and after giving effect to the
Advances to be made thereon; (a) Borrower shall be in compliance with all of the
terms, covenants and conditions of this Agreement,  the Notes and the other Loan
Documents;  (b) there  shall exist no Default or Event of Default  hereunder  or
thereunder;  (c) the representations and warranties  contained in this Agreement
and the other Loan Documents shall be true and correct,  with the same effect as
though such  representations and warranties had been made on such Borrowing Date
(after giving effect to any updating by Borrower of the Exhibits  referred to in
such  representations  and warranties),  except such matters relating thereto as
are indicated in each Borrowing Request, which shall be satisfactory to the Bank
in its  reasonable  discretion;  and (d) there  shall have  occurred no material
adverse  change  in  the  financial  condition,  operations,  status,  business,
prospects,  Assets or property of Borrower and any  Affiliate  since the Closing
Date.  The  acceptance  of each  Advance  shall  constitute a  certification  by
Borrower as of such  Borrowing  Date that each of the foregoing  matters is true
and correct in all respects.

         7.12 Delivery of Documents. All documents required by the provisions of
this  Agreement  to be  executed  or  delivered  to the Bank on or  before  such
Borrowing  Date shall have been  executed  and shall have been  delivered at the
office of the Bank set forth in Section 8.8 on or before such Borrowing Date.

         7.13  Borrowing  Request.  The Bank  shall have  received  a  Borrowing
Request duly executed by an Authorized Representative of Borrower.

         7.14  Supplemental  Opinions.  If requested by the Bank with respect to
such  Borrowing  Date,  there shall have been  delivered  to the Bank  favorable
supplementary opinions of counsel to Borrower,  addressed to Bank and dated such
Borrowing Date,




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covering such matters incident to such transactions  contemplated  herein as the
Bank shall reasonably request.

         7.15 Documentation and Proceedings. All corporate and legal proceedings
and all documents and papers in connection with the transactions contemplated by
this Agreement  shall be reasonably  satisfactory  in form and substance to Bank
(including  without  limitation  those documents  listed in Section 4.4, 4.5 and
4.6), and Bank shall have received all  information and copies of all documents,
which may  reasonably  have  requested in connection  therewith,  such documents
where appropriate to be certified by an Authorized Representative of Borrower or
proper Governmental Authorities.

         7.16  Required Acts and  Conditions.  All acts,  conditions  and things
(including,  without  limitation,  the  obtaining  of any  necessary  regulatory
approvals and the making of any required  filings,  recordings or registrations)
required to be done and performed and to have happened  prior to such  Borrowing
Date and the continued  performance and  effectiveness  of this  Agreement,  the
Notes and the other Loan Documents, shall have been done and performed and shall
have happened in due compliance with all applicable laws,  including the payment
of all Commitment Fees due and payable on or prior to such Borrowing Date.

         7.17 Approval of Bank's  Counsel.  All legal matters in connection with
the making of each Advance shall be satisfactory to Bank's counsel.

         7.18 Pledge Agreement from Affiliates Created Post-Closing.  Bank shall
have received pledge  agreements duly executed by Borrower  assigning to Bank as
security  for the Loan all  Borrower's  right,  title and interest in and to any
Affiliate  of  Borrower  created  after the  Closing  Date,  including  any such
Affiliate  created for the purpose of acquiring  Assets,  and in the case of any
such Affiliate that is a corporation,  Borrower shall have delivered to Bank the
stock of such  Affiliate,  together  with all necessary  endorsements.  Borrower
shall cause any such Affiliates that are  Subsidiaries to be added as guarantors
of the Loan immediately upon organization of any such Affiliates.

         7.19 Representations and Warranties. The representations and warranties
set  forth in the Loan  Documents  are  true and  correct  on and as of the date
hereof,  and on the date of each  Advance  hereunder,  and no material  omission
shall have been made



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by Borrower to Bank concerning its business  operations,  financial condition or
any aspect of the Loan.

         7.20 No Default or Adverse  Change.  On the date hereof and on the date
of each  Advance,  Borrower  shall  be in  compliance  with  all the  terms  and
provisions  set  forth  in the Loan  Documents  on its  part to be  observed  or
performed, and no Event of Default or Default or adverse change in the condition
or operations of Borrower shall have occurred and be continuing at such time.

         7.21 Loan  Documents.  Borrower  shall have  delivered  or caused to be
delivered to Bank all the Loan Documents  (including,  without  limitation,  the
Opinion,  the Security Agreement and all applicable  Consents of Lessor, in form
and substance  satisfactory  to Bank, as Bank may request),  and all of the Loan
Documents are in full force and effect.  Borrower shall have filed all Financing
Statements   necessary  for  perfection  of  Bank's  security  interest  in  the
Collateral  and taken all other  steps  necessary  to  perfect  Bank's  security
interest in the Collateral.  All corporate and other  proceedings taken or to be
taken in connection with the transactions contemplated hereby, and all documents
incident  thereto shall be  satisfactory in substance and form to Bank, and Bank
shall have received all such counterpart  originals or certified or other copies
of such documents as Bank may reasonably request.

         7.22   Payment of Commitment Fee.  Borrower shall have paid to Bank any
Commitment Fee then due and owing.

         7.23  Intercreditor  Agreements.  Assuming  Borrower  has  acquired the
assets of IASLP prior to the Closing  Date,  Bank shall have received (if deemed
appropriate  in  Bank's  sole  judgment)  intercreditor  agreements  in form and
substance  satisfactory  to Bank,  between  Bank and Union  Bank of  California,
current  lender to IASLP,  and between Bank and Alex Brown & Sons,  as placement
agent for IASLP, and all  senior/subordinated  debt holders. If the Closing Date
occurs prior to the  completion  of the  acquisition  of IASLP,  Borrower  shall
provide  Bank  with  intercreditor  agreements  satisfactory  to Bank as soon as
possible but in all events before the completion of the acquisition.



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                                  ARTICLE VIII

                                EVENTS OF DEFAULT

         8.01  Events  of  Default.  The  following  each and all are  Events of
Default hereunder:

                  (a) Monetary Default. If Borrower shall default in any payment
of principal, interest or other charges in respect of any Obligations including,
but not  limited  to,  the  Loan,  within  10 days of the date due and  payable,
whether on demand, at maturity, by acceleration or otherwise; or

                  (b) Certain Non-Monetary  Defaults.  If Borrower shall default
in the  performance  of or compliance  with  Subsection  6.01(c) as to corporate
existence,  any term or covenant  contained in Section 6.02 of this Agreement as
to negative  covenants or in subsections  (d) through (j) of this Article Eight;
or

                  (c) Other Non-Monetary  Defaults. If Borrower shall default in
the  performance  of or compliance  with Section 6.03, or with any other term or
covenant contained in the Loan Documents,  which default or non-compliance shall
continue and not be cured within ninety (90) days of notice  thereof to Borrower
by Bank; or

                  (d)  Misrepresentation.   If  any  representation,   warranty,
certificate,  schedule,  or other information made or furnished in writing by or
on behalf of Borrower  herein or in any other Loan Document  shall prove to have
been false or incorrect in any material  respect on the date as of which made or
reaffirmed; or

                  (e) Bankruptcy,  Insolvency,  Dissolution or  Liquidation.  If
Borrower  or any  Subsidiary  shall  make  an  assignment  for  the  benefit  of
creditors, file a petition in bankruptcy,  petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of  its  assets,   or  shall  commence  any  proceeding  under  any  bankruptcy,
reorganization,  arrangement,  readjustment of debt,  dissolution or liquidation
law or statute of any  jurisdiction,  whether now or hereafter in effect,  or if
there shall have been filed any such petition or application against Borrower or
any Subsidiary, or any such proceeding shall have been commenced against




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any  thereof  (provided  that  proceedings  filed  against  Borrower  shall  not
constitute  Events of Default if (i) Bank shall have been  notified  promptly of
such proceedings,  (ii) such proceedings have been released within 60 days after
being  instituted,  and (iii) no other default or Event of Default  exists under
any Loan Document at the time of such proceeding or thereafter); or if Borrower,
or any Subsidiary shall admit in writing its inability,  or be generally unable,
to pay its debts as they become due or shall make an assignment  for the benefit
of  creditors,  petition  or  apply to any  tribunal  for the  appointment  of a
custodian,  receiver  or  trustee  for  Borrower,  or any such  Subsidiary  or a
substantial  part of its assets,  or Borrower,  or any  Subsidiary by any act or
omission shall indicate its consent to,  approval of or acquiescence in any such
petition, application, or proceeding or order for relief or the appointment of a
custodian,  receiver or any trustee for Borrower,  or any such Subsidiary or any
substantial part of any of its properties;  or if any order, judgment, or decree
is entered in any proceedings against Borrower,  or any Subsidiary decreeing the
dissolution or liquidation of Borrower, or any such Subsidiary; or

                  (f) Final  Judgment.  If a final  judgment  for the payment of
money in excess of an  aggregate  of One  Hundred  Thousand  and No/100  Dollars
($100,000.00)  shall be rendered against  Borrower,  or any Subsidiary,  and the
same shall  remain  undischarged  for a period of thirty (30)  consecutive  days
during which execution shall not be effectively stayed; or

                  (g)  Revocation  of  Consent  or  License.   If  any  consent,
approval,  franchise,  license  or  permit  of any  governmental  agency or body
necessary for the ownership of Borrower's  assets or the operation of Borrower's
business  is  cancelled,  revoked  or  modified  in a  manner  which  materially
adversely affects Borrower or its properties; or

                  (h)  Enforceability  of  Loan  Documents.  If any of the  Loan
Documents  shall  cease to be legal,  valid and binding  agreements  enforceable
against the Person  executing the same in accordance  with the respective  terms
thereof or shall in any way be terminated  or become or be declared  ineffective
or  inoperative  or shall in any way  whatsoever  cease to give or  provide  the
respective liens, security interest, rights, titles, interest,  remedies, powers
or privileges intended to be created thereby; or




                                      -51-



 
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                  (i) Impairment of Payment. If Bank in good faith believes that
the prospect of payment or performance of all or any part of the  Obligations or
the value of any of the Collateral is impaired.

                                   ARTICLE IX

                               RIGHTS UPON DEFAULT

         Upon the  occurrence  of any Event of Default,  Bank shall have and may
exercise any or all of the rights set forth herein provided, however, Bank shall
be under no duty or obligation to do so:

         9.01 Acceleration.  To declare the indebtedness  evidenced by the Notes
and all other  Obligations to be forthwith due and payable,  whereupon the Notes
and all other  Obligations  shall become  forthwith due and payable,  both as to
principal and interest, without presentment, demand, protest or any other notice
or grace period of any kind, all of which are hereby expressly waived,  anything
contained  herein or in the Notes or in such other  Obligations  to the contrary
notwithstanding  and, upon such  acceleration,  the unpaid principal balance and
accrued  interest upon the Notes shall from and after such date of  acceleration
bear interest at the Default Rate.

         9.02 Right of  Set-off.  To exercise  its right of setoff as  permitted
under Section 2.06.

         9.03 Other  Rights.  To exercise  such other rights as may be permitted
under any of the Loan Documents.

         9.04 Uniform Commercial Code. To exercise from time to time any and all
rights and remedies of a secured  creditor  under the UCC as in effect from time
to time in the State of Florida and any and all rights and remedies available to
it under any other applicable law.



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                                    ARTICLE X

                                  MISCELLANEOUS

         10.01 No Waiver;  Cumulative Remedies.  No failure or delay on the part
of Bank in exercising any right,  power or remedy hereunder,  or under the Notes
or the other Loan  Documents  shall operate as a waiver  thereof,  nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right,  power or remedy
hereunder or thereunder. The remedies herein and therein provided are cumulative
and not exclusive of any remedies provided by law or in equity.

         10.02 Entire Agreement;  Amendments, etc. Except as otherwise expressly
provided,  this  Agreement  and the  other  Loan  Documents  embody  the  entire
Agreement and  understanding  between the parties hereto and supersede all prior
agreements  and  understandings  relating  to  the  subject  matter  hereof.  No
amendment,  modification,  termination  or  waiver  of  any  provision  of  this
Agreement,  the Notes or the other Loan Documents,  nor consent to any departure
by Borrower therefrom,  shall in any event be effective unless the same shall be
in writing  and  signed by Bank and  Borrower,  and then such  waiver or consent
shall be effective  only in the specific  instance and for the specific  purpose
for which given.

         10.03 Addresses for Notices,  etc. All notices,  requests,  demands and
other  communications  provided  for  hereunder  shall be in writing  (including
telex,  telecopier  or  telegraphic  communications)  and shall be sufficient if
mailed, sent by overnight courier, telexed, telecopied, telegraphed or delivered
to the applicable party at the address indicated below:

If to Borrower:               John Gleason
                              Chief Financial Officer
                              Kellstrom Industries, Inc.
                              14000 N.W. 4th Street
                              Sunrise, FL  33325
                              Facsimile:  954-545-0428



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<PAGE>



With a copy to:               Shawn Bayne, Esq.
                              Stearns Weaver Miller Weissler
                              Alhadeff & Sitterson, P.A.
                              200 East Broward Boulevard
                              Fort Lauderdale, Florida  33301
                              Facsimile:  954-462-9567

If to Bank:                   Donald Eachus
                              Barnett Bank, N.A., Broward County
                              888 N.W. 62nd Street
                              Fort Lauderdale, FL  33309
                              Facsimile:  954-928-1947

With a copy to:               Judith L. Keiser, Esq.
                              English, McCaughan & O'Bryan, P.A.
                              100 N.E. Third Avenue, Suite 1100
                              Fort Lauderdale, FL  33301
                              Facsimile:  954-763-2439

or, as to each party, at such other address as shall be designated by such party
in a written  notice to the other party  complying as to the  delivery  with the
terms of this Section. Except as otherwise expressly provided in this Agreement,
all such notices, requests, demands and other communications shall, when mailed,
telexed, telecopied or telegraphed, be effective 4 days after being deposited in
the mails (postage paid), sent over a telex or telecopier owned or operated by a
party hereto (with an answer back response set forth on the sender's copy of the
document in the case of a telex) or delivered to Borrower addressed as aforesaid
or delivered to the other party at the address set forth above.

         10.04  Applicable Law. This  Agreement,  and each of the Loan Documents
and  transactions  contemplated  herein shall be governed by and  interpreted in
accordance with the laws of the State of Florida.

         10.05 Survival of Representations and Warranties.  All representations,
warranties,  covenants  and  agreements  contained  herein or made in writing by
Borrower



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in  connection  herewith  shall  survive  the  execution  and  delivery  of this
Agreement, the Notes and the other Loan Documents and be true and correct during
the duration of the Loan.

         10.06 Time of the  Essence.  Time is of the essence of this  Agreement,
the Notes and the other Loan Documents.

         10.07  Headings.  The headings in this Agreement are intended to be for
convenience of reference  only, and shall not define or limit the scope,  extent
or intent or otherwise affect the meaning of any portion hereof.

         10.08 Severability. In case any one or more of the provisions contained
in this Agreement, the Notes or the other Loan Documents shall for any reason be
held to be invalid,  illegal or unenforceable in any respect, the same shall not
affect  any other  provision  of this  Agreement,  the  Notes or the other  Loan
Documents,  but this Agreement,  the Notes and the other Loan Documents shall be
construed as if such  invalid or illegal or  unenforceable  provision  had never
been contained therein.

         10.09  Counterparts.  This  Agreement  may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument  and any of the parties  hereto may execute this Agreement by signing
any such counterpart.

         10.10  Conflict.  In the event any conflict arises between the terms of
this  Agreement  and the terms of any other Loan  Document,  Bank shall have the
option of selecting which conditions shall govern the loan relationship evidence
by this Agreement and, if Bank does not so indicate, the terms of this Agreement
shall govern in all instances of such conflict.

         10.11 Duration. The duration of this Agreement shall be for such period
of time  until the Loan and the Notes have been  repaid in full,  and all of the
other Obligations have been paid to Bank in full.

         10.12 Expenses. Borrower agrees, whether or not the transactions hereby
contemplated  shall be  consummated,  to pay,  and save  Bank  harmless  against
liability



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for the payment of, all  out-of-pocket  expenses arising in connection with this
transaction  (including  attorneys'  fees  (whether  incurred  at trial,  in any
bankruptcy or appellate proceeding or otherwise) and the fees and commissions of
collection  agencies or other costs and penalties  incurred by Bank in enforcing
its rights under the Loan Documents or pursuant to law), all taxes,  together in
each case with interest and  penalties,  if any, which may be payable in respect
of the execution,  delivery and  performance of this Agreement or the execution,
delivery,  and  performance  of the  Notes  issued  under  or  pursuant  to this
Agreement  (excepting  only  any  tax on or  measured  by  net  income  of  Bank
determined  substantially in the same manner, other than the rate of tax, as net
income is presently  determined  under the IRS Code), all costs incurred by Bank
in connection  with  Hazardous  Materials  found on or affecting the Property or
Borrower's operations;  the reasonable legal fees and expenses (whether incurred
at trial, in any bankruptcy or appellate  proceeding or otherwise) or counsel to
Bank in connection  with the  negotiation,  preparation  and enforcement of this
Agreement,  the  Notes,  the  Security  Agreement,  or  any of  the  other  Loan
Documents,  or incurred by Bank in its efforts to enforce  payment of  Accounts,
whether incurred through judicial proceedings or otherwise, and whether incurred
at trial,  in any  bankruptcy or appellate  proceeding  or  otherwise.  Borrower
either  (a)  agrees to pay all  documentary  stamp  taxes due as a result of the
closing of this  transaction  within the State of Florida,  or (b)  acknowledges
that at its  request  the Loan is being  closed  and the Notes are being held by
Bank outside of the State of Florida and that no Florida documentary stamp taxes
are being paid by Bank on the Notes.  Borrower agrees to indemnify and hold Bank
harmless  from the payment of all  documentary  stamp taxes,  together  with any
penalties  and  interest  thereon,  if Bank,  at any time or for any reason,  is
required  to pay  such  taxes  under  the  laws of the  State  of  Florida.  The
obligations  of Borrower  under this Section 10.12 shall survive  payment of the
Notes. The obligations of Borrower  hereunder do not affect  Borrower's right to
contest  any tax after  payment  of the  disputed  amounts or  establishment  of
adequate reserves, as applicable.

         10.13  Successors  and Assigns.  All covenants  and  agreements in this
Agreement  contained by or on behalf of either of the parties  hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not; provided,  however, this clause shall not by
itself  authorize any  delegation of duties by Borrower or any other  assignment
which may be  prohibited  by the terms and  conditions  of this  Agreement,  and
provided further that the parties



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intend that this Agreement is solely for their benefit and no person not a party
hereto  shall have any rights or  privileges  under  this  Agreement  whatsoever
either as the third party beneficiary or otherwise.

         10.14 Cross  Defaults.  A Default under any Loan Document,  including a
default under this  Agreement,  shall be and constitute a Default under each and
every Loan Document, including this Agreement.

         10.15  Non-Waiver.  No delay,  forbearance,  or non-exercise by Bank in
exercising  any of its  rights  under  this  Agreement  and no course of dealing
between Bank and Borrower shall operate as a waiver of any rights of Bank unless
Bank has  expressly  so waived said  rights in a writing  signed by it. Any such
action  shall not preclude  Bank from  thereafter  exercising  its rights as set
forth in this Agreement.

         10.16  WAIVER  OF TRIAL  BY  JURY.  EACH OF  BORROWER  AND BANK  HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT TO ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER BANK OR
BORROWER  OR ANY OTHER  PERSON.  THIS  WAIVER OF TRIAL BY JURY BY  BORROWER IS A
MATERIAL INDUCEMENT FOR BANK TO ENTER INTO THIS AGREEMENT.



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         IN  WITNESS  WHEREOF,  each  of the  parties  hereto  has  caused  this
Agreement to be executed,  sealed and delivered,  as  applicable,  by their duly
Authorized Representatives on the day and year first above written.

                                         Borrower:

                                         KELLSTROM INDUSTRIES, INC.

(CORPORATE SEAL)

                                         By:---------------------------
                                         Name:  John S. Gleason
                                         Title: Executive Vice President/Chief
                                                Financial Officer

ATTEST:

----------------------
Secretary

                                         Bank:

                                         BARNETT BANK, N.A.

                                         By: ----------------------------
                                             John J. Viadero, Vice President




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